Jul 17, 2014

Myanmar's state telco partners with KDDI, Sumitomo

Companies pledge to bring 'Japanese-quality' fixed and mobile services to Myanmar.
Myanmar's state-owned telecoms incumbent has brokered a partnership deal with Japan's KDDI and Sumitomo Corporation that will see the companies jointly operate telecoms services in the country.

Myanma Posts and Telecommunications (MPT) has been seeking a partner for some time, and KDDI was widely tipped to be the most likely candidate. MPT officially inked the deal on Wednesday.

KDDI and Sumitomo were part of a consortium that made it to the final stages of Myanmar's telecom licensing competition last year. The contest, which attracted 91 bidders, ended in June 2013 when Qatar's Ooredoo and Norwegian operator Telenor emerged victorious.

With Ooredoo and Telenor both set to launch services in the coming months, Myanmar's state-run players are readying themselves for competition.

MPT already offers limited mobile services, but with prices out of range for most people, penetration is languishing at around the 10% mark. ISP Yatanarpon Teleport (YTP), a joint venture between the state and local companies, is also gearing up to enter the mobile market and it too is on the hunt for partners; Orange, True Corp and Axiata are reportedly on its shortlist.

KDDI and Sumitomo Corp have set up a joint venture, KDDI Summit Global Myanmar (KSGM), through which they will conduct their business in Myanmar. KSGM has signed an agreement with MPT regarding the joint operation of services that lays out the terms of the cooperation, including profit-sharing, but the companies have not made the details public.

"The joint operations will provide 'Japanese-quality' services," in both fixed and mobile, by upgrading the existing telecoms infrastructure in Myanmar, KDDI said in a statement. The firms will also focus on customer service in call centres and retail outlets, it added.

"Myanmar is experiencing a rapid move towards democracy and the market in mobile phones and fixed line communications is expected to grow dramatically in the future," said KDDI president Takashi Tanaka.

"Taking advantage of the wealth of experience and knowledge that we have built up both inside and outside Japan through our mobile phone operations in Mongolia, MVNO business in the U.S. and other operations, KDDI will provide the same level of Japanese-quality services to Myanmar and contribute to the country's growth and development," he added.

Meanwhile, Sumitomo Corp highlighted its experience in the broader infrastructure market.

"Our business record in Myanmar stretches over 60 years, where we have undertaken railway, telecommunication, and broadcasting improvement projects, power generation projects, as well taking part in developing the Thilawa Industrial Park," noted the firm's president and CEO, Kuniharu Nakamura.

"Using the know-how and experience that we have thus cultivated, we will do our part to support the improvement of living standards and industrial development in Myanmar through this joint operation," he said.

Source: Total Telecom