Ooredoo and Telenor facing challenges in Myanmar

Posted on October 5, 2013  /  0 Comments

The honeymoon is over and the clock is now ticking in Myanmar’s business hours. In June, the authorities have selected Qatar’s Ooredoo and Norway’s Telenor to run mobile services initially for 15 years. Neither has received the license as yet but both have kept the fingers crossed to get the paper within this year. The government is still processing a new telecom law, which will guide the licenses. Myanmar’s parliament has passed the law in August but the President has returned it to the lawmakers with suggested amendments.

Telenor’s CEO-designate Petter Furberg believes the delay was “nothing worrisome”, but his company is keen to see the final draft in order to know the precise terms under which it will be working. He told the Irrawaddy:

“This is a natural process for any country where you have a law that is proposed from the government and then is being debated in the Parliament, and that might take a little bit of time. I think [that] is fair.”

As soon as Telenor receives its license, Furberg said, the company will begin working toward its commitment of making both second- and third-generation phone and Internet services available to 80 percent of the country within five years.

“It’s a challenge. It’s not an easy country to operate in. It’s not an easy country to build infrastructure in, so we’re very humbled by the task,” he said. “From the customers’ perspective, what they will get is both 2G and 3G coverage, more or less nationwide, and they will be able to use all the types of services that you can use in other parts of the world.”

Myanmar’s mobile penetration is merely about 10% of an estimated 60 million people, and just 1% has access to the Internet. Currently only the state-owned Myanmar Posts and Telecommunications (MPT) and Yatanarpon Teleport have telecom licenses. A highly controlled supply of SIM cards has been the incentive to a black market where prices of more than US$200 for a SIM are common.

Once Ooredoo and Telenor get their license, deploying the network will be a huge challenge. According to Reuters, Jeremy Sell, the chief strategy officer at Ooredoo, said that his company and Telenor were actively discussing the sharing of infrastructure.

“It’s a green-field launch and we’re going to build the network in partnership with Telenor,” Jeremy Sell, Ooredoo’s chief strategy officer, told a conference in Dubai on Wednesday. “This has never been done before – we’re rolling out two green-field networks and anything made of steel or concrete we want to share. There are no towers that are so strategic you can’t share them.”

“No one speaks English, we can’t get galvanized steel,” said Sell. “There aren’t enough cranes. The country is covered in jungle. The roads flood. There’s no power. It’s a bit like Thailand was 30 years ago – it’s a pristine and beautiful but undeveloped country. Us and Telenor and other investors in the country, we don’t want to put a huge amount of money in straight away,” said Sell. “We’ve still got to be a bit cautious and see how it goes.”

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