Tuesday, July 25, 2017

Myanmar's phone sales decline as SIMs dry up

Employees of a telephone shop on Bo Aung Kyaw Street in downtown Yangon show a product to customers. (Boothee/The Myanmar Times)Employees of a telephone shop on Bo Aung Kyaw Street in downtown Yangon show a product to customers. (Boothee/The Myanmar Times)

Mobile phone sales are down as the supply of SIM cards has dried up following the shock resignation of the former minister for telecommunications on January 16, shop owners in Yangon said last week.

“Most of our customers buy a handset and SIM card together but there are no SIMs available, so people are buying fewer phones,” said Ko Maung Maung, owner of ALIF phone shop in Yangon’s Pabedan township.

He added that the phone and SIM sales are always linked. “When we’ve sold all our SIM cards, we only sell a maximum of five or six more handsets. But when we have SIM cards we easily sell 10 or more phones,” he said.

The number of mobile phone shops in Yangon has increased significantly in the past three years as the prices of SIM cards have been reduced in steps, and the supply has become more regular. Previously, SIM cards were sold through auctions.

But the supply has dried up since the end of 2012 and shops are surviving on handset and accessory sales, as well as service charges, said U Nay Dawn Win, owner of Hello Thargyi mobile shop in Thaketa township.

“There are few buyers, except for those people who always want the latest model,” he said. “Normally people buy the cheapest handsets they can find at about K30,000,” he said.

“Before January, small shop owners would sell SIMs with incentives, such as by installment plans with handsets. Then, even shops were selling three to five handsets a day, while big shops could sell up to 20,” he said.

“But since mid-January, when the supply of SIMs was reduced, handset sales have fallen a lot,” he added.

A shop owner in Latha township said sales ramped up in January 2010 when the supply of SIM cards increased, beginning with CDMA 800MHz connections that sold for K500,000 each. GSM SIMs at the same price followed in February 2011.

Prices were lowered in April 2012, with the price of WCDMA and GSM chips reduced to K250,000 and K200,000 respectively.

The increased supply of SIMs also boosted handset sales, the shop owner said.

“Ever since the supply of SIM cards increased we’ve been selling a lot more handsets but in the past few weeks it’s been difficult to find SIMs,” he said.

Daw Mon Mon Aye, the marketing manager of J phone shop in Kyauktada township, said shop owners were hopeful that the supply of SIM cards would increase again soon.

“Consumers are waiting for lower priced SIMs and are not buying handsets...We expect that if cheaper SIMs are issued soon we’ll see sales quickly increase again,” she told The Myanmar Times.

She added that the company had responded to the release of K200,000 SIM cards by opening a number of small retail shops, in addition to its larger wholesale outlets.

Ko Maung Maung said Samsung handsets are the most popular with buyers, with Huawei units in second place.

“Samsung is easily the most popular brand of handset but young people also like Huawei phones because they work well with the internet. Both have large screens and are relatively inexpensive,” he said.

“Apple iPhones are also popular but only among rich people,” he said.

Phone user Ma Yu Yu from Mayangone township said: “I have no plan to buy a handset but I’d like to upgrade my phone to the latest model if possible.”

“In others countries, consumers can upgrade their handsets by paying a little extra money every month. From my point of view, if local handset shops offered a similar service the market would be more active and they wouldn’t need to wait for new SIM cards to be released,” she said.

Samsung’s best selling model, its Galaxy Note 2 is retailing for about K525,000, while the Note is about K410,000, Samsung S3 handsets are selling for about K460,000. Huawei’s W895 is K130,000, while its U8833 is K110,000 and the Ascend P1 is K265,000, said Ko Maung Maung.

Most phones in use in Myanmar are imported from China through border trade, although some are shipped through normal trade from Singapore.

“Thai handsets don’t work here,” said U Zaw Tun, the marketing manager of 357 Wholesale mobile handset shop on Bo Aung Kyaw Street.

“Chinese handsets are the best option for many buyers because they are cheap and work well,” he said.

“Young people seem to like the Chinese-made touchphones because they are quite cheap at about K100,000 and can be used to play video games or perform other applications.”