Ooredoo planning an exit from Myanmar

As announced by Reuters this week, Ooredoo, the third mobile operator in size of the country, is in talk to sell its operation in Myanmar.

According to the US news agency, the Qatar-based operator has already informed the ministry of post and telecommunication (PTD) of its intention to sell its local unit to the highest bidder.

Some potential buyers well known to the Myanmar market have been revealed in the article:

The conglomerate, Young Investment Group, is already active in the telecom sector through its subsidiary Eco Friendly Towers, a tower company providing construction and tower rental services.

Internet Service Provider Campana Group is also one of the contenders for the acquisition of Ooredoo. The Singapore company is already active in Myanmar and provides wholesale internet capacity as well as cloud services.

Finally, the last party interested in this acquisition is SkyNet which is part of Shwe Thanlwin group. Skynet is the most popular TV broadcast provider in Myanmar.

Ooredoo’s move to exit the country was preceded a few weeks ago by Telenor which sold its operation to the Lebanese M1 Group now operating under the brand Atom Myanmar.

There are multiple reasons that can explain why telecom operators are leaving the country.

The reason evoked by Telenor is the concern over user privacy, as the junta requested all operators to implement an intercept surveillance system, so they can rapidly track down and prosecute opponents to the regime.

But there is much more to it than a simple privacy concern.

First, mobile data is still shut down in several parts of the country, causing revenue loss for the telecom operators.

Second, all telecom services are also now taxed up to 15% instead of 5% previously, which also impacts telecom company’s revenue.

Third, the recent decisions from the central bank have also altered the trust of foreign investors.

It is nowadays extremely difficult to convert Myanmar Kyat to foreign currency and transfer money overseas as the country tries to keep the economy afloat and stabilize its currency.

The central bank also ordered the local companies to suspend and reschedule foreign loans.

Overall, it is the uncertainty of the situation that spooks foreign investors out.

It is likely that more foreign companies will leave the country in the coming months as they feel the new government does not give them enough confidence to operate any longer.