Govt to Select Final Telecoms Partners in September
By Kyaw Hsu Mon 2 September 2015
RANGOON — Burma’s communications ministry will announce this month which local firms will comprise a consortium that will become the country’s fourth and final telecoms operator, according to a ministry official.
Chit Wai, deputy permanent secretary of Ministry of Communication and Information Technology, told The Irrawaddy on Wednesday that the winning bidders will be announced by the end of September.
Last July, a year after two foreign operators revolutionized Burma’s mobile market, the government called on local companies to bid for the country’s remaining telecom spot.
Seventeen local firms have entered the bid to become part of a newly formed public company, Chit Wai said,, and the government is now looking into which have met the prerequisites set by the ministry. Those approved for inclusion in the public company will partner with an overseas firm selected by the ministry.
“I can’t say how many local companies will be rejected. That’s why we’re checking details. The committee expects to announce winners at end of the month,” he said. He declined to say which companies applied, however.
The ministry requires that firms demonstrate possession of adequate financial capabilities –at least 3 billion kyats (US$2.3 million—as well as enough capital reserves to form a new public telecommunications company.
“There’s no limit for how many companies can apply. As long as they’re following the rules and meet the criteria, we will select them,” Chit Wai said.
Interested companies do not have the opportunity to choose their overseas counterpart. The successful bidder is expected to accept the selection committee’s decision regarding a foreign partner. The winner is also responsible for providing technical services, market strategies, and a share of both the licensing fees and consulting fees to help in the selection of a foreign partner.
In the local telecom market, two foreign operators—Telenor and Ooredoo—and state-owned Myanmar Post and Telecommunication (MPT) have been providing fierce competition by offering various services to users in Burma.
Among these services are reduced competitive call rates and attempts to build more towers across the country.
Thiri Kyar Nyo, a communication officer for Ooredoo, welcomed the competition, remarking that “it’s good for the country, too, since all operators will try to attract users with new services.”
“Moreover, building more towers will bring additional improved services,” she said.
In late January, MPT claimed to have reached 11 million subscribers, well ahead of Telenor’s 3.4 million and Ooredoo’s 2.2 million at the end of last year.
All three firms are concentrating on expanding telecommunications infrastructure into the country’s northern hinterlands and border areas, with combined funding commitments currently totaling around US$4 billion.