Consortiums headed by France’s Orange Group, Japan’s KDDI and Singapore’s SingTel – which were beaten by Telenor and Ooredoo in a hotly contested licence auction in June – are being considered by the government. An announcement is expected on December 18.
The government invited the three consortiums to submit proposals for the partnership in early November. All three responded prior to the December 5 deadline.
An official from KDDI in Yangon confirmed on December 10 that the company had submitted an application to work with MPT but would not provide details on the type of partnership it had proposed. The official said only that the company hopes to collaborate with MPT “in the near future” and MPT’s choice is “confidential”.
France Telecom senior vice president Dominique Espinasse confirmed that the consortium of Orange and Marubeni Corporation of Japan had also submitted a proposal.
Mr Espinasse said that a foreign operator would, “bring specific knowledge” to a partnership with MPT and “the capacity to help them [MPT] transform into a competitive operator”.
A spokesperson from SingTel said only that the company “continues[s] to seek opportunities in Myanmar”.
In September, MPT managing director U Aung Maw told The Myanmar Times that the enterprise, which has had a monopoly on telecoms services for decades, had conducted discussions with firms from France, Singapore, Japan, and other Western countries.
“We are now discussing a joint venture agreement with a foreign giant,” he said.
An MPT official said last week that more details regarding the type of partnership would be available when the announcement is made. Another official added that representatives from Roland Berger, the German consultancy firm that advised the government on the licence tender won by Telenor and Ooredoo, had arrived in Nay Pyi Taw on December 11 to assist the government on the process.
All three consortiums in the running were shortlisted in the telecommunications operating license tender in June. KDDI leads a consortium with Japan’s Sumitomo and two local partners: Myanmar Information and Communication Technology Development Corporation and A1 Construction Company.
SingTel is in a consortium with KBZ Group and Myanmar Telephone Company.
Orange and Marubeni Corporation of Japan were selected as back-up options if either Telenor or Ooredoo are unable to fulfill their obligations. It is unclear if Orange would have to forfeit this position if selected to work with MPT.
Bringing in a foreign partner is seen as essential for MPT is to remain competitive as the government liberalises the telecommunications sectors. For more than a decade MPT made millions of dollars selling SIM cards at exorbitant prices – initially as high as US$3000 – but both Telenor and Ooredoo have promising cheaper SIM cards, along with increased network coverage and higher standards of customer service.
“MPT needs assistance to expand and modernise its networks [both fixed and wireless], and a foreign partner can bring expertise and capital to help enable this,” said Roger Barlow, an independent telecoms consultant and the CEO of Hong Kong-based RJB Consultants Limited.
“As, if not more, importantly, a foreign partner can bring urgently needed management skills and expertise in areas such as product development and marketing.”
Telenor has pledged nationwide geographic coverage of 83 percent for voice and 78pc for data after five years. The company has also committed to around 70,000 point of sale locations for SIM cards and more than 95,000 for top-up cards within five years.
Ooredoo has promised to provide nationwide geographic coverage of 84pc for both voice and data after five years. It is promising a larger distribution network than Telenor, with around 240,000 point of sale locations for SIM cards and 720,000 for top-up cards.
Both Ooredoo and Telenor, however, are waiting to sign their final licence agreements, after which they have nine months to launch services.
While companies working with MPT will benefit from an existing customer base estimated at seven million and close ties to the government that will likely bring state contracts, the partnership is likely to come with challenges.
These include an “entrenched culture as a former monopoly telecoms operator”, Mr Barlow said. There are also concerns over the extent to which a foreign partner will have “management and operational control and influence over decision making in the organisation”.
source: The Myanmar Times
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