Qatar's Ooredoo launches Myanmar telecom network

YANGON Sat Aug 2, 2014 1:54am EDT

YANGON Aug 2 (Reuters) - Qatar's Ooredoo on Saturday launched telecommunications services in Myanmar, one of the world's least connected countries.

Ooredoo will take on two rivals rolling out networks in Myanmar, which has only 10 percent mobile penetration according to government figures. Norway's Telenor Group won the other licence granted to foreign operators.

More than 90 companies and consortia submitted expressions of interest after the government issued a tender for the two licences last year.

"They really challenged the international industry in their international tender and created the most competitive process the world has ever seen in telecommunications," Ooredoo Myanmar CEO Ross Cormack told reporters in Yangon, the commercial capital.

The country's sole telecoms provider until now, state-run Myanmar Posts and Telecommunications (MPT), last month announced its partnership with Japanese firms KDDI Corp and Sumitomo Corp.

Sumitomo, a trading house, and KDDI, Japan's second-largest wireless carrier, said they would invest about $2 billion to expand the existing network.

Cormac said Ooredoo's voice and 3G internet services will initially be available in Myanmar's three main cities of Yangon, Mandalay and the capital, Naypyitaw. The network will cover 25 million of Myanmar's approximately 60 million people by the end of the year and 97 percent of the population within five years, he said.

Telenor will launch its voice and data services in September in the three largest cities and will reach 90 percent of the population within five years, spokeswoman Hanne Knudsen told Reuters.

Edwin Vanderbruggen of law firm VDB Loi, which has offices in Myanmar and neighbouring countries, said MPT and its partners may have an advantage over the foreign operators, which face a legal maze in securing land for tower sites.

"As a locally-owned entity, MPT can roll out a network faster, at least in theory, because it can hold land without restrictions," he said. "Foreign-owned companies have to jump through more hoops and that might slow things down."

Ooredoo could face another challenge: nationalist monks have called for a boycott because the company hails from Qatar, an Islamic nation.

Myanmar is riven by strife between its Buddhist majority and Muslims who make up only about 5 percent of the population, but have overwhelmingly been the victims of clashes that have killed more than 200 people over the past two years.

Cormack stressed that Ooredoo has 800 local employees working to connect the entire population.

"This for everybody," he said. "Every creed, colour and religion can enjoy these wonderful services."

Hate speech and sectarian tension have accompanied sweeping reforms in Myanmar that include easing restrictions on speech, which were initiated by the semi-civilian government that took over in 2011 after 49 years of military rule.

Telecommunications were tightly controlled by the former junta with the government monopolising the sector and selling SIM cards for thousands of dollars when they were introduced a decade-and-a-half ago.

As a result, Myanmar had the lowest mobile penetration rate in the world with Swedish telecoms giant Ericsson saying that in 2012 less than 4 percent of the country's population was connected. (Editing by Matt Driskill)