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Myanmar: How to go from 91 EOIs to 2 licenses?

The government of Myanmar has received 91 expressions of interest for telecom licenses. We were not surprised when the number hit 18, but 91?

Now the question, according to Bloomberg, is how to narrow down the field in the next two stages, down to two:

Rules for the second stage, where bidders eligible for the third and final stage will be determined, will be provided “in coming weeks,” according to last week’s statement.

“Having prior emerging market experience should be beneficial, along with the ability to deploy capital, relationships with the equipment vendors or handset procurement,” Gupta said. “Reforms in the telephony sector are critical for overall development and progress, so they will need to be mindful of security and social issues too.”

Parliament may approve a draft telecommunications law in the first half of this year, which will include the creation of an independent regulator by 2015, the government said last month.

The winners will be “those that have the financial muscle to stay in the game for the long-haul,” said Jonathan Koh, an analyst at UOB Kay Hian in Singapore. Southeast Asian bidders that are backed by telecommunications companies “may have a better chance,” he said.

I have a simple suggestion to the gentlemen in Nya Pyi Taw who must agonizing over the process. This is going to be brutal. Try another path. Go talk to your spectrum guys and see how much spectrum can be released. Then figure out the maximum number of access-network licenses (independent of technology) can be issued. Set some minimal criteria re experience in low-income countries and access to capital to identify qualified bidders. Then let them bid in a transparent auction. If there are too many licenses for the market, let them exit by selling their spectrum and other investments to any licensee. That way you will get the right number and the right kinds of players.

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