Burma‘s government committee in charge of bids has said it has awarded lucrative mobile telecom licenses to Norway’s Telenor and the Qatari firm Ooredoo.
The move opens up one of the world’s last untapped mobile phone markets. It is estimated that just 9% of Burma’s 60 million people have mobile phones.
Eleven foreign companies were short-listed in their bid to supply telecommunications infrastructure in the country. The winners overcame fierce competition from the likes of Singtel and Bharti Airtel, as well as a bid by the Digicel group involving one of Burma’s richest men, Serge Pun, and the billionaire financier George Soros.
The successful firms will have to provide voice services across 75% of the country within five years and data services across half of it. At the moment, few people in Burma, also known as Myanmar, can afford mobile phone handsets and call charges.
Sigve Brekke, head of Telenor Asia, said they are looking forward to working with the government and people of Myanmar in developing the country’s telecommunication industry, a sector that will play a key role in Myanmar’s socioeconomic development.
Neither Telenor nor Ooredoo released figures on the value of their bids or how much money they will plough into establishing a mobile network across the country. However, one bidder said it would cost more than £2bn to build an extensive mobile network in Burma, while Digicel said it was prepared to invest £6bn if it won.
The government said it would finalize the 15-year licenses by September and operators would need to launch services within nine months. The selection committee said France’s Telecom-Orange and Marubeni Corporation of Japan will be back-up options if either of the two successful firms fail to meet the selection criteria.
The process of opening up the mobile telecom sector is conditional on a telecommunications law that has yet to pass through Burma’s parliament.
Analysts said the license-granting process was an indication of the progress of Burma’s economic reform program. The country lags behind its neighbors in mobile coverage and wants to provide affordable services to help spur economic development.