Sigve Brekke, chief executive at the large Norwegian telecoms firm Telenor, has been part of its efforts to bring modern communications to Myanmar (and make money doing so) since the country seemed to be emerging from decades of military dictatorship. After months of a brutal and authoritarian backlash, during which the military has been killing its own citizens, Telenor announced Thursday it was selling its mobile phone operations in the country at a huge loss to a Lebanese investor group.
“This is a very difficult day for Telenor,” Brekke told newspaper Dagens Næringsliv (DN) Thursday morning. After investing more than NOK 5 billion in Myanmar, it’s selling out to the M1 Group for around NOK 900 million (USD 105 million).
“It has definitely not been easy for us to make this decision,” Brekke told DN. “We have evaluated many alternatives during the past several weeks. Out of consideration to our employees, the regulatory situation and in order to maintain good business practice, we’re choosing to sell, both for the employees on the ground and our customers in Myanmar.”
The country’s military elite launched a new coup last winter against elected officials after it had lost power in national elections. It once again seized power, a “state of emergency” was declared and the military re-arrested Nobel Laureate Aung San Suu Kyi, who had finally been able to collect her Nobel Peace Prize in Oslo after being released from many years of house arrest.
Now she’s back in custody at the orders of military leaders who refuse to give up their privileges of power. The country remains in a state of massive unrest amidst ongoing demonstrations. Several hundred people have been killed by military forces that overpower their protests.
It’s the worsening situation in the country on which Telenor based its decision to sell, the company stated in a report to stock markets Thursday. The company, which had achieved positive cash flow on its Myanmar operations and been able to distribute dividends of more than NOK 3 billion, will record a loss of NOK 1.2 billion on the sale.
“The situation in Myanmar has over the past months become increasingly challenging for Telenor,” the company stated, adding that it had gone through a “very thorough” process, evaluated several alternatives and spoken with many possible buyers. The agreement to sell to M1 Group “will ensure continued operations.”
Brekke thanked all employees and partners who had made “significant efforts” to build up a company that had an impact on the people of Myanmar and provided “state of the art” telecoms services. Operations began in 2014 and are now expected to continue under M1 Group “pending regulatory approvals.”
Asked whether he regretted going into Myanmar, he said Telenor wanted to “do good business and I believe we have done that and made a positive contribution.” It was nonetheless “a very sad day,” he said, because “it has been a good investment for us but we didn’t only want to do business but build up a society.”
The Norwegian government, which still owns a majority stake in Telenor, has also been active in efforts to bring democracy to Myanmar and improve human rights. It’s now back in the grip of wealthy military generals.