Jun 28, 2013

    Telenor, Ooredoo get Myanmar's nod

    MYANMAR yesterday awarded telecom licences to Norway's Telenor and Qatari firm Ooredoo, the government committee in charge of the bids said, opening up one of the world's last virtually untapped mobile-phone markets.

    The committee "is pleased to announce that Telenor Mobile Communications and Ooredoo have been selected as the two successful applicants", from the 11 global consortiums remaining on a shortlist, it said in the statement.

    SingTel, billionaire George Soros and France Telecom were among the bidding groups.

    "It's a tremendous growth opportunity, but it will require a fair bit of investment, and returns will be long-dated too," said Mr Sachin Gupta, a Singapore-based analyst at Nomura Holdings.

    "I don't think it's going to be an easy exercise for anyone, but having previous green-field experience and strong local partnership should help."

    The licences are among the biggest prizes for foreign companies since Myanmar President Thein Sein moved to allow greater political and economic freedom after taking power in 2011.

    The United States and European Union have moved to ease sanctions, attracting companies such as Coca-Cola and Ford Motor to the former military-run state even as human-rights groups warn of abuses against ethnic and religious minorities.

    The government proceeded with naming the winners even after parliamentarians moved to delay the announcement, Mr Set Aung, deputy minister of national planning and economic development, who is overseeing the process, said by phone yesterday.

    He said before that announcement that, while he would prefer local companies, the process complied with international practices.

    "The playing field should be level," he said. "We, the technical team, aren't biased in the selection of the winners."

    Myanmar plans to boost telecom coverage to as much as 80 per cent of the country by 2016.

    Winners of the tender must launch their services within nine months of the licence being granted, and install a network to cover a quarter of the country within a year, and three quarters within five years.

    One bidder has estimated the required spending to develop a Myanmar network at about US$2 billion (S$2.5 billion).

    It has a mobile-phone penetration rate of 9 per cent, compared to 70 per cent in Cambodia, 87 per cent in Laos and more than 100 per cent in Thailand, the Communication Ministry said in January.

    "I have never seen any investors who are not coming to a country before everything is perfect," Mr Set Aung said.

    "All the companies understand there are risks. Some companies probably think there is too much risk, and other companies think it's a calculated risk."