Viettel officially licensed to expand in Myanmar

At a ceremony on January 12 in the capital Nay Pyi Taw, Myanmar’s Ministry of Transport and Communications awarded the license to Myanmar National Tele & Communications (MNTC), a joint venture between Viettel Global, the international investment arm of Viettel, and two local firms, according to Reuters news agency.

 

Last year, a tender was announced, inviting international telecom companies to join with MNTC to form Myanmar’s fourth mobile operator. Viettel Global was the only partner selected in March to enter further negotiations and apply for the fourth operator license.

 

According to the agreement, Viettel will have a 49 per cent stake in the new venture, while its two local partners will hold the remaining majority stake. Myanmar National Telecom Holding Public, a consortium of 11 local companies, and military-owned Star High Public Company will hold 23 and 28 per cent, respectively, according to the ministry.

 

The license is valid for 15 years and can be renewed.

 

Viettel, already present in nine other international markets, said last April that it would invest $1.5 billion in Myanmar, its biggest foreign investment to date. Myanmar is also Viettel’s most populous overseas market with over 53 million people. It set the goal to provide nationwide coverage within one year and extend its network to 95 per cent of the country’s population within three years.

 

The new network will take the brand name Mytel. Viettel’s overseas markets have different brand names, such as Unitel in Laos, Bitel in Peru, Halotel in Tanzania or Nexttel in Cameroon.

 

The new venture will heat up competition in the rapidly growing market.

 

In 2012, Myanmar decided to end state monopoly in its telecommunications market and awarded two additional licenses to foreign operators Telenor from Norway and Ooredoo from Qatar in February 2014, according to the country’s Ministry of Transport and Communications.

 

Thanks to the liberalisation initiative, the mobile penetration rate in Myanmar (the ratio of active mobile phone users), has skyrocketed from 9.5 to 77.7 per cent within two years, a record speed in the history of mobile telecommunications, according to the ministry.

 

A decade ago, when Myanmar was governed by a military junta, SIM cards and mobile phones cost thousands of dollars and were a luxury only a few could afford. However, several years into the broad economic liberalisation and political reforms starting in 2010 that saw the military handing over power to a civilian government, SIM cards now cost less than $2. According to an estimate reported by Forbes magazine, mobile subscriptions went from 3-4 million to 45 million in only two years.

 

While many state-owned enterprises in Vietnam are mired in debt and graft scandals, military-owned Viettel has remained an exception to an altogether sad rule. It has expanded to nine markets across Asia, Latin America, and Africa. Currently one of the world’s fastest growing telecom operators, Viettel has over 85 million subscribers worldwide.

 

Viettel is the No. 1 mobile network provider in Cambodia, Laos, Mozambique, and Timor Leste, according to its website. Its ambitious plan is to expand to 20-25 countries by 2020, servicing about 600-800 million subscribers and joining the world’s top 10 telecom firms by outbound international investment, as reported by VIR last year.