Communications Ministry to Issue Fourth Telco License Before New Govt Takes Office

By Kyaw Hsu Mon 8 December 2015

RANGOON — After months of delays, the Ministry of Communications and Information Technology now says that Burma’s fourth and final telecoms operator will be finalized before the new government takes office at the end of March.

The tender for the position was opened to domestic firms in July, and the fourth license was expected to be awarded by mid-October. However, the decision was once again delayed, reportedly due to concerns over Burma’s uncertain political climate.

The Ministry of Communications and Information Technology received letters of interest from 17 companies, 11 of which were selected to be a part of a newly formed public company that will work in tandem with a foreign service provider selected by the government.

“We formed the public company from local firms in November, and now we’re in the process of selecting a foreign firm to work with this company. After this decision has been made, we will issue the license,” Chit Wai, deputy permanent secretary of the Communications Ministry, told The Irrawaddy.

Chit Wai would not reveal which firms were selected to form the consortium.

“What I’ll say is, the process of selecting the license won’t be transferred to the next government. It will be finished during the current term,” he added.

According to industry sources, the Myanmar Computer Industry Association and the Myanmar Rice Federation are some of the larger local firms included in the company.

Lwin Naing Oo, managing director of the local telecoms service provider Shwe Pyi Ta Kon, which was also included in the consortium, said that each of the 11 firms has put capital—approximately US$2.3 million each—toward the venture, in line with official regulations.

“We’re following government rules for this process, and as far as we know, the government is now looking for a foreign firm to work with the company, at which point the license will be issued,” Lwin Naing Oo said.

Interested local firms had to be in possession of at least 3 billion kyats ($2.3 million) or have enough capital reserves to create a new public telecoms company. Domestic stakeholders must also provide technical services, develop market strategies and foot some of the bill for the licensing and consulting fees required for selecting a foreign partner.

“We don’t actually know what percentage of the share will belong to local firms and what to foreign firms, but it will have to follow the law, specifically the investment law,” Lwin Naing Oo added.

Amendments to the law are still being discussed in the Union Parliament.

Lwin Naing Oo also mentioned that the government appeared to be conducting the search for a foreign partner cautiously, likely because the fourth operator will become the biggest public company in the telecoms operation industry.

The government has so far issued three licenses, to Myanmar Post and Telecommunications (MPT), Qatar’s Ooredoo and Norway’s Telenor.

State-owned MPT monopolized Burma’s telecoms industry under the military’s decades-long rule, but competition in the sector has been ratcheted up since foreign companies were first allowed to enter the market in August 2014.