ASIA NEWS NETWORK

WE KNOW ASIA BETTER



» News

Myanmar govt, parliament split over mobile license announcement

Publication Date : 27-06-2013

 

Myanmar's parliament on Wednesday resolved to postpone announcing the winners of two mobile operating licences, claiming the announcement should be delayed until a proposed telecommunication law is passed.

Despite this setback, sources in government have claimed they will still announce the two winners on Thursday adding suspense to the international race for Myanmar’s untapped mobile market.

Deputy Minister Set Aung, who is also chairman of the Bidding Committee for Telecom Operators has claimed that the announcement will go ahead as planned.

"Despite the parliament's 100-per-cent approval for postponement of mobile operating licences, we will announce winners today," said Set Aung.

"The Bidding Committee is a technical team, it is not concerned with politics. If the President’s Office, which assigned us bidding process, did not issue any order, then we will announce the bid winners," he added.

The bidding process has attracted over 90 interested companies of which 11 consortiums remain in what experts say has been one of the most international races for one of the world’s last mobile frontiers.

The absence of a law governing the sector has been a source of concern for some bidders, in fact Vodafone Group and China Mobile Ltd recently dropped out the race saying it did not meet their "internal investment criteria".

Not knowing how the sector will be regulated has led some to believe that this will give unfair advantage to the two government-owned companies who currently dominate the market.

What is certain is that Myanmar’s communications industry will need a complete overhaul. Currently less than 10 per cent of Myanmar’s 60 million population use mobile phones and the chosen companies will have to invest heavily in infrastructure to provide nationwide networks.

The process is being closely monitored by investors worldwide as an important test case as the government embarks on a series of economic and political reforms after decades of military misrule.

The current setback has left investors biting their nails in anticipation, as speculation abounds as to who will be granted one of the two lucrative licences. Eleven Media provides a breakdown in alphabetical order of the remaining 11 contenders in the race, analysing some of their strengths and weaknesses:

- Axiata is Asia’s third largest mobile service company. Headquartered in Kuala Lumpur, it is operating in Malaysia, Indonesia, Sri Lanka, Bangladesh and Cambodia. It has not yet publicly disclosed how much it will invest in Myanamar should it be granted a license.

- Bharti Airtel is the world’s 4th largest telecom company, with a presence in 21 countries across Asia and Africa. Headquartered in India it has extensive experience working in countries with similar experience to Myanmar.

- Digicel is a private Jamaica-based telecoms company with operations in 31 countries, mostly in the Caribbean and Central America. Digicel are teaming up with George Soros’ Quantum Strategic Partners and YSH Finance, a joint venture between Yoma Strategic Holdings and local company First Myanmar Investment (FMI). The consortium has announced it will invest about US$9 billion if it wins the tender. They have produced a strong marketing campaign and are seen as a top contender.

- KDDI is Japan's second largest telecoms company and has operations in 28 countries. Alongside Japanese conglomerate Sumitomo Corporation, KDDI has two Myanmar partners — Myanmar Information and Communication Technology Development Corporation (MICTDC) and A1 Construction Company Ltd. With the variety of players in its consortium, KDDI is seen as a strong contender, being helped by the Japanese government's decision to write off billions of dollars of Myanmar's debt.

- Millicom International Cellular S.A. is a Luxembourg-based telecom company with operations in Latin American and Africa where it has already reached tens of millions of people through its brand ’Tigo’. It is providing service in Africa and Latin America. Myanmar will become its first Asian market if the company wins the tender.

- MTN Consortium (MTN Dubai + M1 Limited + Amara Communications) have also joined hands with Myanmar partners. MTN is one of the world's largest mobile operators, with nearly 200 million subscribers across Africa, Asia and the Middle East. The South Africa-based multinational has teamed up with M1 Limited, Singapore's second largest mobile operator and Myanmar’s Amara Communications, a subsidiary of IGE Company Limited.

- France Telecom-Orange and Marubeni. The Paris and NYSE-listed telecoms operator has a presence in 32 countries and is in partnership with Marubeni, a Japanese conglomerate with operations in 65 countries and a total of 120 offices. The technical expertise and experience in various telecom markets makes them a strong contender however experts say their lack of a local partner could weaken their chances.

- Qatar Telecom (Ooredoo) is Qatar's national telecom company (formerly QTel) and has operations in 17 markets across the Middle East, North Africa, and Asia. Ooredoo has kept a much lower profile than most of the other companies, and the brand is not well known in Myanmar. That said, it did announce that it would spend $15 billion in Myanmar if it is chosen for a license, the largest sum so far announced in the tender. It has also claimed that it’s networks will reach 90 per cent of the population in Myanmar within tow years through the construction of 10,000 base stations.

- SingTel Consortium (SingTel + Kanbawza Bank + MTel) have put together a strong team and bid for one of the licences. Singtel is one of Asia's largest operators with a presence in Indonesia, the Philippines, Thailand and Bangladesh as well as Singapore and Australia. The strong historical ties between Singapore and Myanmar is seen as an advantage as well as their choice of partners. SingTel is running with Kanbawza Bank (KBZ), Myanmar’s largest bank with strong connections and involvement in airlines, construction, mining and other industries; together with Myanmar Telecom Company (MTel), a smaller company involved in telecoms infrastructure and construction.

- Telenor is a state-owned Norwegian company with operations in 11 markets. Telenor has not revealed the amount of money it will invest in the sector but like Digicel has run one of the strongest marketing campaigns building up its brand from virtually nothing. It has chosen not to work with a local company, probably because its state-owned status makes partnerships with local companies difficult.

- Viettel is the largest mobile phone network provider and military-owned telecommunication provider of Vietnam. Viettel has a presence in seven countries including Cambodia and Laos. Economic and political relations between Vietnam and Myanmar have improved in recent years, with major Vietnamese investors looking at moving into Myanmar. Having a foreign military-owned company involved in Myanmar’s telecommunications sector my be a contentious issue in it’s bid for one of the licenses.

 

Mobile Apps Newsletters ANN on You Tube