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Airtel bidding for Myanmar telecom license

The Indian telco giant is reportedly joining four other foreign companies--SingTel, Axiata, Telenor, and ST Telemedia--to bid for the two licenses offered by the Myanmar government.
Written by Jamie Yap, Contributor

Indian telco giant Bharti Airtel has put in a bid for a license in Myanmar to expand its presence in Asia, where it already has operations in Bangladesh and Sri Lanka.

Airtel is the latest foreign operator hoping to score fresh permits that will give it access to untapped potential, as Myanmar seeks to expand its communications networks following decades of military rule, The Hindu Business Line reported Monday.

Airtel joins at least four other companies in the running. According to a Bloomberg report last Friday, Singapore Telecommunications (SingTel), the biggest telco in Southeast Asia; Singapore's ST Telemedia, a unit of Temasek Holdings; Axiata, Malaysia's largest cellular operator by market value; and Norway's Telenor have already submitted expressions of interest. SingTel also owns a 30 percent stake in Airtel.

Myanmar earlier this month invited foreign operators to submit bids by January 25, offering two licenses to expand telecom coverage to as much as 80 percent of the country by 2016. These licenses will be issued by June and may last for as long as 20 years with a renewal option.

The Hindu Business Line report said Myanmar was a logical move for Airtel given the geographical coverage the company has in Asia. Its bid may also bring cheer to the Indian government agencies concerned over the growing clout of Chinese carriers in the region.

That no foreign operator has been allowed into Myanmar before would be a challenge for the Indian telco as well as other bidders. However, Airtel could replicate the low-cost business model it has used in India over the past 15 years, the report pointed out.

Foreign telcos are attracted to the untapped, high-growth potential of Myanmar's burgeoning telecommunications market. According to Bloomberg, the Myanmar government said the country has 5.44 million mobile-phone subscribers as of December 2012, a 9 percent penetration rate as compared to 70 percent in Cambodia, 87 percent in Laos, and more than 100 percent in Thailand. The country has a fixed-line penetration rate of about 1 percent, it added.

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