Vodafone Group Plc (NASDAQ:VOD) (LON:VOD) and China Mobile Ltd. (NYSE:CHL) (HKG:0941) partnered to bid against 20 other telecommunications companies to obtain a mobile network license in Myanmar.
The country emerged as one of the most important growth markets in the telecommunications industry worldwide.
Vodafone Group Plc (NASDAQ:VOD) (LON:VOD) and China Mobile had a long history of strategic partnership. Vodafone was a shareholder in the Chinese telecommunications company until 2010. In a statement, Vodafone said that Myanmar telecoms industry is, “about to enter a period of rapid structural expansion as the government seeks to increase the number of mobile operators from two to four.”
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Hedge fund managers, George Soros and Jim Rogers were among the many investors who believe that Myanmar is the best opportunity for investment in Asia. Soros decided to invest in in Myanmar through its investment fund. Quantum Strategic Partners Ltd. teamed-up with Yoma Strategic Holdings and Jamaican-based Digicel Group Ltd to expand in emerging markets.
The group submitted their pre-qualification proposal to obtain a license in Myanmar.
Soros previously stated, “The liberalization of the telecommunications market in Myanmar will serve as an important economic stimulus for the country.” Soros and Rogers co-founded the Quantum Fund.
Myanmar plans to select two telecommunications companies or group to develop and improve its mobile network nationwide. The government already started its formal bidding process, which attracted the leading players in the industry as well as big time investors who are looking for untapped growth market worldwide. The amount of the licenses is not yet clear, but analysts in the region speculated that it would be around $1.5 billion.
Investors find this is one country with the best opportunity for telecoms because of its younger population of approximately 60 million and the mobile usage is below 10 percent. Myanmar’s mobile usage is significantly lower that other emerging countries. Its economy’s annual growth rate is around 5.5 percent.
An analyst based in Bangkok said, “Basically the only way to go with telecoms in Myanmar is ‘up’ – this is one of the last remaining untapped markets.”
Myanmar will issue two licenses for the companies to build, own, and operate mobile networks in the country for 15 years. Twenty-two entities have already submitted their pre-qualification bids, and the government is expected to conduct its first round of selection next week.
The government will announce the winning bidders by the end of June. The country’s telecoms industry is still controlled by the state-owned telephone service provider, Myanmar Post and Telecommunications.