YANGON Jan 10 Japan's KDDI Corp and
Sumitomo Corp are likely to partner of Myanmar's
state-backed telecommunications operator to expand services in
one of the world's least-connected countries, a Sumitomo
Sumitomo's deputy general manager in Myanmar, Soe Kyu, told
Reuters the companies were jointly invited into "exclusive"
talks about becoming the international partner of Myanmar Post
and Telecommunication (MPT), sharing its existing licence. No
further details on the likely partnership were revealed.
MPT is currently the country's sole telecoms operator as
well as the industry's regulator. The government plans to create
a new regulator by 2015 and will divest a part of MPT but will
retain a majority stake. That company, with a new name, will be
one of four licensed operators.
State-backed Yatanarpon, primarily an Internet service
provider until now, also holds a licence. Norway's Telenor
and Qatar's Ooredoo won the hotly contested
bidding for two new licences in June, but are still waiting for
final approval before starting to roll out their networks.
Soe Kyu noted that a partnership between Sumitomo and KDDI
had been shortlisted for the two international licences awarded
in June. He added that barring any unforeseen circumstances, the
consortium would instead agree a partnership with MPT within a
couple of months. "This time we are confident," he said.
A senior MPT official told Reuters the government was
delaying the final approval of licences for Ooredoo and Telenor
until regulations are drawn up following the passage of a
telecommunications law in October that allowed foreign telecoms
companies to operate for the first time.
Telecommunications were tightly controlled under decades of
military dictatorship in Myanmar, 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 in
2012 that less than 4 percent of the country's 60 million people
Since 2011, a quasi-civilian government has implemented
sweeping political and economic reforms and has made
telecommunications a key part of its plan to jump-start the
The government has released more SIM cards into the market
in recent months, although not nearly enough to satisfy demand
and they still sell for about $160. Mobile phone penetration has
jumped to 9 percent, according to government figures.
Ooredoo's Myanmar CEO, Ross Cormac, told Reuters on Oct. 31
his company could roll out a network and provide mobile phone
and data services in Myanmar's four biggest cities within six
months of getting final approval. Ooredoo would reach 97 percent
of the population within five years, he said.
The operators will have their work cut out for them in a
country with little infrastructure in rural areas, several
ethnic armed groups controlling large swathes of territory, and
where land ownership is a complicated and volatile issue.
Law firm VDB Loi, which represents Ooredoo, has urged the
government to simplify the process of acquiring land to build
towers necessary to extend service across the country.
Cormac told Reuters that Ooredoo plans to share the building
and use of infrastructure with Telenor and MPT, or one of the
two. He said subcontractors would negotiate with ethnic armed
groups to extend the network into territory under their control.
(Editing by Elaine Hardcastle)