Telenor, Ooredoo finally sign Myanmar licences

Telenor and Ooredoo both confirmed on Thursday they have finally been awarded 15-year licences to provide mobile communications services in Myanmar.

The delay in signing the licence agreements has already put back original plans to start services from the middle of this year. The Norwegian operator and Qatar-based Ooredoo won the country's first foreign-held mobile licences back in June 2013, and were originally expected to sign the agreements in September last year.

In a statement, Telenor said it now plans to launch services within eight months after the licence is awarded. "The people of Myanmar are ready for world-class mobile services and Telenor is ready to deliver it," said Jon Fredrik Baksaas, president and CEO of Telenor Group.

With a population of around 60 million, of which less than 10 per cent have access to mobile services, Myanmar represents a strong business opportunity for both operators in Asia.

Telenor said it is targeting EBITDA break-even in Myanmar within three years after the licence award. The operator said the total peak funding, defined as the licence fee plus accumulated losses until operating cash flow break-even, is expected to be around $1 billion (€738 billion). The license fee is $500 million.

Reuters noted that this is lower than the $1.5 billion-$2 billion that analysts had expected Telenor to spend.

Telenor said it will build an HSPA and LTE-ready network, and plans to provide network coverage for 90 per cent of the population in Myanmar within five years. Voice and data services over 2G and 3G will be commercially launched as Telenor's initial offering. Currently, the company has a workforce of 150, and is expected to hire 1,000 full-time employees by the end of 2014.

Ooredoo said it has started building out its 3G network, partnering with industry leaders where necessary. The operator added that the network would also be able to comply with technological advancements such as LTE in years to come. Reuters noted that Ooredoo has previously said it would begin rolling out a network within six months and aims for 97 per cent coverage in five years.

The Wall Street Journal added that Ooredoo has pledged an investment of $15 billion to develop Myanmar's telecoms sector.

The opportunity to sell SIM cards in the country initially drew interest from over 90 companies.

For more:
- see this Telenor release
- see this Ooredoo release
- see this Reuters article
- see this Wall Street Journal article (sub. req.)

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