Ooredoo Myanmar gets IFC loan for network expansion

Pedestrians walk in front of a billboard advertising telecoms firm Ooredoo in Yangon. By the end of 2015, Ooredoo’s network in Myanmar is expected to cover more than 85% of the population, Ooredoo Myanmar CEO Rene Meza said yesterday.

By Arno Maierbrugger/Gulf Times Correspondent/BangkokThe Myanmar operations of Qatar’s telecom provider Ooredoo will use a loan of $150mn provided by International Finance Corporation (IFC), the investment arm of the World Bank, to co-finance its ambitious development of mobile phone infrastructure in the country.According to Ooredoo Myanmar’s new CEO Rene Meza, who took over the helm in August this year, the company was “very close to signing a debt financing deal of up to $150mn” with the IFC.“The loan will contribute to financing the rollout of the company’s national 3G mobile network in Myanmar, as well as licence payment and operating expenses,” Meza told local newspaper Myanmar Times.At an earlier press conference, Meza said that Ooredoo so far invested more than $1.4bn since its local launch last year in Myanmar, at that time one of the world’s least connected countries. The company switched on its network with 602 towers and coverage of 30% of the population in August 2014. By the end of 2015, Ooredoo’s network in Myanmar is expected to cover more than 85% of the population. To date, Ooredoo has set up around 2,800 mobile phone towers across the country and targets to operate 3,000 towers by year-end. The plan is to reach 100% coverage until 2019. The company will also increase its fibre cable capacity from presently 5,000km to more than 12,000km, as well as double its points of sales from around 90,000 until next year, Meza said. Since its launch, Ooredoo Myanmar has grown to serve 5mn customers. The network already covers 13 of Myanmar’s 14 states and regions plus the capital Naypyitaw, and has created over 1,000 jobs, half of which have been filled by locals.Overall, Myanmar’s mobile phone penetration rate is now about 60% of the population. According to research by Deloitte Southeast Asia, the penetration rate was below 4% at the beginning of 2012.This, however, also means that competition on the Myanmar market is getting stiffer. The existing three mobile phone operators — besides Ooredoo Myanmar there are Norway’s Telenor and Myanmar Posts and Telecommunications (MPT), the existing, state-owned operator whose monopolistic rights ended last year — are already entangled in heavy price fights and marketing initiatives to entice customers  and broaden their reach. For example, Ooredoo Myanmar just has announced that it will provide universities, libraries and clinics in the country free Internet services and tablets “to the benefit of students and the public.”MPT has been recently joined by Japan’s telecom company KDDI and industry group Sumitomo to expand its network and improve its services. Telenor Myanmar, which launched one month after Ooredoo, claims to have reached 50%-population coverage as of now. The Norwegian firm, however, missed its own October 5 deadline last year to switch on its network in Myanmar’s commercial capital Yangon and was also beaten by Ooredoo in first entering Naypyitaw.Meanwhile, bids started for a fourth mobile phone licence for which reportedly no less than 17 companies are planning to create a joint consortium. Among them are local firms Yatanarpon Teleport and Elite Tech, as well as Vietnam’s Viettel Global and Thailand’s True Corp. While successful applicants were originally due to be revealed in September, Myanmar’s Ministry of Communication and IT has delayed issuing the licence, which will be valid for 15 years and is now expected to be awarded by the end of 2015.