All the headaches facing the two lucky winners of Myanmar’s mobile licenses

Rickety infrastructure and ethnic tension—just what a telco loves.
Rickety infrastructure and ethnic tension—just what a telco loves.
Image: Reuters/Soe Zeya Tun
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Myanmar today announced the two firms that will operate the country’s first widespread mobile-phone networks, bringing to an end the mad and at times undignified scramble to win what one telecoms exec called “the last major untapped telecom market in the world.”

The winners, Norway’s Telenor and Qatar’s Ooredoo, have the goal of taking the country of some 55 million people from just 9% to 80% mobile penetration in a mere 36 months. They beat out nearly 100 international telcos, some of which had wooed the government lavishly. Ireland’s Digicel already had more than 1,000 employees inside the country and had agreed to sponsor the national soccer league for the next few years. Singapore’s Singtel said it would help launch the country’s first national satellite if selected. Other groups teamed with locals who had been internationally blacklisted until just a few months ago, when the EU lifted sanctions.

But while the prize is large, if the bidding process was any indication, the headaches will be considerable too.

Just yesterday, the parliament voted to delay awarding the licenses because the laws governing their operations are not yet written. The ministry for telecommunications went ahead and announced them anyway. Earlier this month China Mobile and Vodafone, the biggest and second-biggest mobile companies in the world respectively, withdrew their joint bid. They said the prospect didn’t meet “internal investment criteria,” but some saw their withdrawal as part of strained relations between China and Myanmar (paywall).

Much of the selection process followed a similar pattern of unpredictability, as if the Burmese leadership’s shifting vision for the future of the country was being played out in the choosing of an operator. A year ago, Myanmar only speculated that foreigners could be operators. For most of last fall, nobody knew how many licenses there would be or  whether a local partner would be needed. When the country’s leading telecom provider, MPT, moved to privatize, doubts arose about who the selected international carriers would need to partner with. In the end, several of the carriers added local partners to their bids at the last minute—which turned out not to matter, since neither of the two winners had one.

The rebuke to Digicel, which had been courting the government for several years, has struck a poignant chord in the country. Myanmar Memes, a popular Facebook group for tech geeks in Myanmar, is filled with cartoons and pictures like this one about the pain of losing the bid (“RIP Digicel” says the Burmese text). The small Irish firm was seen as a plucky upstart and an antidote to Myanmar’s reputation for corruption; Bill Clinton pointed to its work in Haiti as one of his top reasons to be optimistic about the developing world.

The selection of Ooredoo, meanwhile, is already raising questions about symbolism. The New York Times asked  “how it will operate in a country that has a growing anti-Muslim movement that is openly calling for a boycott of all companies and products owned or made by Muslims.” Myanmar recently banned a Time magazine cover purporting to show the “face of Buddhist terror,” a monk accused of fueling violence against Muslims inside the country.

These tensions, as well as the nearly non-existent infrastructure in Myanmar, will make Telenor’s and Ooredoo’s task quite the challenge. But foreign contractors in Myanmar are already used to that. “A year ago, I arrived with my suitcase and $25,000 in cash,” said Ericsson’s Myanmar managing director Johan Adler, who has 20 years experience in Asia, and may work with the selected carriers to build the networks. “I started by calling the ministry of telecoms.” It wasn’t expecting his call.

Sam Petulla is a freelance journalist who lives in New York City.