Myanmar calls EOI for fourth telecoms operator

The government has asked international telecoms operators to submit expressions of interest ahead of a tender for the country’s fourth operator licence, to be awarded in 2016.

Companies will apply to join a local consortium of 11 local firms and investors, and a state partner, according to an EOI document seen by The Myanmar Times.

The fourth operator will be majority locally owned. EOIs are expected no later than 5pm on December 18, the document said.

Consultant Roland Berger will help the tender selection committee to choose the foreign partner, after signing an agreement on December 9.

The German company managed the government’s last international telecoms tender, a hotly-contested race for two licences, which were granted to Norway’s Telenor and Qatar’s Ooredoo.

The country’s third operator is state-owned Myanma Posts and Telecommunications.

The newest tender winner will join an 11-company consortium comprising Myanmar Technologies and Investment Corporation, Myanmar ICT Development Corporation, Myanmar Agribusiness Public Corporation, Shwe Pyi Tagon Telecommunication Public Company, Golden Land East Asia Development, Myanmar Edible Oil Industrial Public Corporation, Myanmar Industries Alliance Public, Myanmar Agriculture and General Development Public, International Power Generation Public Company, Royal Yatanarpon Telecom Public Company and Mahar Yoma Public Company, the EOI document said.

U Shane Thu Aung, director at Royal Yatanarpon Telecom (YTP), said the local consortium will be called Myanmar National Telecom Holding Public.

The fourth licence will have an initial duration of 15 years, and will be renewable for at least 10 additional years, subject to compliance – the same terms as were granted to Telenor and Ooredoo.

The EOI document, issued by the Ministry of Communications and Information Technology (MCIT), does not specify how much capital the foreign partner will need to bring to the table.

It said, “The foreign telecom operator shall bring in the necessary expertise and financing to ensure successful rollout and commercial operations”.

“The hereby proposed structure of the fourth operator will allow a healthy mix of local know-how with international expertise and will hence create business potential for local companies.”

The licence will be granted next year, subject to approvals, once the joint venture has been formed, said U Chit Wai, secretary of the tender selection committee.

“We are working hard to award the licence as quickly as possible. Once the local consortium has found a partner, we will grant the licence during 2016,” he told The Myanmar Times.

Time is of the essence. Ooredoo, Telenor and MPT have racked up millions of subscribers, increasing mobile penetration from 10 percent in 2013 to over 60pc by September 2015, according to MCIT figures.

Telenor reported 11.8 million subscribers and Ooredoo counted 4.8 million customers in the companies’ third-quarter results. MPT has roughly 16 million users, its Japanese partner KDDI said last month.

Between 60-70pc of customers are using smartphones, the communications ministry said in its EOI documents, “a uniquely high uptake at this early stage of development compared to anywhere else in the world”.

To ensure it is competitive, the fourth operator should enter the market as quickly as possible, and offer a cheap service, said Daw Htike Htike Aung, project director at the Myanmar ICT for Development Organisation.

“Its priority should be to bring internet services to rural areas,” she told The Myanmar Times.

“Of course, mobile users like a high-quality, cheap service. If the fourth operator is able to provide this, it may be able to compete with the others.”

For U Shane Thu Aung, if the fourth operator can offer a value-added service, it will secure the attention of mobile users.

“Prices and promotions for voice calls are good at the moment, so the fourth operator will find it difficult to compete in this area,” he said. “However, if it offers additional services, it may be able to secure a good market share.”

For over a year, it was rumoured that YTP would receive the fourth licence in conjunction with a foreign partner.

The process was previously led by YTP, according to earlier comments by U Than Htun Aung, director of MCIT Posts and Telecommunications Department, but to ensure efficiency was put under the purview of a steering committee.

YTP in the past has held discussions with potential foreign partners including Vietnam’s Viettel Group, Thailand’s True Corporation Public Company and Malaysia’s Axiata Group, which has since agreed to buy a 75 percent stake in Digicel Group’s Myanmar Tower Company.

Source: Myanmar Times

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