YANGON: Norway’s Telenor and Qatari firm Ooredoo on Thursday hailed a “milestone” for Myanmar after finalizing telecoms licenses expected to dramatically increase mobile phone use in the long-isolated nation.
Only one in 10 people in previously junta-ruled Myanmar are thought to have access
to a telephone, offering a potentially lucrative pool of customers among the country’s estimated 60 million people.
Telenor, which aims to provide network coverage to 90 percent of the population within five years, said that the country “represents a strong business opportunity,” while Ooredoo said it had already started building its third generation network.
“Today is an exciting day for Ooredoo as we move closer to bringing world-class mobile services to the people of Myanmar, helping empower communities and people with affordable and easy to access mobile telecommunications,” Ooredoo Myanmar boss Ross Cormack said in a statement.
Mobile phones are still a luxury in impoverished Myanmar, with ordinary subscriber identification module cards (SIMs) retailing for $200.
Authorities began selling cheap SIMs for less than $2 each through a lottery system last year, but the scheme is relatively small in scale and many people still rely on manned roadside stalls where they can use conventional telephones to keep in touch.
Myanmar has generated huge international investor interest since wide-ranging reforms introduced under the current quasi-civilian government saw most Western sanctions lifted.
But actual investment has been tempered by nervousness over the regulatory framework.
Telenor and Ooredoo were in June named as winners of the telecoms tender process, which saw some 90 firms compete for a slice of one of the world’s last untapped mobile markets.
A new telecommunications law was passed last year and the deals were finally agreed this week following months of negotiation.
The licenses, valid for 15 years, are the first to be awarded by Myanmar, and will see the two foreign firms enter a market once monopolized by a pair of state companies.
Telenor, which said that the license fee was $500 million, said that it expects to break even in three years.
The firm said that it would now start building a mobile network, although it acknowledged that the process of reaching Myanmar’s scattered rural communities would likely present hurdles.
“Myanmar is a country where there are a number of challenges and we will need to find solutions,” Bangkok-based spokesman Tor Odland told Agence France-Presse.
He cited patchy power and road networks as well as regulatory issues such as land rights—a deeply controversial subject in a country where the military, businesses and rebel groups have been accused of widespread land grabbing.
Ooredoo, formerly known as Qatar Telecom, said that the license was an “important milestone,” adding that it expects services to be available in six months in most major cities before rolling out to more remote areas. The firm has previously said that it would pump $15 billion into the country.