Telenor aims to break even on 15-year Myanmar deal in 3 years
OSLO (Reuters) - Norwegian telecoms group Telenor signed a 15-year licence deal in Myanmar and said its operations in one of Asia's poorest countries would reach cash-flow breakeven within three years, the firm said on Thursday.
Telenor, which has about 150 million subscribers in Asia, the Nordics and central Europe, said it would pay $500 million for the licence while peak funding costs, or the fee plus accumulated losses until the cash flow breakeven, would be about $1 billion.
"With a population of around 60 million, of which less than 10 percent have access to mobile services, Myanmar represents a strong business opportunity for Telenor in Asia," said Telenor, which already operates in neighbouring India, Thailand and Bangladesh.
Myanmar picked Telenor and Qatar's Ooredoo last year to build new mobile networks in a milestone for the country's transformation from totalitarian rule to quasi-civilian government under reformist President Thein Sein.
The EU, the United States and other Western countries have increased aid and investment, and suspended most sanctions against the country as in response to liberal reforms unimaginable under the juntas that ruled for 49 years.
Telenor said it would launch voice and data service within eight months and expects to cover 90 percent of the country's population within five years, while Ooredoo said it would begin rolling out a network within six months and aims for 97 percent coverage in five years.
Telecommunications were tightly controlled under decades of military dictatorship, with the government monopolising the sector and selling SIM cards for thousands of dollars when they were introduced a decade-and-a-half ago. The restrictions left Myanmar with the lowest mobile penetration rate in the world.
(Reporting by Terje Solsvik; Editing by Balazs Koranyi and Louise Ireland)
