Monday, 1 July 2013

Myanmar Telecom Deal with Qatar Firm Draws Religious Factions, Criticism

By : Subscribe to Lawrence's | July 1, 2013 5:05 AM GMT
(Photo: Wikipedia)<br>Myanmar military
(Photo: Wikipedia)
Myanmar military
Monks and other religious in Myanmar launched protest rallies in a quest for an explanation as to why a deal for a nationwide mobile phone network was awarded to a firm from a Muslim country. The deal proves to be a lucrative one for only a little over ten percent of the country's entire population have access to cellular phones.
To open the country further, the military government loosened its grip and it now allows third-party contractors to operate mobile infrastructure in hopes of giving mobile phone access to 45 million Burmese by 2015. Aside from the Qatar's Ooredoo which was formerly known as Qatar Telecom, Telenor of Norway was seen as the presumptive winner of the bidding. As predicted, Telenor was awarded with a 15-year contract to build Myanmar's mobile phone network.
But when a contract also awarded by the country's Telecommunications Operator Tender Evaluation and Selection Committee to the Qatari company, the reception was not positive. There are those who say that they will not use Ooredoo-made products and some claim that this will negate the country's drive to protect its people. One Buddhist movement in particular, 969, persuades its supporters to not patronize Muslim businesses and not deal with them in any aspect.
Aside for Ooredoo and Telenor, other bidders include South Africa's MTN, Singapore Telecommunications, Ghana's Millicom, Caribbean provider Digicel, KDDI of Japan, Vietnam's Viettel and Bharti Airtel of India. Over 90 telecommunications providers submitted bids for the national mobile phone project of Myanmar but only 11 were shortlisted.
In an official statement, Ooredoo answered by indicating the high volume of jobs and income opportunities that this project can generate. Currently, Ooredoo has the biggest stake in Indonesia's Indosat. It also maintains stakes in StarHub of Singapore and Laos' major phone company.
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It was reported that in 2011, only three percent of Myanmar's population had access to mobile phones. This is a low figure especially that the gadget has become a need rather than a luxury even in poor nations in the world. In Laos, 87 percent of its population already has access to mobile phones. What makes it tougher to get access back then is that a SIM Card costs $2,500. There is also speculation that mobile phones are also being tracked by the government.
Aside from this, providing electricity for related infrastructure would also be tough because only 13 percent of the Myanmar population has access to electricity. If that is not hard enough, the contract is part of a series of initiatives from the Myanmar govenment to democratize majority of its economy before the 2015 national elections. The deal calls for Ooredoo to provide mobile phone access to 25 percent of the Burmese people within one year.
In five years, 50 percent of the population must have cellular data access while 75 percent can already make phone calls. The Myanmar government sees the mobile phone industry as a must because it will drive Internet usage up and it can facilitate mobile banking. However, Telenor and Ooredoo should step up their efforts for the government specified that France Telecom and Japan's Marubeni Communications will be awarded the contract if the two winners failed to deliver.
Despite the steep conditions, the contract can bring financial dividends because Myanmar has an underdeveloped mobile phone market. Also, the winning companies can proceed with installing the latest mobile phone technology to instantly keep Myanmar's facilities at par with the rest of the world. However, there were issues raised about potential corruption and lingering state control which can heavily influence the progress of this partnership.
In a related interview, Telenor CEO Jan Fredrik Baksaas said that the growth of the mobile phone industry in Myanmar will be significant since it will start from practically nothing. However, he added that they will use the same initiatives done in Pakistan wherein they spent $2 billion over eight years. Baksaas also projected that Telenor will only gain back what they invested after three years. Despite the developments, Telenor's shares at the Oslo Stock Exchange went down by 0.3 percent to 121.4 kroner. In contrast, Ooredoo's shares went up by one percent to 120.5 riyals.
Meanwhile, the non-awarding of a contract stings the most for Ireland's Digicel for they have been publicly courting the Myanmar government for a contract. Before the awarding, the company already had close to 1,000 employees in Myanmar and they also agreed to finance the country's soccer league. But then again, Telenor and Ooredoo might have won for now.
However, they might face growing pains in the coming years especially that the governing laws for their operations are non-existent and they only have five years to deliver significant results or their services will be terminated. Still, the two companies remain positive that this investment will bring great dividends. With reports from AP

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