Monday, March 7, 2011

Tay Za, USDP Secure IT Monopoly

Frustration and fury have been expressed by representatives of Burmese IT companies, including the semi-governmental Yatanarpon Teleport Company, after it emerged that FTTx (Fiber Transfer to X) contracts previously agreed with the military government were to be suspended in favor of a deal with tycoon Tay Za and an IT firm run by the junta's proxy party to establish a dual-monopoly of Burma's broadband networks.

Most of the affected firms have already installed FTTx services in Rangoon and Mandalay, according to agreed designated zones, and stand to lose their investments.

FTTx is a generic term for any broadband network architecture that uses optical fiber to replace all or part of the typical communication systems, including Internet, television and telephone.

Mostly based Yatanarpon Teleport located near city of Pyin Oo Lwin, the companies signed BOT system contracts with the Ministry of Communications, Posts and Telegraphs [MCPT] in September, sources close to these companies told The Irrawaddy. Many of the deals involved partnership with Yatanarpon Teleport, the country's largest IT firm.

The companies currently holding FTTx contracts are: E-Lite Company, Red Link, High the Princess, Fortune International, MDS, Kinetic Myanmar, Sky Net, and Fisca.

According to the sources, all contracts will soon be handed to the E-Lite owned by Burma's top businessman Tay Za, who is blacklisted under Western sanctions, and the ITCS, which is owned and controlled by the junta's political proxy Union Solidarity and Development Party (USDP).

“We have been working on these contracts for four or five months and have already spent a lot of money in implementing operations,” said a representative of one of the affected companies. “Now we are told to stop. We have been sidelined in favor of Tay Za.”

He said that billions of kyat, or millions of dollars, have already been spent by the affected firms on setting up the necessary infrastructure in Rangoon alone.

“By this way, I don't see Burma as a potential place for foreign companies to work,” he added.

“Our contract is for five years,” said a Sky Net staffer. “But now E-Lite and [USDP-run] ITCS will take over all the IT business in Rangoon. We are being kicked out.

“What about the investment we have outlaid? We are being forced to terminate our business in the middle of operations,” he said.

He add that the business climate in Burma is completely unfair, and that Elite is in a privileged position because of Tay Za's close connection to the military junta.

There are currently 13 WiFi zones in Rangoon, a number that will increase once the FTTx system is up and running. FTTx, unlike ordinary communications technology, can offer high-speed data transfer via underground fiber-optic cables.

“All the concerned companies are really angry at the authorities, especially because the situation is so unfair,” said the Sky Net staffer. “The Rangoon market for this service is growing. E-Lite approached the MCPT and convinced it to give E-Lite a monopoly on the service.”

“We can do nothing about it,” he said. “We have to do what we are told. We don't know if we will get compensation. The government has not made any comment.”

According to sources, the MCPT requested the affected companies to detail their expenditures to date after notifying them that their operations would have to be suspended. But, no compensation has been paid yet, they said.

A source said that although ITCS is registered as a private company, incumbent government officers and USDP members play significant roles in its boardroom, just as they do at Yatanarpon Teleport.

Moreover, he said, the ITCS sells mobile phones and prepaid cards in a joint venture with Myanmar Post and Telecommunications.

Elite Company is a subsidiary of Htoo Trading Co. Ltd, which also belongs to Tay Za. In collaboration with Myanmar Post and Telecommunications, it already has stakes in several related sectors, including: providing a nationwide Internet service via fiber optic cables; manufacturing IT-related materials; importing and distributing mobile phones; setting up CMDA phone lines; and the sale of prepaid phone cards.

Source:  http://www.irrawaddy.org/article.php?art_id=20886

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