Tuesday, July 11, 2017

The unprecedented explosion of smartphones in Myanmar

Outside the offices of an internet startup called nexlabs, a snarl of honking cars and rickshaws grinds to a standstill on a trash-strewn street lined with crumbling buildings. Inside, though, the scene could be straight out of Silicon Valley.

Programmers in t-shirts and jeans tap away at laptops beneath posters exhorting them to “Innovate” and “Dance Like Crazy”. Local demand for their smartphone apps and websites is exploding, and in the last 12 months they’ve inked marketing contracts with multi-nationals like Samsung Electronics Co and Nestle SA.

“It’s in the air,” says the company’s 25-year-old chief executive officer, Mr Ye Myat Min. “Yesterday, I was in a cafe and the guys next to me were talking about building an app.”

What’s remarkable about Mr Ye Myat Min’s internet success story is that it’s happening in a country where most people are farmers, the majority of roads are unpaved, and reliable electricity remains a luxury: Myanmar.

Just six years ago, when Myanmar was emerging from decades of isolation imposed by its military dictatorship, phones were an extravagance available only to the rich and well-connected. Only North Korea had fewer mobile phones. Now, though, after the airwaves were opened to foreign investors willing to bear some of the cost of building a vast wireless network, almost everyone in South-east Asia’s poorest country is connected.

“It’s amazing,” said Mr Marc Einstein, an analyst at Tokyo-based consulting firm ITR Corporation, who’s advised several telecommunications businesses moving into Myanmar. “I can’t think of another market where things have transformed so quickly.”

The watershed came in 2013, when a government led by former president Thein Sein ended the state monopoly over phone service. A smartly planned tender offer made sure new licenses weren’t a simple giveaway. Investors had to commit to covering the country’s farthest reaches, not just its cities, where population density makes for easier money.

By the following year, Norway’s Telenor ASA and Qatar’s Ooredoo QSC were starting to spend billions of dollars to cover a land mass the size of Texas, spread over steep mountains and lowlands that flood in monsoon season. Japanese carrier KDDI and trading company Sumitomo struck partnership deals with the government’s Myanmar Posts and Telecommunications to invest another US$2 billion (S$2.8 billion).

Now there are thousands of cell phone towers sprouting out of forests and remote rice paddies, running off their own solar-powered electricity. Refrigerated boxes protect their computerised brains from Myanmar’s sweltering heat.

In 2015, Myanmar signed up more people for mobile phone service than any country in the world except China and India, according to the Asian Development Bank. By last June, about 90 per cent of the country’s 54 million people had access to a phone with internet service, the Myanmar Computer Federation says. Some 60 per cent use Facebook or other social media to get news, state media reported in April. In Yangon, the country’s biggest city, you can now hail a car using ride-sharing apps like Uber or Grab.

Back in the days of the junta, the identification chip that goes inside a cellphone, a SIM card, could run you more than US$2,000 on the black market. These days, a data-enabled card sold by Ooredoo, the Qatari company, can be had for US$1.50. A smartphone itself can cost less than US$20. And domestic calls are about 2 cents per minute.

Mr Naing Win, a 30-year-old man selling waffles from a pushcart in Yangon, says for years he had no way to communicate with his family back home in the countryside, except by post. “It’s much easier” now that everyone has a smartphone, he said.

Ms Thiri Thant Mon, owner of a small investment bank in the city, says she still remembers how magazines from the outside world used to arrive weeks late because censors needed time to comb through them.

“Suddenly because we’re on internet,” she said, “people realise what the rest of the world looks like. Now it’s like everybody on the street is talking about Trump. A few years ago, nobody knew what was happening in the next town.’’
If there is a risk in Myanmar’s mobile phone miracle, it’s to the companies who’ve invested in it, according to Einstein, the telecom consultant. Asia is full of examples, he says, where regulators have allowed cut-throat competition that drives prices down fast, but also puts firms out of business.

In January, Myanmar may have taken a step in that direction when it issued a fourth license to a group led by Viettel Group, the state-owned carrier run by Vietnam’s Ministry of Defence, which has a track record of entering markets in far flung places like Haiti, Tanzania and Cambodia—and mowing down the competition.

Viettel didn’t respond to a request for comment. Representatives for all three of Myanmar’s current carriers said the companies have always assumed they would have to deal with a fourth competitor. Einstein, the analyst, summed it up this way: “Things are going to get nasty.”

For the average Burmese person, though, not so much.

Most people in Myanmar still have to carry wads of cash in their pockets — banks are scarce and only 5 per cent of the population has an account, according to the United Nations — but a crush of new apps may solve that.

One of them called Wave Money, an app developed by Telenor with a local partner, allows people to make payments or transfer money, and even withdraw cash at thousands of general stores using nothing besides their smartphones. Some 450,000 people have used the service since its launch last August, according to the company.

“Myanmar is crying out for better financial services and smartphones make this possible without the usual brick-and- mortar investment,” said Mr David Madden, founder and CEO of Yangon-based business incubator Phandeeyar.

