7/29/2019 Investment Options for Local Telcos

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Investment options for local telcoAnne RenzenbrinkW ITn Myanmar 'stelecom industry shO\\ri.n gg of gradu ally openi ng. ope ra tors in Cam-bo dia's overcrowdeu telecommarket see opponwl ities forp l) ten tial investment .Bur ill stride with the a r k e t ' ~ latem po tential com e challenges , indust ry experts say. andlessons leam ed locaUy need tobeapplied overseas."Myanm ar rernainsone of thelast fi'on tiers and least touchedtelecom markets," said Antbony GalJiano, CEO ofCamboclianTnvestment Management. "Themobile market presents bothtremendo us opportunities andchallenges. Network and infrastructure development hasbeen severely lacking, pene tration levels are extremely low atless than 9 per cent, and there islittle or no competition."With a low penetration rateand a population of about 54million,Myanmar's telecom industry stands in stark contrastto that of Cambodia, where thenumber of SIM cards sold hasreached more than 20 m illionlast year, overtaking a pop ulation of about 15 million, acco rding to the Ministry of Postsand Te lecommunications.Acc ording to statistics fromCambodia-based Social Media Plus, Cambodians have, on

average, 1.3 mob ile subscriptions, and C,unbodia was thefirST COUlltry in the world withmo re mob ile phon es than fixedline pJl0nes.Accordil1g to MokhtarSahab , chie f com mercial oli t er at Bee line, the firm woul dn ot relocate to Myanmar andbel ieves m th e Cam bodianmarket , bu t a possibili ty wouldhe La extend [h e bus o ess."Myanmar has a mu ch biggerpopulation. so tha t is actually aqui te significan t oppo rtuni tyright there," he said.Tbe Myanmar govern men1has asked interested partJes losubmit an expression of inte r-est for t"vo nationwide te le-communication licences.According the Myanmar government , 91 entities sub mittedtheir expression of interest.One of them was AxiataGroup Berhad, the owner ofCambodian provider Hello."Like ma ny other tekos, wefeel it is a logical and interesting market to consider investing," Simon Perkins, CEO ofHello, said."It represents a strategic market given its high growth potential. HOVlrever, it is still an interesting time for the telecomsindus rry in Cambodia. We wi llfurther re-affiml our commilme nt , an d in tbe same time,increase our investmen t inthe Cambodia market to meetthe eVer increasing demands,"

A man speaks on a mobile phone in front of a Hello mobile service cent re in Phnom Penh's Chamkar mondistrict, HONG MENEABut with more than 90 will determine whether an op He also said the local margroups interested in licences erator can run a feasible and ket could provide a numberin Myanmar, it remains to be profitable business in the mar of lessons in what not to do in

seen whether any awardee ket," he said, :Another potential Myanmar. "One is the crowd-will see a favourable bu siness unknown w1l be localpartners. edness, tWl) is the price dumppropos it ion in the l 1 1 a r Gul It is likely the govemmt:nt will ing," he said.liano sa.d. "The ultimate cost pa rtner with some fo re ign op- Galliano also said Camboof the licences, the terms and erators, including the military." ilia is a market with a lesSDncondition s, the regulatory en According to Sahab, the po learn ed. "Too many licensesvi ronment. and h ow many ad litical situation in Myanmar is a were awarded, creating an overdi tional Ucences are awarded poten tial risk for operators ex- supply of operators, rC' lenrlcssin the short and medium term pandin g inlo tJlel'Ounl.ry. l'orn pC>lilioll , illIIl IIlti1llal .. ,

unsustainable buels. The mergers,nd acquisi tionsover the las t tWOtamen t ensuringance of number othe market," he saLocal telecomMfone, pa n uf

,group, fLied formonth. Cambile ope rators Smhave ann ounced

me rge in a $155the PoSt reported,alliano said hther consolidatiodia's mobile maris, the populatiosmall, the marketurated' and the faoperators to bumodels bere wilfurther entrants,""Most small tomarkets are btrolled by two totors, and that wi1the scenario plaThe opportunitiedo not have anwith potential nentering the maare already at capGalliano add ema r's potential dethe mobile markin g to foreign inresult in significathe cou ntry, withreet con tributionil l 11)(' W

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