Figuring out what happened in the award of Myanmar licenses

Posted on July 21, 2013  /  0 Comments

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.

Right after TOTSC named the two winning bidders, the international media noted that TOTSC has chosen an investor with powerful financial capability – Ooredoo – and an investor good at technology – Telenor.

Jeremy Sell, Ooredoo’s Global Strategic Director, has stated that the group would pour $15 billion within 15 years in Myanmar, which includes the initial capital, operation costs, expenses for licensing and tax payment.

Vietnamese experts believe that Viettel failed in the race in the Myanmar telecom market not because of the technical issues. Technologically, they said, Viettel is in no way inferior to the other big guys in the world.

As such, the answer could be related to the financial capability. Both Telenor and Ooredoo have not declared the values of the bidding packages. However, according to Reuters, the value could be over $3 billion.

Tong Viet Trung, Deputy General Director of Viettel, said Viettel did everything it could in the affair, from preparing documents to offering attractive commitments to the Myanmar government. However, the winning bidders offered very high prices, therefore, even if Viettel had offered higher by $100 or $200 million, it would not have obtained the contract.

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