http://www.bangkokpost.com/business/news/3...against-singtelMyanmar’s contest for two telecommunications licenses attracted bidders from around the globe seeking a foothold in one of the last remaining untapped markets, where only one in 10 people has a mobile phone.
The winners are scheduled to be announced on Thursday, ending a six-month race that drew 91 expressions of interest to operate in the country of 64 million people. Norway’s Telenor ASA, Singapore Telecommunications Ltd (ST), billionaire George Soros and France Telecom SA (FTE) are among the 11 remaining bidding groups.
“It’s a tremendous growth opportunity, but it will require a fair bit of investment, and returns will be long dated too,” said Sachin Gupta, a Singapore-based analyst at Nomura Holdings Inc. “I don’t think it’s going to be an easy exercise for anyone, but having previous green-field experience and strong local partnership should help.”
The licenses are among the biggest prizes for foreign companies since Myanmar President Thein Sein moved to allow greater political and economic freedom after taking power in 2011. The United States and European Union have moved to ease sanctions, attracting companies such as Coca-Cola Co and Ford Motor Co to the former military-run state even as human rights groups warn of abuses against ethnic and religious minorities.
The government plans to proceed with naming the winners even after parliamentarians moved to delay the announcement, Set Aung, deputy minister of national planning and economic development who is overseeing the process, said on Thursday by phone.
“We have selected two winners,” he said. “We will go ahead and announce the winners today if we don’t get any intervention from a higher authority.”
No Bias
Set Aung said that while he’d prefer local companies, the process complied with international practices.
“The playing field should be level,” he said. “We, the technical team, aren’t biased in the selection of the winners.”
Myanmar plans to boost telecom coverage to as much as 80% of the country by 2016. It has a mobile-phone penetration rate of 9%, compared to 70% in Cambodia, 87% in Laos and more than 100% in Thailand, the Communication Ministry said in January.
The government named 12 groups of companies as finalists for two licenses that will allow carriers to build and operate a nationwide wireless network in the country for 15 years.
“I have never seen any investors who are not coming to a country before everything is perfect,” Set Aung said by phone yesterday. “All the companies understand there are risks. Some companies probably think there is too much risk, and other companies think it’s a calculated risk.”
Vodafone Withdraws
Bidders include Bharti Airtel Ltd, Telenor ASA (TEL), Singapore Telecommunications Ltd, Digicel Group Ltd, Axiata Group Bhd (AXIATA), France Telecom SA and Marubeni Corp, KDDI Corp and Sumitomo Corp, Millicom International Cellular SA (MIICF), MTN Group Ltd, Qatar Telecom QSC, and Vietnam’s Viettel Group. Four of the bidding groups include a local partner.
Vodafone Group Plc and China Mobile Ltd, the two biggest mobile-phone companies, withdrew their bid on May 31, saying the returns wouldn’t justify the investment required.
SingTel, which is bidding with KBZ Group and Myanmar Telephone Co, would build a mobile network covering 95% of the country’s population within 36 months, according to a June 11 statement. SingTel has 468 million mobile-phone customers in countries including India, Indonesia, Thailand and the Philippines, according to the company. SingTel also offered to lend assistance to Myanmar’s efforts to launch a national satellite.
KDDI and Sumitomo are bidding along with Myanmar Information and Communication Technology Development Corp and A1 Construction, while MTN’s group includes local company Amara Communications.
Digicel, Soros
The group led by Digicel, Soros and Myanmar property developer YSH Finance Ltd. pledged to invest US$9 billion. The companies would roll out a so-called fourth-generation mobile network across the country by Dec 1, and its wireless service will reach 96% of Myanmar’s population by 2016, the group said in a statement June 3.
Telenor on April 12 said it would leverage its experience in operating mobile networks in Thailand, Malaysia, India, Bangladesh and Pakistan “to provide rapid delivery of high-quality mobile network and services throughout Myanmar.” It didn’t disclose an investment value.
France Telecom strategy chief Elie Girard earlier this month described Myanmar as “the biggest telecom desert” with less telephone use than in North Korea or Cuba. The company, bidding with Japan’s Marubeni, is prepared to spend $1 billion to build a network by 2019 and will cover more than 75% of the country’s geography in five years, Girard said. Chief Executive Officer Stephane Richard said June 25 that the company had a “good chance” of winning a license.
Human Rights
Bharti Airtel Ltd. (BHARTI), India’s largest mobile carrier, may spend about $1 billion to set up a network, the Times of India reported on June 8, citing Chairman Sunil Bharti Mittal.
Myanmar had 5.44 million mobile-phone subscribers as of December, equivalent to a 9% penetration rate, the government said in January. About 1.3% of the population has access to fixed-phone lines and 0.03% has broadband Internet, according to the Asian Development Bank.
In May, New York-based Human Rights Watch warned that companies bidding for the licenses risk being linked to human rights abuses if they invest before laws are in place to protect against illegal surveillance and censorship.
Jun 27 2013, 02:58 PM
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