RANGOON—As the first step of Naypyidaw's low-cost Mobile Phone Plan, the Burmese Ministry of Communications, Posts and Telegraph (MPT) has reduced the cost of SIM cards by around 50 percent.

SIM cards will be available at 200,000 kyat (US$ 250) for GSM and CDMA 450MHz handsets, and 250,000 kyat ($312.50) for WCDMA and CDMA 800MHz versions from March 14, claims a statement in state-run newspapers on Tuesday.

“As regards the matter of mobile phones, we will seek the best way and means to fulfill the wishes of the people," said Burmese President Thein Sen during his inauguration anniversary speech on Thursday.

“Temporarily, SIM cards available from March 14 cannot be used throughout the country as mobile signal coverage networks are being installed. But it will be alright from May when the installation process will be completed,” said an official from the MPT.

The government communication department and its joint-venture private companies will wholesale the cards to mobile phone shops where the public can then purchase them.

“It's good news. Now I'm going to have a mobile phone of my own,” said a real estate broker in Rangoon who currently shells out 30,000 kyat ($37.50) every month for hiring a cell phone. She added that the currently SIM card price tag of $500 is beyond her means.

The price cut announcement comes as rumors circulated that mobile phone connections would be retailed at as cheaply as 180,000 kyat ($225).

The price of SIM cards has become talk of the town since January when a private company, Shwe Pyi Ta Khun, revealed its intention to sell mobile phone connections as low as 5,000 kyat from March—100 times cheaper than currently available.

But the MPT decreed that the company's plan did not meet existing regulations and much more time would be needed to upgrade the mobile phone network system.

The ministry's denial to the company's proposal sparked a small public campaign with leaflets being distributed in Rangoon last week with the slogan “Allow Cheap Mobile/ SIM cards for people!” As a result, 11 people who took part in the protest were briefly detained for questioning.

The systems now used for mobile telecommunication in Burma are GSM and CDMA 450 MHz or 800MHz.

In the late 1990s, a company affiliated with the family of ex-Burmese dictator Ne Win first introduced the GSM network in Burma, selling SIM cards at around $3,300. Since the family's arrest for an alleged coup attempt in 2002, the service has been under the control of the MPT.

The government's telecommunication department has collaborated with companies owned by Burmese tycoon Tay Za, who has been blacklisted by US and European Union sanctions, to sell SIM cards. A July 2009 US Embassy cable published by WikiLeaks also said that Tay Za's companies produced and sold the cards.

For the time being, a GSM SIM card costs $500—a price prohibitively expensive for grassroots people and much higher than those in neighboring countries—and the new price reduction still does not make a difference for those who battle to make ends meet.

“I can't afford that much! 200,000 kyat is somewhat equivalent to my investments,” said Daw Win Mya, 54, a fruit vendor in Rangoon, who has dreamt of having a mobile phone for many years.

“Now the price [of a SIM card] is getting cheaper, it's good. But still out of our reach. I pray the president will make it affordable for us very soon.”

The Burmese government has a plan to sell 30 million SIM cards in five years as the first step of a planned four million cards to be retailed throughout the country, according to a government announcement.