Myanmar to be strategic market in FPT Corp’s global investment plan

FPT office in Yangon, Myanmar. Source: FPT Corporation

Posted July 14th, 2015 by Nguyen Thi Bich Ngoc (@NgocNguyenDSA ngocnguyen@dealstreetasia.com) & filed under Deals & Investment

 

 FPT Corporation, Vietnam’s leading tech firm, has become the first overseas business to be granted the Network Facilities Service-Individual telecommunications service license – NFS(I) – by the Myanmar information and communications technology ministry.
FPT has been in the country since 2013 and the company executives maintain that Myanmar is “one of the strategic destinations in its global penetration map”.
The NFS(I) license has a 15 year duration, taking effect from July 6.
FPT will be allowed to provide fixed line telecoms, internet services and other value added services such as the Internet Protocol Television (IPTV), games, e-News and e-Commerce, based on the permit to deploy a nation-wide network infrastructure in the 56 million people country.
As the only foreign company to secure the permit so far, FPT will be in the race with six local players, who have already gained the NFS(I).
“It is a big success for us to have been trusted and granted the license. With our experience and capability in providing telecom services in Southeast Asian markets such as Vietnam and Cambodia, FPT hopes to contribute to the development of telecoms infrastructure in Myanmar, enhancing the broadband internet service quality, and creating favourable conditions for applying IT to government and enterprise management in Myanmar,” said Duong Dung Trieu, FPT’s deputy CEO in charge of global business, who was selected to be FPT Myanmar’s chairman in January.
In Vietnam, FPT does not provide mobile services like the military-run network operator Viettel and the Vietnam Post and Telecommunications Group (VNPT). However, it is a strong competitor to those network carriers in terms of fixed-line and internet services, software and system integration. In addition, the tech giant is also operating in tech education, e-government, finance and most recently, venture capital.
Also read: Vietnam’s FPT Corporation kicks off accelerator & VC arm with $3m seed fund
“Our strengths will be brought into play in the Myanmar market, as the barriers in terms of bandwidth and Internet line quality in the country have been removed,” said FPT Myanmar CEO Doan Nhat Minh.

Myanmar as a long-term target

FPT is ready to tap the potential that Myanmar offers. With a population of approximately 56 million people and an increasing number of Internet users, while the local Internet connection quality is relatively poor, Myanmar is seen as a hotbed for both local and foreign companies. The economy is on track to grow at 9.5 per cent annually by 2030.
The Vietnamese tech firm reveals that Myanmar is a key market in its global roadmap. Its foray to Myanmar started in February 2013, when it set up a representative office. FPT Myanmar, as a subsidiary, was launched in July the same year.
FPT Myanmar has 60 employees and a $13.5 million turnover in 2014, most of which came from FPT Trading unit, a distribution network of smart devices, Internet network components and software products. Other units that have presence in Myanmar include FPT Information System (FPT IS), FPT University, FPT Software and FPT Telecom.
The company said its ambition is to experience a disruptive growth as it had achieved in Vietnam during 2003-2007. Prior to the listing in December 2006, its growth had hit as high as 60-70 per cent.
FPT sees Myanmar as Southeast Asia’s fastest growing economy, which generates a series of attractive investment opportunities to overseas investors. The economy is poised to grow by four times to $200 billion by 2030.
Also read: Myanmar attracts Vietnamese cos, bilateral trade to touch $500m in 2015
“If only one per cent of Myanmar population had access to the Internet some three years ago, the percentage is now 25 per cent,” added Minh, who commented that it is an astonishing growth for a telecoms market.
U Maung Maung Thein, general secretary of the ruling Party of Myanmar, encouraged FPT to develop not only telecom solutions but also banking and finance services in his country, as he met FPT Myanmar executives last month.
The openness of the local government to attract foreign investment is a win-win that helps Myanmar develop important infrastructure projects while creates tremendous growth for investors.
In January, FPT IS launched the enterprise resource planning (ERP) contract with United Paints Group, Myanmar’s largest private company, which is also FPT IS’ first client. The project is implemented for the entire system of UPG’s headquarter, five Myanmar-based branches and a subsidiary in Singapore.
FPT IS said it will continue to seek more deals with local companies.

Global – and OneFPT

Following the steps of Viettel, the Bank for Investment and Development of Vietnam and property developer Hoang Anh Gia Lai in Myanmar, FPT has catapulted its OneFPT campaign that was kicked off in 2011 and was designed to lead FPT to be Vietnam’s number one multinational group.
Also read: Viettel Global increases capital to fund new overseas investment
According to FPT chairman Truong Gia Binh, whether it is Internet or banking, Europe or Southeast Asia, it is this “OneFPT” that develops such services.
A year prior to receiving the NFS(I), FPT won telecoms license in Cambodia and has become the leading fixed line service provider in the Indochina country. “We are striving to reach a growth milestone that is set by the last three years combined,” FPT Cambodia (OpenNet) CEO Phung Hung expects.
“If Vietnam has more companies like FPT, foreign investors will have a better view for the country,” said the information and communications minister, Nguyen Bac Son, during his visit to FPT Japan.
FPT currently has offices in 19 different countries. Revenues from overseas markets in 2014 jumped 37 per cent to $174 million. The company aims to reach an overseas revenue of $1 billion within the next five years.

Also read: Vietnam emerging as strong alternative to traditional outsourcing markets

One of its largest foreign markets for the company is Japan, where FPT employs more than 400 people working in three major cities of Tokyo, Osaka and Nagoya.
Tsutomu Hatakeyama, deputy director of FPT Japan, says that the rate of Japanese companies that lack IT resources has increased from 48 per cent five years ago, to 83 per cent. FPT plans to capitalise on this niche and is targeting a $600 million sales from this market by 2020.