April 11, 2013 1:24 pm

Vodafone eyes M-Pesa launch in SE Asia

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Burmese women try to make a call on their new mobile phone at a local shop in Yangon, Myanmar. Very few Burmese can afford to have a mobile phone which can cost over 600 U.S. dollars just for the sim card and service.©Getty

Vodafone is eyeing the launch of its M-Pesa mobile payment system in southeast Asia for the first time as part of its bid for a licence to operate one of the mobile networks being tendered in Myanmar.

The UK-based telecoms group has teamed up with China Mobile to bid for one of two licences in the country, which are being fiercely fought over by almost every major global telecoms group given the attractions of a largely untapped mobile market. Less than 10 per cent of the roughly 60m people in Myanmar use mobile phones.

The Myanmar government said on Thursday that 12 groups, out of an initial 22 that expressed interest in bidding for a licence, have made the short list. These include the Vodafone-China Mobile team, a consortium backed by George Soros, and Qatar’s Ooredoo.

If it secures a telecoms licence, Vodafone wants to roll out its mobile money service rapidly, which in effect acts as a quasi-currency in countries such as Kenya.

The company expects a potentially big market for M-Pesa in Myanmar given the still-basic banking sector. Vodafone also has plans to extend its mobile business into the health and education sectors in the country, where the government wants telecoms liberalisation to be a central plank of wider economic and social reform.

M-Pesa was launched by Vodafone in 2007 and is widely used in countries where many people do not have bank accounts, given the simplicity and security of its text message-based money transfer system. The service is widely used across Africa and also is being tested in India.

Nick Read, Vodafone chief executive for Africa, Middle East and Asia Pacific, said that mobile money would be important for Myanmar “given a banking sector that is under-developed”.

He said the group was keen to develop the networks quickly, although he added that there was still uncertainty about exactly what the final licence obligations would entail. “It is pretty much green field so we could jump ahead on technologies quickly,” he said.

Myanmar’s government has stipulated an ambitious timetable, aiming for national networks within two years. Mr Read said this was possible, although there would be challenges to overcome in deploying the network infrastructure across the country and practical concerns such as ensuring guaranteed power to the masts. He said an industry of new telecoms experts would also need to be trained to run the operations.

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