License


I wrote earlier about the importance of timing when companies enter new markets. One hopes that this timetable will be adhered to in this fast maturing market. U Zaw Min Oo, a director of Myanmar Technologies and Investment Corporation – one of the 11 local firms – told The Myanmar Times this week that he expects the telco to receive its licence on December 21. “The ministry is arranging to provide the telecom license on that day in Nay Pyi Taw,” he said, adding that he could not share any further details of the new firm. U Zaw Min Oo said in October that senior management positions have been filled, with a Viettel official taking the chief executive position.
It will be a hard road for the fourth licensee, now that MPT, Telenor and Ooredoo have got a running start. The challenges of managing a large consortium will also be considerable. The newest tender winner will join an 11-company consortium comprising Myanmar Technologies and Investment Corporation, Myanmar ICT Development Corporation, Myanmar Agribusiness Public Corporation, Shwe Pyi Tagon Telecommunication Public Company, Golden Land East Asia Development, Myanmar Edible Oil Industrial Public Corporation, Myanmar Industries Alliance Public, Myanmar Agriculture and General Development Public, International Power Generation Public Company, Royal Yatanarpon Telecom Public Company and Mahar Yoma Public Company, the EOI document said. U Shane Thu Aung, director at Royal Yatanarpon Telecom (YTP), said the local consortium will be called Myanmar National Telecom Holding Public. The fourth licence will have an initial duration of 15 years, and will be renewable for at least 10 additional years, subject to compliance – the same terms as were granted to Telenor and Ooredoo Report.
The above is what I have been able to piece together from multiple news reports out of Myanmar. I have not been able to locate the texts of the revised by-law (we have only the draft we commented on) and license (hopefully what the four operators will get is the same). “Rules have been adopted on equal terms. We can now grant a licence because the telecommunications law has been approved. When the by-law comes out, we will issue licences for other services such as internet.
It appears that the finalization of the rules that we commented on is the cause of the delay in issuing licenses to Telenor and Ooredoo. This is not really a bad thing. It is always better to have the rules embodied in generally applicable law and rules than in individual licenses (which would have been the alternative approach). “We are working on finalising five applicable rules for the Telecom Law by the end of January. We have already negotiated with foreign telecom operators about applying detailed rules and regulations of the law so they are able to start their businesses,” he said, adding that the five provisions have already been sent to the Attorney-General’s Office.
There is a possible explanation for the confusion around whether the Myanmar operating licenses have been issued or not. It appears that the license reported on by Reuters was a permit relevant to the investment, not the license which is the critical document in telecom policy and regulatory terms. This is still to be issued, since the rules have yet to be finalized. Telenor and Ooredoo were selected as winners of a government bid for two private telecoms licenses in June 2013. They expected to receive their licences by last December, but the government has yet to pass a vital telecommunications by-law which will outline the rules and regulations by which the companies must operate.
An unconfirmed Reuters report indicates that the Myanmar government may have met its end of year deadline for issuing licenses to Telenor and Ooredoo. A senior Myanmar Investment Commission (MIC) official said that operation licenses had been granted last week to Telenor and Ooredoo, the two international telecom giants selected through bidding mid last year, the Voice Daily reports. The two operators had earlier announced plans to invest about $15 billion and $ 2 billion respectively in the 15-year projects, it added.
The timeline below depends on the regulations (by-laws) being approved. The news story suggest they have been. We know that they are open for comments. We plan to give comments by the Dec 2 deadline. So unless the licenses are being developed in parallel, the chances of issuance by year end are not that good.
Now that the licensing is done, it’s time for post mortems on the failed bids. Here is one on Viettel’s failed bid: In 2012, Telenor reported the total turnover of $16.5 billion and the net profit of $1.4 billion. The group has committed to develop the mobile network in the market the next year with the nationwide coverage within five years.
Xenophobes are not very bright. What Myanmar needs to achieve its target of connecting its people very quickly is massive investment. Myanmar Buddhist capital could not connect even five percent of the population in all these years. Now the government has decided to allow foreign capital to do the job. What color is money?
Vodafone and China Mobile were an odd couple. Now the story has become curiouser. Lack of regulatory certainty has caused them to withdraw from Myanmar. Vodafone said it had withdrawn after seeing the final licence conditions, which were published on 20 May, because “the opportunity does not meet the strict internal investment criteria to which both Vodafone and China Mobile adhere”. A spokeswoman for Vodafone added that among the British company’s concerns were that a promised telecommunications bill overhauling regulation of the sector is now not due to be enacted before Burma finalises its choice of foreign mobile operator on 27 June.
Twelve is still a big number, especially when one includes the consortia members. Of the usual suspects, only NTT, Hutch, Etisalat, and Orascom are missing. Of all the cash-rich Gulf and Middle East players, only Qatar is still in the fray. Philippines’ PLDT is out, but that is really not news. Millicom is a bit of a surprise, as is Digicel, a specialist in small markets (which Myanmar is not).
Who would have thought? A UK-based global operator that emerged in the competitive era joining with China Mobile, the big dog in China, to bid for a Myanmar license. Operator heavyweights China Mobile and Vodafone Group have formed a consortium to bid for a mobile licence in Myanmar. Keen to promote competition, Myanmar wants to increase the number of mobile operators from two (Myanmar Post & Telecommunications and Yantanarpon Teleport) to four. In a statement, Vodafone laid out some of the attractions of entering this market.
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.
I am all for the issuance of new licenses in Nepal, a country with a population of 30 million and fewer mobile operators (officially) than its South Asian peers. But the justification is novel. Seems to solution the described problem afflicting Nepal Telecom is some kind of program to reform it, including, but not limited to, privatization. But anyway, good that something is being done. Of course, there is many a slip between cup and lip.
We predicted the spread the BTN model from Asia to Africa. We saw the duopoly structure in Latin America preventing its spread to that continent. We really didn’t say much about Europe, except in passing. But it looks like the issuance of a fourth license in France (we did not even know France had only three operators! How backward!

Quo warranto, TRC?

Posted by on February 14, 2010  /  8 Comments

Following the appointment of Director of Information (or Propaganda) as part-time Director General of Telecom, I have been getting a lot of calls asking about Internet censorship, prohibition of Face Book, and licensing of news websites. While I do believe that (a) the Director of Information is on the face unqualified to serve as DGT, and that (b) the Department of Information has no role to play in a modern democratic society, I do not think that any of these feared things will happen. Whatever the DGT does, he has to do under the Law, the Sri Lanka Telecom Act, 25 of 1991, as amended. According to the Act, the DGT does not have legal authority; all authority lies with the Commission, a five-person body chaired by the Secretary of the relevant Ministry, at the present time Mr Lalith Weeratunge, Secretary to the President. The DGT is a member ex officio and until now, the only full-time member.