Decades-old bets in Myanmar's tech industry finally reap rewards

Local tech companies see major opportunities brought on by reforms in the country

The MICT technology park in Yangon, Myanmar

The MICT technology park in Yangon, Myanmar

It may have taken almost two decades, but Tun Thura Thet's investment in one of Asia's poorest countries is finally paying off.

"I've been waiting here for 17 years to have this moment," he said, sitting at his office in Yangon, Myanmar. "After 10 or 12 years, we almost gave up."

Tun Thura Thet is CEO of Myanmar Information Technology (MIT), one of the few software companies that managed to survive under the country's military rule. But after years of facing a stagnant business environment, Myanmar's tech industry is starting to tap into opportunities brought on by the nation's move toward democracy.

MIT, founded in 1997, is a maker of enterprise software and expects to ride high on the reforms ushered in by the country's new civilian government. Last week, the company gained global attention when it became Microsoft's major supplier for its software products in the nation. Making the deal possible was the decision by the U.S. to lift trade sanctions on the country, Tun Thura Thet said.

The company is also helping local banks pave the way for modern financial services, including establishing Myanmar's first ATMs. "Just last month we launched mobile banking for one of the banks," he said. "This is one of the things we are very excited about. In Myanmar, we can always be the first to do these things. In other countries, you don't have this chance."

It marks a major contrast from over a decade ago, when Tun Thura Thet was unsure his company would succeed under the country's military rule. Home to 60 million people, Myanmar represents one of the last untapped markets in Asia and its tech industry has struggled to grow. Even now, Internet penetration in the country is only at 1 percent and electricity can be scarce. Most people cannot afford to buy mobile phones, let alone purchase a PC.

"The tech market here has been small," said Tun Thura Thet, whose company employs 300 people but is considered large by local standards. Only about 10 local software firms operate in the country, he estimated.

MIT was able to thrive by selling enterprise software to Myanmar banks. But following the country's banking crisis in 2003, the company resorted to going abroad, and expanded to Singapore in 2005 as an offshoring provider. The country's past censorship of the Internet was another obstacle that threatened to derail his business. So in 2001, MIT and several other tech firms banded together to form a government-approved technology park in Yangon, with better access to the Internet.

The company was lucky to survive under such conditions, he said. Tun Thura Thet remembers the frustration.

"Why am I here? I'm wasting my time," he recalled thinking. "I'm wasting everything, my youth, my innovation, my opportunities, everything. But again, what brought me back is the people. If you're a leader you have to work hard until there's a transformation."

Others in Myanmar's tech industry are also reaping the benefits of that same transformation. Thaung Su Nyein is managing director of Information Matrix, an IT and media company also based in Yangon. Like Tun Thura Tet, he also made a decade-old bet on Myanmar's tech industry stretching back to 1999 when he decided to leave New York and return to his home country.

"I wanted to be the next Yahoo! in Myanmar," he remembered. "I wanted to be that pioneer."

But his business plan quickly collided with Myanmar's attempts to control the Internet. After arriving, Thaung Su Nyein learned that local authorities had detained several people for starting email services in the country. The government had also made it illegal to offer any kind of private Internet service.

"Politics was really bad at that time. Basically you were providing this outside gateway out of the government's hands," he said. "This was really dangerous in the eyes of the government. But for the IT business guys, they didn't even think about that."

It forced Thaung Su Nyein to scale back his business plan, and instead try to start an "offline cyber cafe." At the cafe, PCs would be loaded with pre-downloaded Web content imported on CDs shipped from Singapore. But authorities were quick to intervene, and shutdown his business.

"The leadership didn't like the word 'Internet'," he recalled. But despite his business plan's failure, Thaung Su Nyein found success in print media, and began releasing a publication covering technology. His company now publishes several weekly journals, in addition to operating online portals, and running a web development business.

Since Myanmar's new government took power in 2011, a sea of change has occurred in the country, he said. The government has ended the strict online censorship, and wants Internet and telecommunications to play a major role in developing Myanmar, Thaung Su Nyein added.

In addition, the government reforms are expected to open up Myanmar's mobile Internet market, potentially bringing a flood of online users to Thaung Su Nyein's publications. By 2016, Myanmar wants mobile penetration in the nation to reach between 75 and 80 percent.

"We could get tens of thousands of reader on our mobile apps," Thaung Su Nyein said. "That's something we are looking forward to."

Tags distributionregulationdesktop pcshardware systemssmartphoneslaptopsinternetgovernmenttradeGoogleconsumer electronicsMicrosoft

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Michael Kan

IDG News Service

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