Telenor and Ooredoo snap up Myanmar concessions

28 Jun 2013

Myanmar authorities have handed nationwide telecommunications licences to Norwegian telecoms group Telenor and Qatar’s Ooredoo – previously known as Qatar Telecom (Qtel) – in a hotly contested beauty contest auction that featured some of the heaviest hitters in the industry. Telenor and Ooredoo saw off competition from the likes of Bharti Airtel, France-Telecom-Orange, Axiata, Digicel, Millicom International Cellular (MIC), Viettel, MTN and Singapore Telecommunications (Singtel). The two winners are obliged to install wireless voice networks with 75% territory coverage for each region and state within five years of receiving their concessions. China Mobile and Vodafone withdrew from the contest earlier this month, citing concerns regarding the demands of the rollout, which the pair saw as a daunting prospect given Myanmar’s limited existing infrastructure and regular power outages.

For its part, Ooredoo plans to invest USD15 billion in the near-untouched market over the next 15 years, although that figure includes spending for OPEX, CAPEX, licence fees and taxes. Ooredoo’s chief strategy officer, Jeremy Sell commented that Myanmar’s lack of mobile 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.’ Whilst the telco expects to reach breakeven within four years, Sell expressed concerns regarding the potential risks: ‘In the telecom sector, there is geopolitical risk and regulatory risk and [Myanmar] has them both. 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 Norwegian company meanwhile said it would roll out an HSPA and Long Term Evolution (LTE)-enabled network, reaching nationwide coverage within five years. A commercial launch featuring a full range of voice and data services has been scheduled for 2014. Telenor said its strategy for Myanmar will be based on four strategic pillars:

• Build a technically-advanced and extensive mobile network

• Drive significant growth in mobile penetration through a rapid network rollout and providing affordable services through an extensive distribution network across the country

• Become the market leader in Myanmar by offering the most comprehensive portfolio, of relevant mobile services of high quality to everyone

• By offering good quality service and an excellent customer experience we aim at creating loyalty and trust with our future customers in Myanmar.