Myanmar awards landmark telco licenses to Telenor, Ooredoo

Summary:In a hotly contested tender for the first licenses available for foreign carriers, the two telcos pipped 9 other groups including carriers such as SingTel, Bharti Airtel, KDDI and Digicel.

Myanmar has awarded its first telco licenses available to foreign operators to Qatar's Ooredoo and Norway's Telenor. The two carriers beat nine other consortia in the last stretch of a 6-month long race for access to one of the world's last telecoms frontiers.

The winners had the highest scores in an assessment by an independent selection committee, which allocated points based on technical and financial factors, according to Myanmar's Ministry of Communications and Information Technology in a statement on Thursday.

The announcement was made despite a vote by parliament on Wednesday to delay the award until the formalities of a new telecommunications law was enacted, noted a Reuters report. However, the ministry said parliament had no authority to delay the process. The two winners had made their bid without partnering a local company, which could be made a requirement later.

One of the successful applicants, Ooredoo, has admitted Myanmar had both geopolitical and regulatory risk.

"It's a very young democracy and the organs of state are in their infancy and don't have much experience, but we were very pleased the process was so intelligently planned and executed and with transparency. So if they continue as they have started we would be very happy," Jeremy Sell, Ooredoo's chief strategy officer, told Reuters.

Ooredoo will spend US$15 billion over the 15-year licence period, including operational and capital expenditure, licence fees and taxes, he added.

Sell pointed out Myanmar's relative lack of mobile communications infrastructure was an advantage as there would be not legacy networks to upgrade, so the company could focus on creating a purpose-built data network with voice capabilities.

The ministry also picked a backup candidate, France's Orange in partnership with Japan's Marubeni Corp, in case any of the successful bidders failed to meet post-selection requirements.

myanmar

Tender losers

  1. Airtel Consortium
  2. Axiata Group
  3. Digicel
  4. France Telecom-Orange + Marubeni
  5. KDDI + Sumitomo  + Myanmar Information and Communication Technology Development Corporation (MICTDC) + A1 Construction
  6. Millicom International Cellular S.A.
  7. MTN Consortium (MTN Dubai + M1 Telecom + Amara Communications)
  8. SingTel + KBZ + Myanmar Telephone (M-Tel)
  9. Viettel Group

Hotly contested tender

The winners were picked from a shortlist of 12 bidders, which saw the Vodafone-China Mobile consortia withdraw earlier this month. Out of the remaining 11 applicants, one was disqualified because its proposal fell short of coverage requirements, said the ministry.

They were prequalified from a group of 91 telcos and consortia who submitted their expression of interest in February.

As part of the final assessment, the 10 remaining applicants were allocated points, up to 1,000 in total, based on eight categories:

  • Network rollout, infrastructure and coverage commitment
  • Robustness of technical plan
  • Quality of marketing plan, value added services and distribution commitment
  • Tariff commitment for mobile voice services, for mobile data services and for handsets
  • Human resources management, organization and capabilities, including commitment recruit and develop local talent
  • Quality of customer care and billing plan
  • Corporate Social Responsibility, including impact on ICT sector
  • Soundness of business plan and financing strategy

Another 500 points was awarded to the bidder with the highest spectrum fee offer, with the remaining applicants receiving a proportionate number of points based on their offers. The two with the highest combined scores were picked as winners.

Amid the process, the various applicants had been busy drumming up buzz over their proposed commitments in Myanmar.

The  bidding  had attracted wide interest following the country's  move to open up to foreign firms . Myanmar is seen as one of the  last untapped telecom growth markets , with a 60 million population and mobile penetration of just 5 to 10 percent.

Topics: Telcos, Networking, SingTel

About

Loves caption contests, leisurely strolls along supermarket aisles and watching How It's Made. Ryan has covered finance, politics, tech and sports for TV, radio and print. He is also co-author of best seller "Profit from the Panic". Ryan is an editor at ZDNet's Asia/Singapore office.

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