Jun 3, 2013

MTN gets boost in Myanmar bid

MTN’s chances of winning the bid for a telecom licence in Myanmar were boosted on Saturday when Vodacom’s parent, Vodafone, announced it was quitting the contest.

Vodafone and China Mobile said they were no longer bidding for the Myanmar licence as they no longer expect the investment to generate sufficient return, in spite of the country of 60-million people being one of the last undeveloped markets for mobile operators. The two firms had teamed up to pitch for one of the two licences being tendered, forming one of the most heavyweight bids on the short list of 12 global telecom groups selected for the next round by the Myanmar government.

The companies said on Sunday they had withdrawn from the process ahead of final bids being tendered to the Myanmar authorities next week. Vodafone said the publication on May 20 of the final conditions required by the government had indicated that Myanmar’s telecoms licence would not meet investment criteria for either Vodafone or China Mobile.

Vodafone, in particular, had hoped to win a licence, and get the chance to bring its mobile-money platform, M-Pesa, to a country that lacks an established banking system. But talking to the Financial Times in April, Vodafone CE for Africa, Middle East and Asia Pacific, Nick Read, acknowledged the challenges in establishing a telecoms business in a country with little infrastructure, regular power shortages and a low level of technical and management expertise.

There is also an ambitious timetable for the project, given the requirement to build a national telecom network by 2016.

A person close to Vodafone said the decision had not been influenced by recent criticism of Myanmar from human rights groups.

Others bidding for a licence include a consortium led by Digicel Group, the mainly Caribbean telecoms company, backed by George Soros, Qatar’s Ooredoo, Telenor, SingTel and MTN. The successful bid will be announced at the end of this month.

The country remains attractive to operators, given that less than 10% of its people use a cellphone. There are few other countries with the combination of a large untapped market and the expectation of rapid economic growth. The successful bid will be charged with building and operating mobile networks for at least 15 years. The infrastructure project is seen as a key stimulus to wider economic progress.

MTN said last month: "We are excited about adding the Myanmar people to our diverse global workforce of 27,000, comprising more than 50 nationalities. MTN has a proven skills transfer practice through job rotation and cross border deployment and these opportunities will also be available to the staff of MTN Myanmar."

Source: Financial Times