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Sunday, April 14, 2024

Telenor slumps on Myanmar mobile phone deal

Investors didn’t seem to react well to news on Thursday that major Norwegian telecoms firm Telenor had succeeded in obtaining a license to provide mobile phone service in one of the world’s last mobile market frontiers, Myanmar (Burma). Telenor’s stock fell 1.4 percent on the Oslo Stock Exchange, and was only slightly recovering on Friday.

The shares slid all week and further on Thursday, possibly because of the investment obligations the deal places on Telenor, estimated at NOK 12 billion, and the political instability still tied to the country that is emerging from decades of harsh military rule. While many are optimistic about Myanmar’s future, uncertainty remains.

Newspaper Dagens Næringsliv (DN) reported that Telenor, which has expanded greatly in Asia, will need to use horses and wagons, river boats, motorcycles and possibly elephants to transport materials needed to build out Myanmar’s new mobile network. There is little existing infrastructure in the country, lots of untouched nature, dense jungle and often stifling temperatures and humidity.

Helicopters will also aid the construction, though, and Telenor, which won the license along with Ooredoo of Qatar, is prepared for a huge job ahead. “Myanmar is a large country with many mountains, rivers and valleys,” Telenor spokesman Tor Odland told DN. “There aren’t always roads and many areas don’t have electricity. Then we have to be creative in how we get equipment out where needed.”

Less than 10 percent of Myanmar’s population of 60 million have access to mobile phones. DN reported that Telenor, which earlier has pledged an eagerness to help “rebuild Burma,” is paying the government USD 500 million for its license to provide them, and expects to spend millions more before it gains a positive cash flow on operations. staff



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