LONDON — Vodafone Group and China Mobile, the two biggest wireless companies, will join forces to bid for mobile licences in Myanmar as investors and operators jostle to be among the first into the Southeast Asian country.
The licen ces would allow Newbury, England-based Vodafone and China Mobile to build and operate a nationwide network for 15 years, they said on Thursday in a statement. Myanmar would announce the licence winners on June 27, Vodafone said, citing the government’s documentation. Vodafone is the majority owner of South Africa’s Vodacom.
Last month, Johannesburg-based MTN announced it was among the companies vying for one of two mobile network licences in Myanmar as the company searches for growth in new markets.
Business Day reported at the time that MTN had been successful in operating in volatile countries, some of which have endured widespread social and political unrest. The company ventured into far-flung territories such as Iran and Nigeria and over the years some of these markets have provided steady revenue and subscriber growth.
Investors are piling into newly opened Myanmar, which has less than 10% mobile penetration among its 64-million people, after the government said it wanted to boost telecommunications coverage to as much as 80% of the population by 2016. Billionaire George Soros has joined with Digicel Group and property developer Serge Pun to bid for the licences, the trio said in a separate statement on Thursday.
"Myanmar will be an important new market for the global mobile industry," Vodafone and China Mobile said. "The licensing round is also an opportunity to accelerate the pace of Myanmar’s social and economic development."
Myanmar’s economy is projected to grow 6.2% this year, up from an expected 5.5% increase last year, according to an October World Bank report. The government said in February that 91 companies had formally expressed interest in the two licences.
Cellphones have been out of reach for most consumers in Myanmar since limited services were introduced in 2001. The cost of activating a phone using the global system for mobile communications standard, or GSM, was initially about 4.5-million kyat ($5,140). That has fallen to about 200,000 kyat for a GSM chip, according to prices at phone vendors in the capital city of Yangon, still an expensive purchase for most.
Still, the state-run MRTV television station said this week that 350,000 low-cost mobile-phone cards a month would be sold in the country, also known as Burma, starting on April 24. The GSM chips would cost 1,500 kyat, the news station said, citing the Myanmar Posts and Telecommunications agency.
Myanmar has said the goal was to make "telecommunications services available to the public at affordable prices".
Bloomberg, with staff writer