Myanmar on Thursday awarded licenses to Norway’s Telenor and Qatar’s Ooredoo to set up the country's first foreign mobile phone networks, saying they were picked among a shortlist of nearly a dozen companies based on their cost and coverage advantages.
The two companies will build and operate a nationwide wireless network for 15 years in one of the world’s most underdeveloped telecom market as Myanmar has long been cut off from the rest of the world by international sanctions and strict censorship under the former junta regime.
The government’s Telecommunications Operator Tender Evaluation and Selection Committee said the selection decision was based on cost and coverage to be provided in Myanmar, where less than 6 million people out of a population of 60 million have mobile phones.
“We brought the two winning companies to Myanmar and asked them to make their presentations,” TOTSC head Set Aung told RFA’s Myanmar Service. “They committed to a price they are going to charge and to their coverage plans.”
He said there were strict provisions for them to live up to their pledges and "if they don’t adhere to their commitments, they will lose their business."
France's Telecom-Orange and Marubeni Corporation of Japan will be back-up options if either of the two winning firms fails to meet the selection criteria.
Telecoms law in the works
The decision to award the licenses was met with calls from U.S.-based Human Rights Watch to the two firms to say how they plan to protect users from illegal surveillance and censorship, given the current lack of legal human rights protections in Myanmar’s telecom sector.
The coveted licenses were awarded despite a last-minute push by lawmakers to delay the licenses until the passage of a new telecommunications law, which is currently being drafted and which rights groups hope will include stronger protections against abuses.
The licenses are conditional on the new law, expected to be passed in July.
Myanmar’s parliament voted Wednesday to delay the decision until its is passed, but the government overruled the objections.
TOTSC chose Telenor and Ooredoo—formerly known as Qatar Telecom—out of a short list of 11 companies selected from among more than 90 initial bids.
Hopes for lower costs
Myanmar is eager to provide mobile phone coverage to around 80 percent of the population by 2016.
Currently, mobile phone costs are astronomical compared to those in neighboring countries, and data-enabled smartphones are prohibitively expensive for most.
Until a few years ago, the cost of a SIM card could reach U.S. $2,000, and the country still has low Internet penetration and slow connections.
“We hope these winning companies will provide us with good Internet service and lower the cost of using phones,” one Yangon resident told RFA.
“We were surprised when we heard the names of the winning companies because these names are not well known and are unfamiliar to us,” he added.
Among the firms which did not succeed in their bids were Bharti Airtel of India, SingTel of Singapore, KDDI of Japan, and Viettel of Vietnam, as well as the Digicel group involving one of Myanmar's richest men, Serge Pun, and billionaire financier George Soros.
Neither Telenor nor Ooredoo immediately released figures on the value of the bid or how much money they will put into establishing a mobile network across Myanmar.
Warning against abuses
U.S.-based Human Rights Watch urged the new telecom license winners to make a public commitment to strong human rights policies and broad transparency measures.
“Burma’s long record of rights abuses should give pause to the two license winners about government censorship, illegal surveillance, and even network shutdowns,” the group’s senior Internet researcher Cynthia Wong said, using another name for Myanmar.
“The firms should put strong safeguards in place for their users, make clear that they will be transparent about government demands, and press the government to enact legal protections for rights.”
She said Myanmar’s investors and donors would be closely watching the activities of the two companies, whose ventures will “set the stage” as to whether foreign investment can play an important role improving the country’s human rights situation.
An earlier version of the draft telecommunications law reviewed by Human Rights Watch in March raised concerns about inadequate protections against rights abuses, the group said.
Telenor and Ooredoo’s licenses open up to foreign companies a market previously monopolized by state firms.
The country’s telecommunications infrastructure was wholly government-run under the junta which gave up power in March 2011.
In January, Myanmar’s Minister of Posts and Telecommunications Thein Tun was placed under house arrest and investigated over possible links to high-level corruption linked to the proposed nationwide telecommunications network.
Reported by RFA’s Myanmar Service. Translated by Khet Mar. Written in English by Rachel Vandenbrink.