Govt aims to formalise phone imports

Govt aims to formalise phone imports

By Aye Thida Kyaw   |   Monday, 07 July 2014

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The vast majority of mobile phones brought into Myanmar – including iPhone or Samsung Galaxy-series handsets – do not follow correct import procedures, said Minister of Commerce U Win Myint.

A man checks out his handset options at a Yangon shop. Phones are expected to increase in popularity when the foreign telcos launch. Photo: Staff

About 98 to 99 percent of all imported handsets are brought in without import licences, with only about 200,000 licences being issued for about 10 million mobile phones, he said.

Importers unwilling to apply for licences and pay the correct fees means an unlevel playing field for those who follow the rules, such as official dealers, he said.

“It has a huge impact on official dealers,” he said at a meeting of local traders in late June.

Outside of official dealers, not a single iPhone or Samsung Galaxy has been properly imported to Myanmar, he added.

The Ministry of Commerce is now negotiating with the Ministry of Finance to lower customs duties on handsets, with a goal of bringing them into line with other ASEAN countries.

“The tax rate of 12pc is probably the main reason why handset dealers don’t get licences,” said U Win Myint, who added the ministry is also considering organising a mobile dealers association to control the issue.

There are a number of ways to bring in handsets without licences, said U Tin Ye Win, director for the ministry’s Illegal Trade Prevention and Supervision Control Committee.

Some come through ports mixed with products like textiles or cars, while others apply for only a few licences and bring in far more phones. Some are also brought through Muse border crossing near China and Myawaddy near Thailand, as well as from Singapore, he said.

Mobile penetration rates in Myanmar are one of the lowest in the world, with most pegging the figure around 10pc. Still, experts say recent liberalisations in the sector are likely to rapidly increase demand for phones.

Two foreign firms, Telenor and Ooredoo, are set to launch in the coming months, taking on Myanma Posts and Telecommunications (MPT), the sole incumbent operator.

Some 9 million MPT SIM cards for GSM, CDMA 800MHz and WCDMA have been distributed, including 400,000 SIMs for K1500 distributed in June, state-owned media claimed on July 1. SIMs have routinely cost in the hundreds of dollars, but with the private operators pledging to sell SIMs at K1500, many more people are likely to be able to afford phones.

Users are often price-conscious and shop around to save a few kyats, said U Htin Lin Kyaw, general manager of Mr Fone mobile shop.

Most of Myanmar’s phones are currently sold through mobile shops rather than official dealers.

KKA mobile shop sales manager Ma Hteik Hteik San said customers are keen to get low prices and have software installed on their phones. She added that one draw for official dealers are warranties, particularly for higher-end phones.

One 30-year-old man browsing phone shops in Kyauktada township said he noticed differences between official and ordinary shops rising up to K100,000.

“The K100,000 difference is important for customers,” he said. “They want to save money, especially when there’s not much difference for services and quality.