Reuters reported yesterday that Qatari telecoms company Ooredoo is in talks to sell its Myanmar unit, a move that would deprive the country of its last foreign telecoms operator following the departure of Norwegian company Telenor earlier this year.
Citing two people familiar with the matter, the news agency reported that Ooredoo informed the Myanmar Department of Posts and Telecommunications of its intention to sell its local operation.
Ooredoo was launched with much fanfare in 2014, but like many foreign investors in Myanmar, it has been hit hard by the political turmoil that has engulfed the country since last February’s coup. The Doha-based company’s customer base in Myanmar has shrunk from 15 million subscribers in 2020 to just 9 million customers in 2022.
Reuters reported three potential buyers for Ooredoo’s Myanmar unit: Myanmar conglomerate Young Investment Group; Singapore-based network infrastructure operator Campana Group; and the SkyNet telecommunications company, owned by the local group of companies Shwe Than Lwin.
Ooredoo would become the latest foreign company to leave the country since the coup, which has transformed Myanmar from one of the most promising investment opportunities in Asia to one of the worst. As I noted yesterday, Fitch Solutions has projected that the country’s economy reduce by 5.5 percent in the current fiscal year through September, after posting a staggering 17.9 percent contraction in 2020-21, largely as a result of the military coup and the conflict and instability it has unleashed.
This is inhospitable investment terrain for any international company, but telcos also faced unique challenges, such as mobile data board closures and internet restrictions in parts of the country. The military administration has also pressured telcos to accede to its repressive demands to hand over user data and implement mandatory surveillance capabilities.
This latter consideration has heavily influenced the decision of Telenor, Norway’s largely state-owned telecommunications provider, to pull out of Myanmar last year. In May 2021, just three months after the coup, Telenor Announced that it had decided to cancel the value of its operation in Myanmar, in light of the “irregular, uncertain and deeply worrying situation” in the country.
After a tortuous negotiation process, Telenor officially completed his departure of Myanmar in March this year, having sold its unit to Myanmar firm Shwe Byain Phyu, with a minority stake held by Lebanese investment firm M1. It is unclear how much concern over accepting the board’s repressive demands played a role in Ooredoo’s decision to sell his unit in Myanmar.
The other telcos remaining in Myanmar are MPT, a large state-backed operator, and Mytel, a joint venture between the Myanmar military and Viettel, a company owned by the Vietnamese Defense Ministry. Due to their ties to the army, both have been boycotted and attacked by anti-regime militias; last year, resistance fighters supposedly destroyed more than 400 telecommunications towers throughout the country.
While many foreign companies withdrew from Myanmar last year, including many that entered the country during the limited economic and political opening of the mid-2010s, the departure of large foreign telecoms companies from Myanmar is particularly symbolic. The arrival of Telenor and Ooredoo in 2014 transformed the country’s information environment almost overnight, giving millions access to affordable mobile communications, including 3G Internet access. Before his arrival, the military junta strictly controlled access to SIM cards, ensuring that they cost thousands of dollars each.
While the impact of this connectivity explosion was decidedly mixed (social networks like Facebook would later be accused of facilitating and amplifying hate speech and ethnic cleansing), there is no doubting the excitement that accompanied Ooredoo’s arrival. and Telenor, and the feeling that Myanmar was now a “normal” country after decades of military dictatorship.
The withdrawal of these two foreign investors is far from the most tragic thing that has happened to Myanmar since the military coup. But it is a particularly clear sign of the country’s recent lurch towards repression and pariah status.