Business

Digicel consortium gets back in Myanmar through cell tower deal

Wednesday, December 04, 2013    

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HAVING lost out to Ooredoo Myanmar for a telecommunications licence in former Burma, Digicel's consortium has landed a deal to build and lease the cell towers to the Southeast Asian company.

Digicel Group, which along with YSH Finance and First Myanmar Investment announced the agreement and the reorganisation of its consortium on Monday, said that its Myanmar Tower Company will be among the first to begin construction there.

The towers, which are going to be operated for multi-tenancy, will have to be deployed rapidly to meet an ambitious timeline set by the government to increase overall teledensity to as high as 80 per cent by 2016.

Up to the end of 2012, the 5.4 million mobile phone subscribers and the 600,000 fixed-line users placed teledensity at less than 10 per cent of the population.

Myanmar's telecom-munications sector reforms aim to "increase by tenfold access to quality telecommunication services; make services affordable for its citizens; and develop the required Information and Com-munication Technologies (ICT) infrastructure in the Republic of the Union of Myanmar that will facilitate inclusive growth and poverty reduction", said a government tender document.

Digicel has had substantial success in driving mobile penetration in previously underserved markets.

Most notably, it didn't take much time for Digicel to increase mobile penetration to 50 per cent in Haiti where it was just five per cent prior to the company's 2006 launch.

Indeed, much like Haiti, Myanmar has low penetration against the background of limited infrastructure and low income.

Both countries' GDP per capita are below US$1,000, and almost half of the mobile subscribers in Myanmar are currently located in the country's two largest urban centres Yangon (with 1.8 million subscribers, or 25 per cent of the city's popluation) and Mandalay (860,000, or 12 per cent penetration).

On the other hand, Myanmar is more than 20 times the size of Haiti in terms of land area, and has more than six times the population size.

Estimates of the project cost was not disclosed on Monday, but the Digicel-led consortium promised to invest close to US$9 billion in Myanmar in its bid to get one of two telecommunications licences there, before losing to Norway's Telenor Group and Ooredoo of Qatar, formerly known as Qatar Telecom.

The pledge, which accompanied its official bid, was twice the amount it spent over the last 12 years building out its operations in the 31 markets in which it currently operates.

The Irish telecommunications firm's owner, Denis O'Brien, said that the planned capital expenditure included the roll-out of a 4G network, which would provide coverage to 52 per cent of the population by year-end and 96 per cent by 2016.

It also included the installation of 7,000 kilometres of fibre-optic cable, the provision of 23,000 wi-fi hotspots, and 7,277 solar sites.

Digicel had been gunning for a licence in the South-East Asian country (formerly Burma) since 2009, and says it already has 893 persons employed in the country, while it's the title sponsor of the Myanmar Football Federation and the Myanmar Special Olympics Federation.

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