Anil Padmanabhan | Shauvik Ghosh (Livemint)
Nay Pyi Taw: Myanmar on Friday promised the creation of an independent watchdog for telecom in a move that should reassure foreign investors worried about the quality of regulation in the country that’s opening up its airwaves, among other areas, to investment.
The announcement was made at the ongoing World Economic Forum (WEF) on East Asia in Nay Pyi Taw by U Thaung Tin, deputy minister of communications.
The move comes a few days after a consortium led by India’s largest telecom services provider, Bharti Airtel Ltd, submitted bids for two telecom licences, on 3 June, along with 10 other consortia. The winners of the tender will be the second and third telecom services providers in the country after the government-run ministry of communications, posts and telegraph that is also handling the tender. The new licences are being awarded for 20 years with the possibility of another round for bids for two licences once this is done.
Thaung Tin added that the winner of the competitive bids for the privatization of the nation’s telecom network will be announced on 27 June.
Myanmar is one of the last countries to open up its telecom sector, and less than 10%—5.4 million of its 60 million population—have access to a phone. The government has set a target of connecting 75-80% by 2015-2016. The average level of telecom penetration in India was 73.32% at the end of March.
The other bidders include Axiata Group Bhd, Digicel, France Telecom SA, KDDI Corp., Millicom International Cellular SA, Qatar Telecom QSC, Singapore Telecommunications Ltd, Telenor and the Viettel Group. A Vodafone Group Plc and China Mobile Ltd combine chose not to bid in the final round.
Interestingly, the winners will not be decided solely on financial aspects, but mainly on the ability of the telco to fulfil the task at hand—starting operations in nine months and reaching the set telecom penetration targets.
The creation of a telecom watchdog is being seen as a positive move, given the lack of regulation and policy in Myanmar. The procedure being followed by the Myanmar government to open the sector is being seen as very similar to the India model, where, soon after private telecom companies started services in 1995, the government formed the Telecom Regulatory Authority of India (Trai) in 1997.
“The Indian telecom regulatory story has been an eventful one and one hopes that the Myanmar government learns as much from the successes and the failures,” said Mahesh Uppal, a telecom regulatory expert and director at Com First (India) Pvt. Ltd.
“Trai has done well on things like interconnection, ensuring that rates stayed low, and growth was not bogged down, as is the case with many other countries. However, in contrast, the issues around spectrum and licensing, one hopes they avoid,” he said.
“There are two things that a telecom regulator must keep in mind when managing the sector—ensuring sufficient competition for quality of service and tariffing purposes, and ensuring the sector remains an attractive destination for investors,” Uppal added.
