First Thoughts on the New Rules for Licensing Telecommunications Services pg 3

Easy Money? Mobile Banking, Mobile Money and Myanmar’s Financial Regulations pg 6

Special Questions on Competition and Access to Infrastructure pg 11

How to Apply for a Telecom License? Analytical Table pg 13

First Thoughts on the New Rules for Licensing Telecommunications Services pg 3

Easy Money? Mobile Banking, Mobile Money and Myanmar’s Financial Regulations pg 6

Special Questions on Competition and Access to Infrastructure pg 11

How to Apply for a Telecom License? Analytical Table pg 13

Can a Bank Choose Only One Mobile Operator as a Partner? pg 17

No Portability of Numbers (yet) pg 18

Only Cost-oriented Fees for Sharing Poles and Radio Towers? pg 18

Also featured:

TELECOM MYANMAR UPDATE

15 September 2014

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VDB Loi in Myanmar

Partners

VDB Loi Myanmar, a leading Myanmar legal and tax advisory firm, employs over 40 lawyers and advisors in Yangon and it’s fully operational office in Nay Pyi Taw. The firm is a leader in foreign investment, M&A, telecommunications, energy, taxation, and real estate/infrastructure. Our experience includes a multibillion dollar telecom investment, the Thilawa Special Economic Zone, Hanthawaddy International Airport, the privatization of 3 SOEs, a US$400M mixed-use real estate development and assistance to 3 of the oil and gas supermajors.

Ranked as a Tier 1 law firm in Myanmar (IFLR) and awarded for its M&A achievements (Finance Monthly “M&A Law Firm of the Year-Myanmar”, Dealmakers “Myanmar Best M&A Law Firm”, Acquisition International “Leading Advisor 2013-Myanmar”), VDB Loi is widely recognized for its transactional experience.

Edwin VanderbruggenPartnerEdwin@vdb-loi.com

Edwin Vanderbruggen is VDB Loi’s partner responsible for Myanmar. Formerly with Loyens & Loeff and a partner at DFDL, Edwin lives full-time in Yangon, where he leads a team of approximately 40 lawyers and advisors. He has advised three of the “supermajors” on their oil and gas projects in Myanmar, advised on the structuring of the Thilawa SEZ and the construction of a 500MW power plant, assisted a number of multinational telecoms in relation to Myanmar’s recent tender, and currently acts for one of the licensed telecom operators on the licensing of a multibillion telecommunications network.

Jean LoiManaging PartnerJean@vdb-loi.com

Jean Loi is widely recognized as one of the regions most experienced professional advisors with a CPA background. She was formerly a partner with PricewaterhouseCoopers in Southeast Asia. As the managing partner of VDB Loi, Jean has extensive experience with licensing, energy, power, property and consumer product projects. Her Myanmar tax experience is unsurpassed. She lives in Yangon.

Our offices in Myanmar

YANGONLevel 8, Centrepoint Towers, No. 65 Sule Pagoda Road & Merchant Street, Kyauktada Township

NAY PYI TAWNo. S-204, Tha Pyay Kone Ward, Zabu Thiri Township

On Yaza Thingaha Road, driving from Junction Mall to the Gem Museum, look for signage on the right directing you to our office

Offices in the region

Emerging markets are special.So, we rethought the law firm.

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At the end of 2013, the Post and Telecommunications Department (PTD) of the Ministry of Communication and Information Technology (MCIT) released a comprehensive set of proposed rules for public comment meant to implement major portions of the new Law. We now expect these congwaited rules to come into face very shortly.

The “Proposed Rules”, which total several hundred pages, cover licensing, interconnection, spectrum use, numbering, and competition. The MCIT received feedback from the public (including VDB

FIRST THOUGHTS ON THE NEW RULES FORLICENSING TELECOMMUNICATIONS SERVICES

Loi) on the new rules before finalizing the current drafts. The full text of the Proposed Rules for the Telecommunications Sector relating to Licensing, Access and Interconnection, Spectrum, Numbering, and Competition can be downloaded from http://www.vdb-loi.com/vdb/analysis/proposed- telecommunication-rules-on-licensing-interconnection-spectrum-numbering-and-competition-in-myanmar-full-text-download/.

Here is a preliminary look at some of the issues we’ve found noteworthy so far.

MEET OUR TEAM

The general system of licenses under the Proposed Rules

There are three types of licenses, notably: the Network Facilities Service (which is subdivided into Individual and Class licenses – NFS-I and NFS-C), the Network Service (NS) and the Application Service (AS) licenses. Actually, it is better to count the NFS-I and NFS-C as if they were separate altogether, because an NSF-C license does not allow a licensee to provide telecommunications services, but only to

construct and hold passive infrastructure and lease it to an operator.

Besides these licenses, other authorizations exist as well under the Proposed Rules, such as the “Equipment License” (see below), approval for the use of spectrum (which is not included in the NFS-I or the NS license) and authorizations for numbering.

Helen Sullivan-LooneySENIOR LEGAL ASSOCIATE, Yangon

Helen is a qualified attorney with a master’s degree in international law and has worked in the legal field for the past 11 years. Her practice focuses on investment, corporate and commercial law. She lives in Yangon

Nar WahSENIOR LEGAL ASSOCIATE, Nay Pyi Taw

Nar Wah, a Myanmar-qualified lawyer, is an associate on VDB Loi‘s legal team. She has an exceptional educational and career background in both law and accounting. She spent more than seven years working in Singapore.

