Billboards like these at Myaynigone Junction, Sanchaung township, will soon be leased by the highest bidder.

THE face of Yangon City’s billboard advertising landscape is set to change as the Yangon City Development Committee (YCDC) finalises changes to the system used to allocate advertising space.

U Zaw Win, the YCDC engineering department’s (Building) chief engineer, told The Myanmar Times on November 19 that new regulations are being drafted that will see advertising space sold to the highest bidder in the future.

“In addition to re-drafting billboard advertising regulations within the city, we are also selecting areas where advertising will be allowed,” he said, adding that the new rules are likely to take effect sometime in December.

“We have suspended billboard license applications since the start of November and will not be issuing any new permits until the regulations are finalised,” he said.

Previously, potential advertisers had to submit advertising design and location plans to the YCDC for approval. If permission was granted, advertisers paid a set fee of K3500 or FEC38 per square foot of space for local and foreign products respectively. Once paid, the billboard space was then leased for one year.

But that is about to change.

U Zaw Win said prices per square foot under the new bidding system will start at K3500 and FEC38, and then rise according to market demand. However, the prices listed above are an absolute minimum and tenders below these will not be accepted.

“Anybody who wants to set up billboards around the city will now have to offer sealed tenders to the department listing the highest price they are prepared to pay for a given location. We will then lease the space to the company or person who is willing to pay the most,” he said.

While the new regulations are sure to increase competition within the industry and raise department revenues, some operators – like U Than Htut Win, director of Merry Myanmar Advertising Group (MMA) – say they are worried about the impact the changes will have on the market.

MMA is the fourth-largest player in the outdoor advertising market and manages about 10 percent of the billboards in Myanmar.

“I think it will certainly increase market competition because companies will have to fight one another to get the best advertising locations but I’m sure that costs will increase.

“I estimate that operational costs will rise by about 20pc and our sales will fall by as much as 40pc because the higher prices will drive clients away. I worry that this might depress the industry as a whole,” he said.

Daw Latt Latt Kyaw, director of 21 Advertising Group, which leases 50 billboards around Yangon, agreed that operating costs will surely rise when the new tender system comes into effect.

“Our operating costs are certain to rise when this new system is put in place. Obviously, this will mean that business will be more challenging,” she said.

Daw Latt Latt Kyaw said her company charged clients K8000-10,000 for every foot of advertising space – depending on the location – for a one-year lease. However, the six townships in the downtown area usually attract a 20pc premium.

Myanmar’s outdoor advertising market is currently home to 10 companies, including two from the Philippines – Ganad and Eye Corp – which, along with the local Youth Force Group, dominate the marketplace, said U Win Than, YCDC engineering department’s assistant chief engineer.

Eye Corp and Ganad were both contacted by The Myanmar Times but neither was prepared to comment on the new tendering system.

U Win Than said total revenues from the 2442 billboards placed around Yangon reaped more than K700 million in the last financial year.