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Myanmar's mobile maze

  • Posted by Tony Poulos
  • July 4, 2013 2:25 PM BST
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The saga of one of the world’s last exploited mobile markets is still unfurling. Outrage, uncertainty and rumours abound after Myanmar grants two new mobile licences.

The saga of one of the world’s last exploited mobile markets is still unfurling. Myanmar, once known as Burma, recently emerged from a period of self-proclaimed isolation, military rule and international sanctions, and decided that it was time to improve its mobile infrastructure.

Following the example of so many other countries, a bidding system was announced by the government for two new mobile operator licences valued by some analysts to be worth at least $1.5 billion. With only 9 per cent of Myanmar’s 60 million population connected, the bidding drew widespread attention and some big players.

Many had been working their positions for years, lobbying ministers, investing in local ventures and supporting Myanmar Post and Telecommunications, the state-owned telephone service provider. No less than 22 applicants entered the fray in the first round to try and secure the rights to build, own and operate national mobile networks for 15 years.

It was recently announced that Norway's Telenor and Qatar-based Ooredoo were the winners beating out competition from nine other shortlisted individual or consortium bidders including SingTel, Bharti Airtel, Axiata and KDDI.

Almost immediately intrigue and suspicion surrounded the announcements made by the selection committee despite the nation's lower house having agreed to delay the awarding until a new telecom law came into force. The new law was stuck in parliament, possibly due to concerns raised by advocacy group Human Rights Watch that some components of the draft bill violate freedom of expression.

Reuters reported that according to a confidential invitation to participate in the tender it had obtained, consortia winning an operating license may have been required to restrict or intercept communications, or let the government use their telecom equipment for undefined purposes in the event of an emergency. After the news of PRISM activities this hardly seems abnormal.

It also didn’t take long for radical Buddhists to spark religious hatred against Qatar’s Ooredoo which hails from a Muslim country. Many outsiders may not realise that there is a strong anti-Muslim sentiment among the Myanmar population, of which about 90 per cent are Buddhist. There are unconfirmed reports that over the last year, Buddhist lynch mobs have killed more than 200 Muslims and forced more than 150,000 people, mostly Rohingya Muslims, from their homes. Calls to boycott Muslin businesses by the extreme 969 Movement will also not bode well for Ooredoo.

Perhaps that is why, even before the dust had settled, rumours emerged that some of the unsuccessful bidders were told to keep hope as they may be called in if one of the two winners faltered or decided not to proceed. Myanmar representatives also visited some of them to explain why they had not been successful. Unusual behaviour? Well, maybe not for a country that is relying heavily on overseas investment and not wanting to upset some ‘friendly’ partners and potential investors in other projects.

One of the more bizarre, yet brilliant rumours to reach my desk was that the Government was reviewing the possibility of insisting on the rollout of one single mobile network that all licences could share. A sensible idea, but private funding of a national mobile network would be a first and begs the question: “what would remain as the differentiator between all of them.”

Of course, the cost of rolling out a single network could be shared and management could be handled by a joint venture, leaving each licensee looking more like an MVNO. They would then be able to concentrate on marketing unique products and services to a population hungry for them.

Regardless, like some other Asian markets allocating licences and spectrum, (India and Thailand for starters) there is no certainty that what is agreed to at the outset will come to fruition and we may see many changes and hear many more rumours before something constructive emerges.