The Irrawaddy Business Roundup (July 26, 2014)

By Simon Lewis 26 July 2014

Ooredoo SIM Cards to Go on Sale in Less Than a Month

Qatari company Ooredoo is planning to end Burma’s long wait for affordable mobile phone services next month, according to Mizzima.

“We will be selling our SIM cards in the third week of August, but for now we cannot confirm what the calling rates will be,” Mizzima quoted the company’s public relations manager Thiri Kyar Nyo as saying.

In a statement Thursday, the company said it had begun trialing its network with local distributors, six of whom have been named as the company’s partners in different regions of the country.

More than a year ago, Ooredoo and Norway’s Telenor were named as the winners of a highly competitive tender to be the first private operators in Burma’s telecommunications sector.

Burma’s only existing mobile phone operator, the state-owned Myanmar Post and Telecommunications (MPT), has recently teamed up with Japanese companies KDDI and Sumitomo, who have announced plans to invest US$2 billion to modernize MPT’s services and compete with the newcomers.

MPT has historically restricted the distribution of SIM cards so not to overload its limited network, driving a black market on which people paid hundreds of dollars each for SIM cards.

But as the foreign operators get closer to selling their SIM cards, which are expected to cost 1,500 kyat, or about $1.50, MPT has increased the supply through lotteries and prices have fallen.

According to Eleven Media, MPT is currently preparing to finally put SIM cards on general sale.

“We are planning to change the sale plan of CDMA 800 MHz and GSM SIM cards. When we have finished making arrangements, we will announce the time to start it,” said MPT General Manager Khin Maung Tun, according to Eleven.

Bangkok Airways Plans Chiang Mai Links to Burma: Report

Thai airline Bangkok Airways is planning to launch flights connecting the northern Thai tourism hotspot of Chiang Mai with Burma’s two biggest cities, according to the Bangkok Post newspaper.

A report on Thursday cited “insiders” saying the privately owned airline wanted to tap into the market created by the growing number of people flying into Burma.

“[Bangkok Airways] will offer four flights per week on the new Chiang Mai-Yangon route and three a week on the Chiang Mai-Mandalay service,” the newspaper said.

At present, only Tay Za’s Air Bagan flies between Rangoon and Chiang Mai, operating two flights per week.

However, Burmese airline Air Kanbawza has also declared plans to fly between Rangoon and Chiang Mai, as well as Mae Sot, a town on the eastern side of the Burmese-Thai border. Local carrier Asian Wings has also launched flights between Chiang Mai and Mandalay.

“Bangkok Airways is already the largest provider of flights from Thailand to Myanmar, operating three routes from Bangkok to Yangon, Mandalay and Nay Pyi Taw with a combined 40 flights a week,” the Bangkok Post said.

Regional Approval Slows Onshore Oil and Gas Contracts

The companies named in October as winners of 13 onshore oil and gas exploration blocks are still waiting to sign agreements with the government so they can start work.

According to The Myanmar Times, the deals have already been agreed by the Myanmar Investment Commission and the Cabinet, but still need to be approved by regional authorities.

The newspaper said the original deadline for the signing of the contacts was in June.

“The contracts for the onshore blocks are going to be signed at the end of month,” it quoted Win Maw, deputy director general of the Energy Ministry’s Energy Planning Department saying. “If not, it cannot be later than early August.”

Malaysia’s Petronas, ONGC Videsh Limited of India, Eni of Italy and Canada’s Pacific Hunt Energy Corp were among the companies named as winners of 10 production sharing contracts and three Improved Petroleum Recovery agreements in the onshore tender.

In March, Burma also named the winners of 20 offshore blocks, including deepwater areas that will be explored by companies including Anglo-Dutch firm Royal Dutch Shell, France’s Total, Norway’s Statoil and ConocoPhillips from the United States. The contracts for those blocks have also yet to be signed.

Forbes Reports Problems for Burmese Tycoon Tay Za

Burma’s most notorious “crony” is under increased scrutiny from the US government over his apparent involvement in North Korean arms deals, according to Forbes magazine.

Tay Za and his companies appear on the US Treasury Department’s Specially Designated Persons list because the US government believes he acted as an arms dealer for Burma’s former military regime.

A story about the businessman, which was published online this week and appears in the Aug. 18 issue of Forbes Asia, includes an interview with Tay Za and details of financial documents shown to the magazine.

Singapore’s United Overseas Bank (UOB) wrote to Tay Za in April to inform him it was closing nine of his bank accounts, it said.

“The letters gave no explanation, and UOB did not respond to a request for comment, but Tay Za says the bank became nervous after American officials raised questions about transfers he made to companies in China with alleged links to North Korea,” Forbes reported.

In the article, Tay Za admits that he made $300 million of financial transfers on behalf of the Burmese government, but claimed he had no choice in the matter. “Whatever the government requests, I have to handle,” he was as quoted saying.

Reports also emerged this week that suggest TayZa is offloading his majority stake in Asian Green Development Bank, the bank he founded in 2011. The grandsons of Burma’s late dictator Gen. Ne Win said they will buy at least 60 percent of the bank, although Tay Za himself and officials at the bank have not confirmed the news.

In the Forbes article, Tay Za complained that his businesses are suffering as a result of American sanctions.

“For example, he says, he may be forced to shut down his Air Bagan airline, which has lost about $90 million over the past couple years, in part because he is not allowed to buy American-made spare parts at market prices,” he said.