Norway’s Telenor and Qatar’s Ooredoo won licences
today to provide telecommunications services in Burma, beating a bid
from Denis O’Brien’s Digicel and bringing foreign companies into the sector for the first time.
The
bidding in Burma’s first telecoms auction had been seen as a test case
for economic and political change initiated by the quasi-civilian
government that came to power in 2011 after 49 years of military rule.
A
statement posted on the Ministry of Communications’ website said that
if one of the two licence winners failed to meet post-selection
requirements, the back-up candidate would be France’s Orange in
partnership with Marubeni Corp of Japan.
The winners had “committed to offer a wide range of
services to the public at affordable prices in both urban and rural
areas”, it said.
The winners were selected from a
shortlist of 11 bidders, whittled down from more than 90 companies and
consortia that had expressed interest in working in a fledgling market
of 60 million people, where 9 per cent at most have a mobile phone.
State-controlled
Telenor, which has 150 million customers worldwide and operates in
neighbouring Thailand and Bangladesh, said it would launch its network
next year and achieve nationwide coverage within five years.
“We
have established leading mobile operations in five dynamic Asian
markets and today’s announcement underscores the continued success of
Telenor’s strategy of delivering accessible and affordable mobile
communications services,” Sigve Brekke, head of Telenor Asia, said in a
statement.
The government has said it will
finalise the 15-year licences by September and the chosen operators
would need to launch services within nine months. They have to provide
voice services across three-quarters of the country within five years
and data services across half of it.
There was a
last-minute hiccup when the lower house of parliament votedyesterday to
delay the award of the two licences until a new telecommunications law
was enacted. The government body overseeing the tender said parliament
had no authority to delay the process.
The
telecommunications bill is still making its way through parliament, but
the government statement said it was expected to be passed in the
current session.
The absence of legislation
setting out the regulation of the sector had raised concern in the
run-up to the announcement and parliament’s move yesterday added to the
uncertainty.
“These issues could have been raised
and addressed with the government much earlier in the process,” said
Marae Ciantar, a lawyer with the Singapore-based firm Allens, which has
advised international telecoms companies seeking to invest in Burma.
He
added that “investors will likely commend the government for adhering
to the announced timetable and process for selecting the winning
bidders”, but said the timing of the parliamentary motion “does give
rise to concerns as to what may really have been behind the decision”.
The
motion passed by Burma’s lower house yesterday also stipulated that
licences should go only to bidders that had domestic companies as
partners in a joint venture.
“The attempt to impose such a requirement does give rise to real concern for investors,” said Mr Ciantar.
He
noted that the foreign investment law passed last year did not include
such restrictions on the telecoms sector, while the government “made it
very clear during the tender process that joint ventures with local
partners were not required”.
Soe Yin, a
parliamentarian with the pro-government Union Solidarity and Development
Party, which is made up largely of retired military officers, said the
motion called for further discussion on the issue, but did not entirely
reject the notion of full foreign ownership.
“Some
people are not happy we are giving all these tenders to the private
foreign companies,” he told reporters in Naypyitaw, the capital. “Some
of the local businessmen, they are worrying about the future.”
Building
telecommunications networks is expected to bring a leap forward in
digital technology that could speed up economic development in Asia’s
poorest country after Afghanistan.
Burma is one of
the world’s last telecoms frontiers and companies have been lobbying
hard for the chance to get into a potentially huge market. But faced
with big investment and uncertain returns, some bidders dropped out of
the auction.
Vodafone Group and China Mobile abandoned their joint bid, saying it did not meet their “internal investment criteria”.
The
remaining short-listed contenders, some of whom had local or foreign
partners, were: Singapore Telecommunications, KDDI Corp, Digicel,
Axiata, Bharti Airtel, MTN, Vietnam’s Viettel, and Millicom
International Cellular.
source: Irish Times
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