Ooredoo and Telenor awarded licences in Myanmar

Qatar’s Ooredoo and Norway’s Telenor won licences to provide telecommunications services in Myanmar.

Companies have been lobbying hard to enter the market, despite the risks of rolling out costly networks in a country that has yet to pass a law to govern the sector.

Ooredoo plans to spend US$15 billion over the 15-year licence period, including operational and capital expenditure, licence fees and taxes, Jeremy Sell, Ooredoo chief strategy officer, told Reuters.

"The licence is actually a small part of it," said Sell.

He said Myanmar’s relative lack of mobile communications infrastructure was advantageous in that his company would not need to upgrade old networks, but could create a purpose-built data network with voice capabilities.

"It’s not a mobile phone business we are building, it’s a broadband network," he said, adding Ooredoo’s Myanmar operations were likely to break even after four years.

The Ministry of Communications said that if one of the two licence winners failed to meet post-selection requirements, the back-up candidate would be France’s Orange in partnership with Marubeni Corp of Japan.

The winners had "committed to offer a wide range of services to the public at affordable prices in both urban and rural areas", it said.

The lower house of parliament voted on June 26 to delay the award of the two licences until a new telecommunications law was enacted, but the government body overseeing the tender said parliament had no authority to delay the process.

"In the telecom sector, there is geopolitical risk and regulatory risk and it (Myanmar) has them both," said Ooredoo’s Sell.

"It’s a very young democracy and the organs of state are in their infancy and don’t have much experience, but we were very pleased the process was so intelligently planned and executed and with transparency. So if they continue as they have started we would be very happy."

The winners were selected from a shortlist of 11 bidders, whittled down from more than 90 companies and consortia that had expressed interest in working in a fledgling market of 60 million people, where nine per cent at most have a mobile phone.

State-owned Posts and Telecommunications (MPT) is the sole provider of telecom services, according to its website.

State-controlled Telenor, which has 150 million customers worldwide and operates in neighbouring Thailand and Bangladesh, said it would launch its network next year and achieve nationwide coverage within five years.

The government has said it will finalise the 15-year licences by September and the chosen operators would need to launch services within nine months. They have to provide voice services across three-quarters of the country within five years and data services across half of it.