Smartphones for everyone means Myanmar’s farmers can now get addicted to online games just like everyone else. Local software developer My Play says it already has one million users for its five games, including one that allows players to race the obstacle course of Myanmar’s roads in a rickshaw. In March, Australia’s Isentric said it agreed to purchase the company for US$4.6 million.
Myanmar is offering the world an object lesson in how the internet can render obsolete some elements of physical infrastructure, like fixed line phones or even bank branches, but there are still things the internet can’t replace.

At nexlabs, the Yangon start-up, the electricity failed just as CEO Ye Myat Min sat down to talk about Myanmar’s mobile phone gold rush. The young entrepreneur seemed unfazed as the office plunged into darkness for a few seconds before backup generators roared to life.

Source : http://www.todayonline.com/world/asia/unprecedented-explosion-smartphones-myanmar

Monday, July 3, 2017

Blockchain pilots making waves in developing Asia

Not just a fancy but impractical idea, blockchain is taking on a crucial role in supply chain management and finance in developing Asia. Here are some works in progress.

We’ve all heard the buzz about the potential applications of blockchain technology. But what’s actually happening in developing countries in Asia and the Pacific?

Beyond bitcoin payments and remittances, blockchain exists largely in the pilot stage. Governments and banks are collaborating with technology firms to see if it can be used to solve persistent problems like traceability, identification, and trust.

Energy 4 ways blockchain will disrupt the energy sector Read now  Let’s bring some clarity to the hypotheticals. But first, what exactly is blockchain? It’s a type of database that takes records and puts them in a block (akin to, say, a sheet in your Excel file).

Each block is then “chained” to the previous block, using a cryptographic signature. This allows blockchains to be used like a ledger, which can be shared and corroborated by anyone with permission.

In short, it’s peer-to-peer sharing of data – it does not require a trusted intermediary. Let’s look at some ways our countries are using it.

Georgia – land registry  

In 2016, Georgia and a US-incorporated provider piloted a blockchain-based platform for the National Agency of Public Registry to record land titles and integrate them into the existing digital records system.

Georgians can now register land titles and verify the dates of transactions, thereby increasing transparency and accountability. The original agreement was expanded in 2017 to include other government departments.

Technically, there are two parts to the system. A private blockchain, on which the government records data on transactions, and a public blockchain. The information on ownership is publicly available, although the data underlying it are not - in order to protect the owner’s privacy.

Cambodia – payment systems  

Last April, the National Bank of Cambodia (NBC) signed an agreement with a Japanese startup to design a new payments system. The testing phase is expected to be launched by the end of this year.

The objective is to design a system for interbank transactions that will offer a secure and cost efficient way to transfer money. This can benefit many in a country where the commercial banking infrastructure is still evolving, but which enjoys solid mobile technology and connectivity.

Unique to this project is the collaborative relationship between the partners. The technology provider will build the infrastructure, and the NBC will contribute to the startup’s ongoing technology design.

Globally, many central banks have been exploring the potential of blockchain. The International Monetary Fund has encouraged this activity and urged banks to study its implications.

Indonesia – sustainable supply chains  

During the first half of 2016, a UK company piloted a blockchain project that tracked the provenance of yellowfin and skipjack tuna caught by local fishermen as part of a sustainable supply chain.

This allows proof of compliance at origin, which in can potentially replace the current paper records which are difficult to verify and subject to corruption.

The system is a mix of mobile technology and blockchain. Fishers registered their catches to the blockchain via text message. Additional data are later verified and added by NGOs. Once the information is transmitted through the supply chain, it cannot be altered, and the data are visible through the product’s whole journey.

Supply chain transparency for commodities where provenance may impact consumers is moving forward quickly, and using blockchain for this is gaining traction.

Myanmar – microfinance transactions  

BC Finance, the biggest microfinance institution in Myanmar, is working with a Japanese firm to record transactions on blockchain. 

The partners hope that this initiative can propel the sector’s growth by cutting costs and reducing the administrative complexity of tracking large numbers of small transactions.

It is expected that blockchain technology can be useful in a country like Myanmar, where advanced accounting systems are not yet in place. However, obstacles include frequent power outages and low-quality local circuits.

Finance in general and trade finance in particular, is one of the more active areas for blockchain development. Commercial banks throughout the region are participating in consortiums to come up with blockchain solutions to the very expensive, slow, and opaque trade process.

Bottom line 

Blockchain pilots are making waves in countries in developing Asia for two reasons. 

The first reason is that most developing countries don’t have legacy systems that need to be replaced. Blockchain can provide the first upgrade of an existing inefficient system, or introduce infrastructure that didn’t exist before. 

The second reason for the widespread interest stems from the light regulatory infrastructure in many countries. So far, this has been an opportunity, but it also raises some concerns as this technology matures.

ADB can play an important role in ensuring that blockchain is implemented in a development-friendly way. We can bring together regulators, best practices, IT experts, and officials to ensure everyone is on the same page. 

Alisa DiCaprio is Economic Researcher at ADB Institute and Steven Beck is Head of Trade Finance at ADB. This post is republished from the ADB blog.

Source : http://www.eco-business.com/opinion/blockchain-pilots-making-waves-in-developing-asia/