Major telcos and investor Soros set sights on Myanmar

LONDON Thu Apr 4, 2013 12:19pm EDT

A labourer works in front of a sign for China Mobile at the company's office in downtown Shanghai March 11, 2013. REUTERS/Carlos Barria

A labourer works in front of a sign for China Mobile at the company's office in downtown Shanghai March 11, 2013.

Credit: Reuters/Carlos Barria

LONDON (Reuters) - China Mobile (0941.HK), Vodafone (VOD.L) and a group backed by George Soros entered the race to secure a mobile license in Myanmar, as the battle to operate in one of the last major untapped markets kicked off.

The Chinese and British groups, the first and second-largest operators in the world respectively, said on Thursday they had formed a consortium to bid for a license in the former Burma, where the government wants to increase the number of mobile operators from two to four.

In a separate consortium, Denis O'Brien's Digicel joined forces with billionaire investor George Soros' Quantum Strategic Partners and Serge Pun, a well known business leader in Myanmar.

That consortium is looking at an initial project investment of between $1.5 billion and $2 billion, a person familiar with the situation said.

The groups made their intentions known as the deadline for pre-qualification applications closed, joining the likes of Africa's largest mobile phone company MTN (MTNJ.J), India's top mobile operator Bharti Airtel (BRTI.NS) and Singapore's SingTel (STEL.SI) in expressing an interest.

The presence of such big names reflects the wider interest in the country, since its military stepped aside and a quasi-civilian government took over in 2011, setting off a wave of political and economic reforms.

Myanmar, where SIM cards are prohibitively expensive, has said it hopes to increase mobile penetration from 5-10 percent to 80 percent in three years, lifting it off the bottom of the world's ladder of mobile use.

The country stands out as a rare opportunity in international telecommunications as operators battle stagnant markets in Europe and rapid growth but very low prices in emerging markets.

"With a comparatively young and highly literate population of around 60 million, a GDP growth rate of 5.5 percent per annum and mobile phone penetration currently below 10 percent ... Myanmar will be an important new market for the global mobile industry," Vodafone said.

Two licenses are being tendered to authorize the holders to build, own and operate a mobile network on a nationwide basis for a term of 15 years.

"The liberalization of the telecommunications market in Myanmar will serve as an important economic stimulus for the country," said Soros.

(Editing by Helen Massy-Beresford)