Myanmar Telecom: Telenor And Ooredoo Will Need To Overcome Land Disputes, Electricity Shortage And Other Hurdles

 @SophieXSong
on April 07 2014 2:18 PM
RTX11D88
Ross Cormack (R), CEO of Ooredoo Myanmar, talks next to Nicholas Swierzy, group director of Ooredoo Myanmar, as they address their news conference in Yangon July 5, 2013. REUTERS/Soe Zeya Tun

After finally being awarded telecom licenses, Myanmar’s foreign investors Telenor and Ooredoo are racing ahead to implement mobile services with the Burmese government’s help. But speed bumps still exist when it comes land acquisition and the reputation of the two.

“Both companies survived a last-ditch effort by parliament to railroad both companies into contracts with domestic firms,” Christian Lewis, an Asia researcher with the Eurasia Group, an economic and political risk consultancy, told International Business Times. Lewis added that the hurdle was largely due to the parliament being overworked and disorganized rather than any political will.

“The executive branch remains firmly behind both companies,” Lewis said.

Norwegian Telenor and Qatari Ooredoo beat out 89 other foreign competitors to receive the coveted telecom licenses last June, but they were not officially granted the 15-year licenses until January

Providing mobile access to its citizens would be a major step for the Southeast Asian nation, which was taken over by the current civilian administration in 2011. Since then, the country  sought to become a member of the international community following decades of rule by the military dictatorship that left it economically isolated.

The previous junta restricted mobile access to an elite group in power and experts estimate that only 5 percent of Myanmar’s population of 60 million currently has mobile access, while as little as 1 percent may have access to Internet. In addition to connecting the Burmese with the rest of the world, Telenor and Ooredoo will have access to a nearly entirely untapped market of 60 million.

But there may be a few more hurdles for the two companies before they can fulfill their promises to launch mobile services within the year.

“Practically speaking, the biggest risks are land acquisition for substations and towers,” Lewis said. “And reputation, which relates to the first risk but also includes human rights violations based on data privacy once their networks are up and running.”

Another potential problem is that only 30 percent of the country’s population has access to electricity, and the grid remains small and unstable. That too may hamper the telecom companies’ progress to build towers and stations necessary to roll out their services.

In addition, the state-owned telecom firms, Yatanapon Telecommunication and Myanmar Post and Telecommunication, will operate alongside Telenor and Ooredoo. The two firms kept telecom services very expensive in junta-ruled year, and may prove tough competition.

"Myanmar people have suffered a sense of injustice from the government's telecommunication services for decades," said Than Oo, a retired official at the Communications Ministry, according to the Bangkok Post. "I think these foreign firms may face some troubles in the future with our by-laws, that will benefit the existing firms.”

Share this article