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Myanmar incumbent looking for a partner

It appears that ability to invest was a critical factor in the selection of Ooredoo and Telenor as the first foreign private licensees in the Myanmar telecom sector. Both have committed to low-price mobile services. Telenor has considerable experience in running profitable operations using the Budget Telecom Network business model. Ooredoo can, I suppose, buy that expertise. If they do not succeed in running a BTN model in Myanmar, it will be their money that will go down the drain.

The nature of the competition as well as the reality of purchasing power in Myanmar must be taken into account when finding the right partner for MPT. France Telecom’s international experience lies in Africa, a region that is only now adopting the BTN model, but even now France Telecom is not the most enthusiastic proponent. If they are brought in to provide expertise to MPT, I am not sure MPT can effectively compete with Ooredoo and Telenor. If they are brought in, it is important that they come in as investors and not be compensated in the form of management fees. They should share the risks and the rewards. Management fees are a bad solution because then the risks are with MPT and the rewards will go to France Telecom.

MPT managing director U Aung Maw said it will become a corporation separate from the ministry and is in discussion to find a foreign partner to assist with its expansion.

“We are now in the preparation process discussing a joint venture agreement with a foreign giant,” he told the Myanmar Times on the sidelines of the Myanmar Connect 2013 conference in Nay Pyi Taw.

U Aung Maw did not confirm France Telecom by name, but said MPT held discussions with firms from France, Singapore, Japan, and other western countries.

Telenor and Ooredoo were selected as the two winners from 92 competitors to receive a mobile license during a bidding process earlier this year, with a consortium of France Telecom and Sumitomo finishing third. Domestic entities MPT and Yatanarpon Teleport Co (YTP) also posses mobile licenses, while MPT has the sole existing mobile infrastructure and customer base in Myanmar.

France Telecom senior vice president Dominique Espinasse told The Myanmar Times Orange has had contact with the government over a partnership in MPT.

“MPT is a key asset for [Myanmar]. So we think it’s very important for the government to focus on the role of MPT,” he said.

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