Axiata seems lone M'sian firm keen to invest in Myanmar telco sector

B.K. Sidhu in Petaling Jaya/The Star
Asia News Network

Petaling Jaya (The Star/ANN) - As scores of foreign investors race to jump on the burgeoning Myanmar economic bandwagon, it would seem that the only Malaysian company thus far to express interest to be party to the development of the telecoms sector there is Axiata Bhd.

Yesterday, the Myanmar government issued a notice to invite investors to express interest in two telecoms licences up for grabs.

The two licences are to be issued in the middle of this year and Axiata has till January 25 to express interest.

Axiata is likely to heed the "call". In a statement issued yesterday, the telco said: "The government of Myanmar has asked all interested parties to submit an expression of interest by January 25 and Axiata will be doing so."

The tender bid for mobile services is expected to open some time next month, with licences expected to be issued by the end of June.

Axiata is one of the five Malaysian telcos that had scouted for opportunities in Myanmar earlier. The other four are Telekom Malaysia Bhd (TM), Measat Satellite, Maxis Bhd and REDtone International.

TM was non-committal as to whether it would express its interest by the due date. In a statement, it said: "We are currently reviewing the circular and it is very premature to comment at this stage. For now, we are focusing on areas of potential commercial and business collaboration opportunities.''

Separately, it is learnt that the company is trying to establish a virtual node to help with the re-routing of traffic that now goes via an alternative link.

The REDtone boss in an SMS reply, meanwhile, answered: It is not in our plan,'' while response from Measat and Maxis was not obtainable.

Besides Axiata, hundreds of foreign investors are dashing to be party to develop Myanmar, the second-last bastion for foreign investors after North Korea. It is not certain when the latter will open its doors to foreign investors.

The licences to be issued will be for a 10- to 20-year period, with players required to commit to providing reasonable tariffs and low initial registration fees to facilitate accessibility and increase tele-density targets in both rural and urban centres.

The Myanmar government's objective is to increase overall tele-density to 75-80 per cent by 2015-2016. It also wants a strong ICT eco-system for both public and private users.

Alongside Axiata, several telcos from Europe, China, Japan and even Singapore are set to express interest. The fight for the two licences will be tough with even DiGi.Com Bhd's major shareholder, Telenor ASA, being an interested party.

Comments were not available yesterday but earlier, Telenor CEO Jon Fredrik Baksaas had told StarBiz that "Telenor has 15-plus years of experience in similar settings and cultures and we see possibilities in Myanmar. With our code of conduct and operational model, we can have a positive effect in the years to come ... ''

Being a latecomer, Myanmar can avoid making the mistakes its neighbours had made in the deployment of 2G and 3G networks. In fact, experts say Myanmar should just push ahead to deploy the more-advanced 4G network rather than backtracking.

By so doing, it would be able to bring broadband to every part of the country and would make a quantum leap by providing video, data and voice services.

Myanmar is coming up with a new telecoms law and is said to have duplicated Malaysia's Communications & Multimedia Act (CMA) (1998) as its new law.

At present, state-owned Myanma Posts and Telecommunications is the main telecoms operator in the country, while Yatanarpon Teleport a joint venture between local private companies and the government is the Internet service provider.

There are 5.44 million mobile subscribers in the country, representing a 9 per cent penetration rate, while fixed rate is at 1 per cent or 604,000 users. There are 678,000 mobile Internet subscribers in Myanmar.

In contrast, Cambodia's mobile penetration rate is 70 per cent, Lao PDR's 87 per cent and Thailand's over 100 per cent, with both Malaysia and Singapore enjoying rates of over 130 per cent.

The major hurdle to higher penetration rates in Myanmar is the high cost of SIM cards and limited telecoms infrastructure. The government, therefore, wants a commitment from the players for wider coverage and affordable services to be provided as it issues these two licences.