Japan's KDDI, Sumitomo Corp to Invest $2 bln in Burma’s MPT

By Teppei Kasai 17 July 2014

TOKYO — Japan’s KDDI Corp and Sumitomo Corp, in partnership with Burma’s state-backed telecoms operator, plan to invest about $2 billion over the next decade to expand services in one of the world’s least-connected countries.

No.2 Japanese wireless carrier KDDI and trading house Sumitomo will invest in telecoms infrastructure and jointly operate mobile and broadband services with Myanmar Posts and Telecommunications (MPT).

MPT will split earnings from the Burma operations roughly equally with a Singapore-based joint venture of the Japanese firms that will be formed in August, Sumitomo Executive Vice President Shinichi Sasaki told a news conference.

“We’ll be able to reach profitability in a short period of time,” KDDI Senior Vice President Yuzo Ishikawa said.

In January, Sumitomo’s deputy general manager in Burma, Soe Kyu, told Reuters the companies were jointly invited to exclusive talks about becoming the international partner of MPT.

MPT is currently Burma’s sole telecoms operator as well as the industry regulator. The government plans to create a new regulator by 2015 and divest a minority share in MPT, which will remain one of four licensed operators.

State-backed Yatanarpon, until now primarily an Internet service provider, also holds a license. Norway’s Telenor ASA and Qatar’s Ooredoo QSC won hotly contested bidding for two new licenses in June 2013 and are now building their networks.

Burma’s telecoms industry was tightly controlled under decades of military dictatorship, with the government monopolizing the sector and selling SIM cards for thousands of dollars when they were introduced a decade-and-a-half ago.

As a result, Burma had one of the world’s lowest mobile penetration rates. Swedish telecoms giant Ericsson said in 2012 that fewer than 4 percent of its 60 million people were connected.