Junta Cronies Eye Telenor’s Myanmar Business
By The Irrawaddy 11 November 2021
With Norwegian telecom giant Telenor Group’s plan to sell its local business in Myanmar to Lebanese investment company M1 Group mired in uncertainty, businesses owned by military cronies are showing an interest, sources close to them and local telecom operators told The Irrawaddy.
Telenor announced in July that it was selling its local operations to M1 Group for US$105 million. The move prompted criticism from rights groups, who said Telenor had failed to consult civil society stakeholders on the sale, and pointed to M1’s business dealings with authoritarian regimes. Telenor confirmed its plans in September, however, saying it could not maintain its presence in Myanmar, as doing so would require it to help the military regime conduct surveillance of its clients.
The military regime is however reluctant to approve the deal with M1, and has indicated it favors at least part-ownership by a local company.
Among the companies that have signaled interest in purchasing Telenor Myanmar are Amara Communications Co. Ltd., a subsidiary of IGE Group owned by U Nay Aung, who is a brother of Myanmar Navy chief Admiral Moe Aung; and KT Group owned by Johnathan Kyaw Thaung, which has partnerships with military-linked businessmen including U Aung Pyae Sone, the son of coup leader Min Aung Hlaing.
Yoma Strategic Holdings, a Myanmar conglomerate owned by tycoon Serge Pun involved in banking and other consumer industries, is also interested in acquiring a stake in Telenor Myanmar, Financial Times reported.
Together with Telenor Group, Yoma Strategic Holdings and Yoma Bank—both of which are affiliated with Serge Pun—run the mobile financial services business Wave Money. Telenor has a 51-percent stake in the business with Yoma Strategic Holdings holding 44 percent and Yoma Bank 5 percent.
M1, an investment firm owned by the family of Lebanese Prime Minister Najib Mikati, is in advanced talks about a partnership with at least one Myanmar company, Shwe Byain Phyu Group, which has interests in petrol stations and gem mining, Reuters has reported.
Swe Byain Phyu’s chairman, Thein Win Zaw, is a director of Mahar Yoma Public Company, part of a consortium that has a stake in military-owned telecom operator Mytel.
“As IGE Group is currently engaged in telecommunications services, it is more interested than other companies in purchasing Telenor Myanmar,” a director of a local telecom company told The Irrawaddy.
He suggested a consortium of local businesses rather than a single business is likely to purchase Telenor Myanmar because it needs a huge amount of investment to run a telecommunications service.
Amara Communications Co. Ltd. is interested in acquiring a stake in Telenor Myanmar if the opportunity arises, U Myint Ko Ko, head of legal and regulatory at Amara Communications, told The Irrawaddy.
However, he added, “Even if we have a chance to acquire and operate it, we won’t if its operation could impact the privacy of the public, or if the concession is not transparent,” he told The Irrawaddy.
He said it was currently difficult to confirm whether Amara Communications could buy a stake in Telenor Myanmar, because the Ministry of Transport and Communications has not yet made an official decision.
A person at KT Group who took The Irrawaddy’s call declined to answer questions.
Telenor said it is waiting for a formal response from the junta-controlled Ministry of Transport and Communications to its request to sell its Myanmar unit to M1. Ministry officials declined to comment when asked by The Irrawaddy if the regime is pressuring the Norwegian telecom operator into selling its Myanmar business to local companies.
There is no existing law in Myanmar regulating what sort of companies a telecom operator can or cannot sell its business to, said a former senior executive from a telecom operator.
“They might invite bids just to show that there is transparency in the process. But there are many ways to make the tender under the table,” he said.
Telenor Group might come under greater pressure from international human rights agencies if it sells its business to companies with links to Myanmar’s military, he said.
When Telenor and Qatar’s Ooredoo were granted telecom operator licenses in 2013, nationalist and anti-Muslim groups called for a boycott of Ooredoo, warning that such a sensitive sector should not be sold to a company based in an Islamic country.
The military regime might prefer a joint venture between a foreign firm and Myanmar companies as it can be technically challenging for local firms to operate telecom services alone.
Apart from Telenor and Ooredoo, two other telecom operators in Myanmar are joint ventures between local and foreign businesses: MPT is a joint venture between state-owned Myanma Posts and Telecommunications and Japanese firms KDDI Corporation and Sumitomo Corporation; and Mytel is a joint venture between Vietnamese military-run Viettel, Myanmar military-run Star High Public Co. Ltd. and Myanmar National Telecom Holding, which is a consortium of 11 local companies.
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