Putting Myanmar's proposed telecom rules on global stage

Putting Myanmar's proposed telecom rules on global stage

Summary: Ministry of Communications and IT wraps up public consultation on proposed rules governing the local telecom sector market, but how do the regulations measure up with international best practices?

SHARE:

The Republic of the Union of Myanmar today closed its public consultation on its proposed rules for the country's telecommunications sector, which covers areas such as licensing, access and interconnection, spectrum, numbering, and competition.

Telco
Prospects for Myanmar's telecoms sector are looking very positive.

Managed by the Ministry of Communications and Information Technology, the consultation allowed interested parties such as Ooredoo, Telenor, MPT, YPT, and industry players to comment on the proposed rules which were published on November 4. As anticipated, the draft rules included proposals for the issuance of additional telecoms licences in Myanmar.

The consultation covered five broad areas:

  1. licensing;
  2. access and interconnection;
  3. spectrum;
  4. numbering; and
  5. competition.

A key question here is whether the proposed rules meet international best practice benchmarks?

Now that the consultation on the draft regulations has closed, it is possible to provide an interim report card. While this can be done in different ways, a useful benchmark is the reference telecoms paper of the GATS annex on telecoms which sets out the basic elements of a liberalized telecoms regulatory framework.

The assessment below follows the structure of the reference paper.

Competitive safeguards

The Myanmar Telecoms Law contains a prohibition on any conduct which has the effect of lessening free competition in any telecommunications market".

The draft competition regulation effectively sets up a sector-specific ex-post antitrust regime (with any complaint addressed through an investigation of the relevant market, the conduct, and its effects), and also creates a rebuttable presumption that certain types of conduct will breach the lessening free competition prohibition. Although not as strong as pure ex-ante regulatory prohibitions found in some regimes, this seems a pragmatic approach to a difficult area.

While it may prove a challenge to develop the capability to implement and enforce the proposed rules, the proposals do meet the requirements of the reference paper and international best practice.

Interconnection regulations

The Myanmar Telecoms Law requires that "access and interconnection provided by a licensee...shall be on an equitable and non-discriminatory basis, and shall not be of lower technical standard and quality than the technical standard or quality provided in the licensee's own network facilities or network services".

The draft interconnection regulations go even further, giving the regulator the power to direct licensees to negotiate interconnection or to share facilities that cannot be efficiently replicated.

In relation to dominant licensees, the draft regulations empower the regulator to direct the licensee to negotiate access agreement as well as to impose additional obligations. Furthermore, the draft regulations enable the regulator to direct dominant licensees to publish a reference interconnection offer. The draft regulations go on to specify timeframes for concluding interconnection agreement and the process for referring and resolving disputes.

The draft regulations also require interconnection rates to be cost-orientated, but do not specify a particular methodology to be adopted. However, as noted above, the competition guidelines make reference to long-run incremental cost as a benchmark.

Although it remains to be seen how these rules will be applied in practice, on paper, Myanmar will have an interconnection regime in line with international best practice and, in many ways, superior to some of its regional neighbors.

Universal service

This is addressed in the Myanmar Telecoms Law but, in contrast to the detailed competition and interconnection regulations, there is no detail. This may be because there is no immediate need to address universal service on the basis that the licensees' rollout commitments would achieve far more than a mandated level of service.

However, as coverage increases the costs of serving the remaining unconnected--probably remote rural--population will increase. It remains to be seen how this will be dealt with by future governments and regulators but with regard to the universal service levy or fund, the lack of detail as to how these are to be administered in a transparent, non-discriminatory, and competitively neutral way means Myanmar falls some way short of best practices represented by the reference paper.

Public availability of licensing criteria

The process to award the two national mobile licences to international operators was open and transparent, with over 90 bidders participating in the qualification round and 12 in the final round, though this later reduced to 11 after one consortium pulled out mid-process.

The framework for additional licences is clear in terms of both the law and draft licensing guidelines. The draft regulations meet the requirements of the reference paper by stating licensing criteria, timelines, and licence terms.

Myanmar's licensing framework goes beyond the reference paper by specifying technology and service-neutral licences and the use of class licences that only require registration--an approach that puts Myanmar ahead of its regional neighbors.

 "With a telecoms law and draft regulatory framework largely meeting or exceeding international standards, it is not fantasy to imagine Myanmar leapfrogging its competitors."

Provisions for independent regulator

At the time of writing, the regulator is not independent--the Ministry of Communications and Information Technology is the relevant government department, the regulator, and the incumbent operator. However, the law provides that an independent regulatory commission will be set up within two years and will become the regulator.

In the interim, the regulator has been split from the incumbent operator and, notwithstanding its lack of legal separation, is doing all it can to operate as if it were an independent regulator.

Allocation and use of scare resources

The reference paper requires that scarce resources (spectrum, numbers, and rights of way) are allocated and used in an objective, timely, transparent, and non-discriminatory manner and that current frequencies allocations should be published.

The Myanmar Telecoms Law and draft spectrum and numbering regulations meet the requirements of the reference paper. However, rights of way are not meaningfully addressed in the law or draft regulations. Given the challenges and emotion associated with land reform in other emerging economies, it is not surprising that this issue was not addressed, as any attempt to include it could have delayed the process significantly.

Conclusion

While reforms in Myanmar could yet go backward at the time of writing, the prospects for the telecoms sector in the country are looking very positive.

With a telecoms law and draft regulatory framework largely meeting or exceeding international standards (universal service being the one exception), and a four-player market with significant committed investment and execution capability, it is not fantasy to imagine Myanmar leapfrogging its competitors.

Topics: Telcos, Government Asia, Legal

Rob Bratby

About Rob Bratby

International telecoms, media and technology lawyer. Covering South-East Asia from Singapore.

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.

Talkback

0 comments
Log in or register to start the discussion