Myanmar set for mobile boom
Myanmar is on the cusp of a technological revolution through which the government hopes to extend mobile phone ownership from nine to 80 per cent of the population, reports Neasa MacErlean.
Contracts have just been awarded to two companies which will enter into competition with the sleepy state provider. The actual licences - which last for 15 years - are due to be set out by the end of September. Experts monitoring the market will wonder if all these aims are achievable. But, even if they are only half-fulfilled, Myanmar - aka Burma - is one of the world’s last untapped mobile markets and has the potential to offer hefty rewards to the brave.
The winner takes all
That is why 90 mobile companies showed interest in the tender process with the government. The list was then whittled down to 11 companies - including Singtel, Bharti Airtel and the company in which George Soros invests, Digicel. But none of these names made it down to the final two. Instead, Telenor of Norway and Ooredoo of Qatar were the ones doing victory dances when the results were announced in late June. Doing a slower jig was the partnership which came third - Telecom-Orange of France and Japan’s Marvbeni Corporation - which has been appointed first reserve in case there is a problem with either of the winners.
International law firms
International law firms have as much to win as the clients they serve. The Legal 500 lists only six legal practices in Burma. They are mainly regional firms based in the nearby states of Thailand, Vietnam and Singapore - as well as Russia-based Russin & Vecchi. Allens is also an influential international firm in the zone. Marae Ciantar, the Singapore-based head of Energy and Projects, has been advising one of the telecoms companies pitching for the work. Herbert Smith has also been tracking events. It behoves all top practices to keep an ear to the Burmese ground - as the country also has large reserves of oil and gas and 90 per cent of the world’s jade. If the telecoms market opens up as planned, these sectors will also be liberalising.
Legislation in conception
Lawyers will have a huge role to play as Myanmar drags itself into the 21st century and cordial relations with the rest of the world. For instance, laws have yet to be passed to govern this new telecoms sector. And the new licences for Telenor and Ooredoo will probably need much negotiation. Myanmar will need to develop an effective regulatory environment for the competition that ensues. And a new era has, indeed, started here. Before the announcement regarding Telenor and Ooredoo, the state provider Myanmar Posts and Telecommunications was selling SIM cards for a price equivalent to six weeks of a teacher’s pay. When Telenor and Ooredoo start selling - sometime before summer 2014 - a teacher will need to work only to the first break in one morning to buy a SIM card.
All eyes are now on Telenor and Ooredoo. 'What’s next for Ooredoo and Telenor?' asks regional firm VDB Loi from its Myanmar office. 'The Myanmar telecom tender is not (entirely) over yet. The selected winners Ooredoo and Telenor will.....set up a local company and obtain an investment license from the Myanmar Investment Commission.
Both steps may be more challenging than one would think.
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