Companies awarded telecommunications licences in Myanmar this week will need to spend billions of dollars rolling out networks across a country that has yet to pass a law to govern the sector and where opaque, state-owned enterprises will remain players.
The process is being watched closely as a test case for reform in Myanmar, although the risks did not stop 90 international firms and groups from joining the initial phase.
Faced with big investments and uncertain returns however, Vodafone Group and China Mobile dropped their joint bid for a licence, saying it did not meet their “internal investment criteria.” The remaining 11 short-listed contenders include Singapore Telecommunications, KDDI and Telenor.
“Nobody has any experience or any idea how the government is going to regulate the sector,” said Edwin Vanderbruggen of Yangon-based law firm VDB Loi, which advises telecom companies hoping to do business here.
After decades of isolation and economic mismanagement under the military, mobile phone penetration in Myanmar is put at 4 to 9 per cent of its 60 million people, lower even than North Korea.
The government of President Thein Sein has pushed through a series of political and economic reforms since 2011, and the award of mobile licences on June 27 should bring a leap forward in digital technology that could speed up economic development.