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A customer buys a phone at a mobile phone shop in Yangon on June 3, 2013/AFP

Technology

Myanmar awards telecom licences to Telenor and Ooredoo

A customer buys a phone at a mobile phone shop in Yangon on June 3, 2013/AFP

A customer buys a phone at a mobile phone shop in Yangon on June 3, 2013/AFP

YANGON, Jun 27 – Myanmar on Thursday 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.

After a three months of deliberation the committee “is pleased to announce the two successful applicants”, from the 11 global consortiums remaining on a shortlist for the potentially lucrative licences, according to the statement.

Myanmar launched the tender, which is conditional on a telecommunications law yet to pass parliament, in the hope of quickly increasing mobile coverage across the country where less than 10 percent of the population having access to a telephone.

France’s Telecom Orange and Marubeni Corporation of Japan, will be back up options if either of the two successful firms fails to meet the selection criteria, the committee added.

Myanmar lags its neighbours in mobile coverage and is desperate to quickly narrow the gap with affordable coverage to help spur development.The bid process has also been closely watched as a bellwether of economic reforms aimed at driving rapid foreign investment in the nation, which has witnessed sweeping changes since a quasi-civilian government replaced the military regime 2011.

Valid for 15 years, the licences are the first to be awarded by the formerly junta-ruled nation, and will see the two foreign firms enter a market once monopolised by a pair of state companies.

Telenor said it will launch voice and data service next year and plans to rollout coverage nationwide within five years a key condition laid down in the tender by Myanmar.

Sigve Brekke, head of Telenor Asia, voiced hopes the sector “will play a key role” in the country’s “socioeconomic development.”

The winners saw off fierce competition from major telecoms players including Singtel, Bharti Airtel and the Digicel group led by billionaire financier George Soros, who were all eyeing the vast potential of Myanmar’s 60 million population.

Neither firm immediately released figures on the value of the bid or how much money they will plough into establishing a mobile network across the impoverished and remote country.

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But one bidder previously had estimated the required spending to develop a Myanmar network at about $2 billion, while Digicel group pledged to spend more than $6 billion in the country.

Telenor and Ooredoo, formerly known as Qatar Telecom, will have to adhere the Telecommunications Law which will be considered by Myanmar’s fledgling parliament this session, the government committee added, without giving further details.

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