The mobile phone carrier contracts are seen as crucial for Myanmar's economy as a whole.
Myanmar announced the winners of a landmark telecommunications auction Thursday, pressing ahead with plans for badly needed investment despite opposition from some members of Parliament and confusion stemming from the lack of a national law for the industry. Telenor Mobile Communications of Norway and Ooredoo of Qatar won the 15-year concessions for mobile phone networks. France Télécom and Marubeni Communications of Japan were selected as backups if the winners failed to meet "post-selection requirements," a government statement said.
At a time of severe tension between the Buddhist majority in the country and the Muslim minority, the selection of a company from a Muslim country, Qatar, drew immediate criticism from a growing anti-Muslim movement that is openly calling for a boycott of all companies and products associated with Muslims. Buddhists posted angry comments on Facebook questioning why the government had selected a Muslim company. Ashin Wimala, a Buddhist monk and one of the leaders of the 969 movement, the nationalist Buddhist group advocating the boycott, called for a boycott of Ooredoo. "Did the government have such little choice?" he asked. "Why did they award this to a Muslim company?"
U Ye Htut, a government spokesman, said religion was not a factor in the selection. "We selected them for a license on the basis of their services - they have a good telecom service in Singapore," he said, referring to Ooredoo. After decades of oppressive military rule, during which the government deliberately kept mobile phones in short supply, the licenses are a potent symbol of Myanmar's opening to the world and the newfound freedoms for the country's 55 million people.
Preserve of the rich
Only 3 per cent of the population had a mobile phone in 2011, the last year for which data are available, a startlingly low number at a time when mobile phones are ubiquitous even in the poorest corners of the world. Three years ago, when Myanmar was still under military rule, a mobile phone SIM card cost the equivalent of about $2,500, making the phones a preserve of the rich. In neighbouring Laos, a country with similar levels of grinding poverty, mobile phone penetration is 87 per cent.
Although analysts in recent weeks said they had been generally impressed with the way the bidding process had been carried out, the hours before the announcement were cloaked in confusion. The lower house of Parliament, asserting itself in ways that are novel for a country still recovering from decades of rule by military fiat, voted on Wednesday to delay the awarding of licenses until a telecommunications bill was passed into law. The conditions of the license call for a swift rollout of both voice and data networks: Coverage must reach a quarter of the population within a year. Within five years, half of the population must have access to cellular data services, and three-quarters must be able to make voice calls.
The mobile phone carrier contracts are seen as crucial for Myanmar's economy as a whole because they will allow for things like banking or payment applications in an economy that is almost entirely based on cash. Smartphones will also potentially bring millions of consumers to the Internet. Security is an issue in border areas where there is still sporadic fighting between armed ethnic militias and the Myanmar army. Yet for the companies bidding for the contracts, the prize was too big to ignore. Myanmar is one of the world's last undeveloped markets, which explains the breadth of the interest in the competition to secure licenses.
The government of Myanmar received interest from about 90 companies for the two licenses and whittled those down to a dozen finalists in April. The bidders included groups led by major telecommunications providers and other investors from across the world, including Bharti Airtel of India, SingTel of Singapore, KDDI of Japan, Millicom of Ghana, MTN of South Africa and Viettel of Vietnam.
While there has been a lot of talk about the potential of Myanmar for growth, some people who have been doing business there have words of caution. Andreas Hipp, chief executive of Epsilon Telecommunications, a Singapore company that provides international connection services for one of the existing domestic telecommunications companies in Myanmar, Yatanarpon Teleport, said the legacy of state control and corruption would take a while to shake off. And unless the economy grows rapidly, few consumers will have the means to use the new networks.
"Everyone is talking about broadband, but a lot people can't afford $10 a month for basic line rental," he said. "It's certainly a country everyone has an eye on, but I'm not so sure it's going to open up so quickly."
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Source: http://www.news.myanmaronlinecentre.com/2013/07/04/myanmar-leaps-into-world-of-cellphones/
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