Business

Digicel loses out to Norwegian, Quatari telecoms in Myanmar bid

Friday, June 28, 2013    

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A consortium led by Digicel Group has failed in its bid to secure one of two telecommunication licences on offer in Myanmar, Southeast Asia.

The group lost out to Norway's Telenor Group and Ooredoo of Qatar, formerly known as Qatar Telecom.

Digicel in a statement yesterday said it was dissapointed to have not been selected, but said it would look at other opportunities in Myanmar and other territorities as it seeks to expand its international footprint.

"Digicel remains committed to exploring commercial opportunities in Myanmar and will be evaluating these on an ongoing basis," the company said.

"In the meantime, Digicel's focus will be on growing market share and revenues in its existing markets whilst continuing to look for other expansion paths, including new markets like the Bahamas."

Denis O'Brien, Chairman and founder of Digicel Group, speaking on behalf of the consortium -- YSH Finance Limited (a joint venture between First Myanmar Investment Co and Yoma Strategic Holdings Ltd 'FMI/Yoma'), Quantum Strategic Partners Ltd and Digicel Group Limited -- thanked the Union Government of Myanmar for the opportunity to be involved in the bidding process.

He also congratulated the successful applicants and wished them well as they prepare to enter the Myanmar market.

Telenor and Ooredoo will set up the country's first foreign-owned mobile phone networks.

Telenor is one of the world's major mobile operators with 148 million mobile subscriptions. It has mobile operations in 11 countries across Europe and Asia, according to the company's website. Total revenues in 2012 were NOK 101.7 billion or US$16.8 billion.

Ooredoo reportedly haa a customer base of 93 million and revenues of US$9.3 billion in 2012. It has businesses across markets in the Middle East, North Africa and Southeast Asia, according to the company's website.

Currently less than six million of the country's 60 million people have mobile phones, one of the lowest connectivity rates in the world. Hoping to spur economic growth, the government is trying to push penetration rates to 80 per cent by 2016.

The licences were awarded despite an eleventh hour push by lawmakers to delay a decision until a new telecommunications law is passed.

Of the more than 90 companies that submitted bids, 11 were shortlisted.

Myanmar, located in the heart of one of the fastest growing regions in the world, became one of the most isolated and poorest nations during its half-century of iron-clad military rule.

After taking control of a quasi-civilian government in 2011, former general Thein Sein started implementing promised political and economic reforms.

The communications industry, long-neglected by the country's military rulers, is in need of a complete overhaul. That's in part because the original network was intended for only a tiny number of subscribers, mostly the rich. Up until a few years ago, the cost of SIM cards could reach US$2,000.

Digicel announced in February that it had officially submitted its expression of interest in acquiring a licence to operate a telecommunication network in Myanmar. O'Brien had already said he was prepared to invest up to US$1 billion into developing the system.

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