Ooredoo and Telenor hail Myanmar telecom licence

31/01/2014 09:01 AST

Qatari firm Ooredoo and Norway’s Telenor yesterday hailed a “milestone” for Myanmar after finalising telecoms licences expected to dramatically increase mobile phone use in the long-isolated nation.

Only one in ten people in previously junta-ruled Myanmar are thought to have access to a telephone, offering a potentially lucrative pool of customers among the country’s estimated 60mn people.

“Today is an exciting day for Ooredoo as we move closer to bringing world-class mobile services to the people of Myanmar, helping empower communities and people with affordable and easy to access mobile telecommunications,” Ooredoo Myanmar boss Ross Cormack said in a statement.

Telenor, which aims to provide network coverage to 90% of the population within five years, said the country “represents a strong business opportunity”, while Ooredoo said it had already started building its 3G network.

Mobile phones are still a luxury in impoverished Myanmar, with ordinary SIM cards retailing for $200.

Authorities began selling cheap SIMs for less than $2 each through a lottery system last year, but the scheme is relatively small in scale and many people still rely on manned roadside stalls where they can use conventional telephones to keep in touch.

Myanmar has generated huge international investor interest since wide-ranging reforms introduced under the current quasi-civilian government saw most Western sanctions lifted.

But actual investment has been tempered by nervousness over the regulatory framework.

Telenor and Ooredoo were last June named as winners of the telecoms tender process, which saw some 90 firms compete for a slice of one of the world’s last untapped mobile markets. A new telecommunications law was passed last year and the deals were finally agreed this week following months of negotiation.

The licences, valid for 15 years, are the first to be awarded by Myanmar, and will see the two foreign firms enter a market once monopolised by a pair of state companies.

Telenor, which said the licence fee was $500mn, said it expects to break even in three years.

The firm said it would now start building a mobile network, although it acknowledged that the process of reaching Myanmar’s scattered rural communities would likely present hurdles.

“Myanmar is a country where there are a number of challenges and we will need to find solutions,” Bangkok-based spokesman Tor Odland told AFP.

He cited patchy power and road networks as well as regulatory issues such as land rights—a deeply controversial subject in a country.

Ooredoo said the licence was an “important milestone”, adding it expects services to be available in six months in most major cities before rolling out to more remote areas. The firm has previously said it would pump $15bn into the country.

AFP