Home » Myanmar Publications » TMT and Competition Insight of January 2018: Competition rules, adjustment of licensing fees, quarterly report and universal service strategy
TMT and Competition Insight of January 2018: Competition rules, adjustment of licensing fees, quarterly report and universal service strategy
January 26, 2018
Draft Competition Rules 2017 The Ministry of Commerce published the Draft Competition Rules 2017 on 29 December 2017. These are intended to implement the Competition Law 2015, which takes effect from February 2017. The Draft Competition Rules 2017 include articles on the formation and responsibilities of the Myanmar Competition Commission and the investigation committee, as well as the process of filing complaints and investigating and resolving disputes in relation to anticompetitive activities. The Rules also set out relief and penalties to remedy such anticompetitive activities that are restricted or prohibited under the Competition Law 2015.
Review and adjustment of telecom licensing fees The Posts and Telecommunications Department (“PTD”), the regulator in the telecommunications sector in Myanmar, is reviewing and considering the adjustment of annual regulatory fees for telecom licenses. It has recently published a draft schedule for the adjusted fees. The proposed new rates of annual regulatory fees for each category of telecom license remain the same compared with the current rates; however, a minimum threshold payment ranging from MMK1,500,000 to MMK6,000,000 is added depending on the type of license. In other words, even if a licensee claims it hasn’t made sufficient revenue in a year, it is still bound to pay the minimum fee in order to keep their license. The PTD has introduced this new fee schedule with the purpose of encouraging the performance of commitments under the license and, thus, eliminating inactive licensees.
Quarterly report as a licensing condition The PTD intends to modify general licensing conditions to include a quarterly report as part of the common reporting obligation of a licensee. Currently, it’s common as a licensing condition that the licensee shall maintain accounting records on a quarterly basis and submit a one-time audited financial statement to the PTD within 90 days from the anniversary of the effective date of the license.The proposed modification will expand the above-mentioned obligation from “maintain” to “maintain and submit” quarterly records. Furthermore, the report shall include both an operating report and accounting records. From the proposed report form, the reporting items include the amount of customers and infrastructure, the financial figures for income, expenditure and payments, as well as a detailed split of such information by state/region.According to section 21 (a) (iii) of the Licensing Rules, the PTD can amend the licensing conditions without the consent of the licensee in the public interests, after reasonable notice has been given to the licensees and a public consultation process has taken place. The PTD had published a short notice earlier and concluded the public consultation process in two weeks, with the justification that it was required by the International Telecommunication Union and the Ministry of Planning and Finance to provide such information regularly.
Universal Service Strategy for Myanmar (2018-2022) The PTD published the draft Universal Service Strategy for Myanmar (2018-2022) (“Strategy”) along with an executive summary on 29 December 2017. The Strategy stipulates the key target to reach 99% coverage of the population for mobile signal and basic mobile voice services in the next five years, as well as geographic coverage for 28 major national highways and roads. Another key target is to ensure coverage of 95% of the population for broadband services. To achieve the targets, the government will implement programs for infrastructure deployment, training to build up digital skills and special projects to enable internet access for special groups of users, e.g., disabled people, low-income groups, rural users, etc.At present, the PTD collects 2% of relevant revenue on an annual basis from nationwide telecommunications licensees, i.e., mobile operators like Telenor and Ooredoo. It is projected that a figure around US$100M to US$121M will be collected for the next five years for the universal service fund. While the universal service fund in Myanmar will use a competitive tendering process to select a universal service provider, it will prefer the “smart subsidy” approach to partly (rather than fully) fund the universal service project.The PTD is empowered under Chapter XV of the Telecommunications Law 2013 to formulate plans for universal services so as to enable public access to telecommunications services in underserved areas and to administer a universal service fund for this purpose. It is also a common condition in operator licenses to follow the PTD’s directives and decisions in relation to universal services.