Telenor attracted to Myanmar

Telecommunications group Telenor has become the latest Norwegian company to eye Myanmar as a potential new market as the country emerges from years of military rule. Norwegian government officials and Telenor executives have recently visited the country, but remain worried about the levels of corruption.

Telenor's attempt to cash in on the mobile phone market in India is resulting in a legal quagmire and huge potential losses. PHOTO: Telenor

Telenor has been active in India and Bangladesh, and even though the company has run into major problems both places, it’s keen to start doing business in Myanmar, too. PHOTO: Telenor

Myanmar is rated as one of the world’s most corrupt countries, but many western companies are interested in doing business there, after economic sanctions have been lifted in response to democratic reforms. Myanmar is opening up for international companies, and Telenor has announced its interest in buying a license in the country. Norwegian state oil company Statoil is also interested in Myanmar as are several other Norwegian firms.

The Norwegian government agency Post and Telecommunications Authority (Post- og teletilsynet) has visited Myanmar twice recently to assist the country’s authorities in developing its telecommunications business, reports newspaper Aftenposten. The timing has prompted questions over whether Telenor’s initiative is an attempt to build Myanmar authorities’ trust.

Tor Odland, head of communications at Telenor Group, denied this. “Myanmar has been open to advice from international regulators of telecommunication and other country’s authorities,” he told Aftenposten. “Telenor’s contribution has been to provide advice based on experience about running mobile operations in Asia and in the Nordics.

“We are dependent upon stability and predictability in the development of their mobile network. This is the basis for a potential investment,” Odland said.

Halvard Leira, a researcher at Norwegian Institute of International Affairs (Norsk Utenrikspolitisk Institutt, Nupi), said it is fairly common that western countries contribute to building up states and that it cannot necessarily be linked to specific companies’ interests. “The timing may seem unusual, but it is not unheard of,” Leira told Aftenposten. “It’s possible to engage in corrupt countries in a non-corrupt way.”

Norway’s foreign minister, Espen Barth Eide, said the government’s involvement in Myanmar is similar to its engagement in other countries where Norway has provided guidance to develop different sectors, and said it probably would have contributed in Myanmar regardless of Telenor’s initiative. “It is natural that Telenor is interested in a solid framework in Myanmar. But Telenor has to compete on equal terms as all other companies,” he told Aftenposten.

Zero-tolerance’
Telenor fears the high level of corruption in Myanmar, though, and says it has “zero-tolerance’”when it comes to corruption. “It is therefore essential that a stable, regulatory framework is established before entering into potential investments,” Odland told the paper.

Telenor sees great potential in Myanmar and has estimated that only 1 percent of people in the country have a mobile phone, compared to 60 percent in neighboring Bangladesh. He said there is no reason why Myanmar should not develop in the same way.

Norway removed the last of its sanctions against Myanmar in April last year as a recognition that the former military dictatorship is on its way towards democracy and after Nobel Peace Prize winner and political prisoner Aung San Suu Kyi was allowed to enter an election.

Norway also announced this week that it would waive Myanmar’s NOK 3.2 billion (USD 582m) debt. “In many ways, we look at this process as a test of the country’s democratic principles,” Odland said.

Myanmar remains a “risk area,” Guro Slettemark, general secretary of Transparency International Norway, told newspaper Dagens Næringsliv (DN). “Businesses are facing major challenges, and we encourage them to be part of the solution and not the problem,” she said.

As one of the first western companies, Norwegian producer of paint, Jotun, opened an office and a shop in Myanmar in November last year.

Views and News from Norway/Aasa Christine Stoltz

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