Jun 27, 2013

Myanmar To Grant Wireless Licenses To Norway's Telenor, Qatar Telecom

One of Asia’s least connected countries is getting wired at last. Myanmar said Thursday that it had awarded cellular-phone licenses to Norway’s Telenor and Qatar Telecom, ending months of speculation over which foreign consortia would get the nod. Ten other bidders had sought to build out networks in Myanmar, a country of around 60 million people with less than 9% mobile phone penetration. Myanmar, also known as Burma, already has two domestic cellphone operators, but service is poor. Foreign investment in infrastructure like telecoms is seen as crucial to bring Myanmar into the modern era. The 15-year wireless licenses take effect in September and would represent the largest foreign investment in Myanmar since a semi-elected government took power in 2011, ending decades of isolationist military rule.

An eleventh-hour intervention by Myanmar’s parliament muddied the waters for Thursday’s announcement: the lower house voted Wednesday to delay the licenses until a new Telecommunications Law had been passed. But advisors to President Thein Sein insisted that the licenses would be awarded and that parliament wasn’t able to block it. Investors may question the legal certainty of state licenses in the face of opposition in parliament, which is controlled by Thein Sein’s ruling party. Any delays to the rollout of phone services would be unpopular in Myanmar’s cities, where protests erupted last year over electricity blackouts.

Among the bidders who didn’t make the cut were France Telecom , Singapore Telecom, Bharti Axiata and Digicell, which teamed up with George Soros‘s Quantum Fund. Neither Telenor nor Qatar had a local partner in their bidding consortia, though they will likely need subcontractors able to secure cell tower locations and build in remote areas. Qatar Telecom has said it would invest up to $15 billion in order to connect 90% of people to 3G data networks within two years, which is faster than the government’s timetable. How soon they can make a return on their capital outlay is harder to predict. Vodafone Group and China Telecom recently withdrew their joint bid for a wireless license, saying it didn’t offer sufficient returns.

Source: Forbes

 
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