Aung Soe MoeSENIOR LEGAL ASSOCIATEYangon

Aung is an experienced Myanmar qualified attorney with a Bachelor’s of Law degree from Dagon University. He has unique and extensive experience in telecommunications, land and licensing issues in Myanmar.

MIC PERMITS 1/1/2013 – 31/3/2014

Source: Myanmar Investment Commision

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Licenses for tower companies are obtained simply through a registration, but based on which conditions?

The Proposed Rules specify that companies seeking to construct and hold passive telecommunications infrastructure to lease it to operators will not need a long and complex licensing process. The Consultation Document accompanying the Proposed Licensing Rules provides that “[the relevant] licenses are subject to a registration-only process to encourage widespread provision of new services and faster deployment of passive infrastructure”. Other licenses, the document continues, would be subject to a more stringent application and approval process, on the basis that they involve a higher degree of technical and financial capability.

Companies wishing to construct, hold and lease out passive infrastructure to operators must obtain an NFS-C license. As the Proposed Licensing Rules state, “[a]n NFS(C) License authorizes the Licensee to construct, deploy and maintain passive Telecommunications Network infrastructure and to lease such infrastructure to an NFS(I) Licensees […]” (s. 16 b Proposed Licensing Rules). This provision refers to the passive network infrastructure for civil engineering and non- electronic elements, such as towers,

The Proposed Rules reflect the four licenses, and the processes for obtaining the licenses differ. More precisely, the application process for NFS-I and NS licenses is more complicated than that for AS and NFS-C licenses. For AS and

masts, ducts, trenches, poles, and dark fiber, which are all mentioned as illustrations in the Proposed Licensing Rules (s. 16 c).

From the Proposed Licensing Rules it appears that for this activity there is no evaluation process within the MCIT. That is to say, any company which applies will receive the NFS-C license, as long as the requirements stated in the registration form are indeed met. And that is where the trail ends. There is no registration form yet, so we are not able to determine which conditions will apply. It may be that a contract with an operator is a requirement, or that local ownership is a requirement on the form. It seems the MCIT is still mulling over its options in this regard.

It is not entirely clear whether the MCIT registration is done before or after the MIC application process is started. We think you can start the MIC process first, which would be the smarter tactical move in our view. Since there is no tough evaluation process with the MCIT for NFS- Cs, we can argue there is no reason why the MIC can’t take the application in, which is half the battle in practice.

Access to land for licensed operators and tower companies

NFS-C licenses, it appears that only a registration is required.

The evaluation process periods are similar to the Myanmar Investment Commission (MIC) evaluation periods

(up to 90 days, but in practice we can get this down to 60 days from the time of submission of a complete application). We think the MIC will not accept applications and will refer to the MCIT for the NFS-I and the NS licenses.

LEASING LAND FOR NETWORK INFRASTRUCTURE

Type of Land: Freehold Grant Permit/License Farm/Garden

Leased Vacant, fallow, virgin

Monastery

Located? Cities, towns Mostly cities and near towns

Villages, towns, rural areas

Mostly in villages Mostly cities and near towns

Mostly in towns Urban and rural areas

Permitted use? Any lawful use Any lawful use Agriculture: cultivation only

Nonagriculture: residential use or as stated in permit

Farm: paddies

Garden: any other crop

As stated in the lease, e.g. residential construction

Agriculture; livestock; mining; as permitted by relevant Central Committee

Religious uses only

Change of purpose needed?

No No(Need regional/local approval (e.g. YCDC) to build tower)

Yes(Must be converted to Grant land to build tower. Landholder must pay registration fee and land tax)

Yes(Need Form 15 to change land’s purpose. Land tax receipt required)

No (May need Government approval to amend lease)

Yes(MIC approval required for foreigners and relevant Ministry approval)

Yes(But Cabinet rarely grants)

Can landholder lease or sublease?

Yes Yes Yes, with local authority’s approval

Yes, with Form 7 and Government permission

Yes, with lessor approval. May need to amend lease

Yes, but only with Cabinet permission

No

The Proposed Licensing Rules address some land use issues for licensees in the NFS-I and NFS-C categories (the only licenses that include facilities). However, there is actually less detail offered than in Chapter XIII of the Telecommunications Law itself. The Proposed Rules merely restate the principle that an NFS-I licensee or NFS-C licensee may enter private property for the purpose of installing or repairing network facilities.

Interestingly, the Proposed Licensing Rules do address the messy rights-of-way issues facing companies aiming to lease land for telecommunications infrastructure purposes. In a special section, it is stated that “an NFS(I) Licensee or NFS(C) Licensee may gain access to public rights-of-way where necessary and practicable. Before doing so, the Licensee shall obtain any approval required by law” (s. 33 Proposed Licensing Rules). The Rules go on to specify that the licensee may ask the MCIT for assistance, but it does not say what assistance, if any, will be forthcoming.

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Furthermore, the licensee is supposed to notify the MCIT if it needs public rights-of-way, which is yet one more regulatory requirement. The same provision states that the licensee shall take all reasonable measures to avoid causing injury to any person or damage to public property and shall minimize any obstruction to public travel on roads, railway, waterways, and by air.

We note that where a company leases or purchases land, the Transfer of Property Act of 1882 provides that the transfer of the land will include the easements annexed to the land, as they are “legal objects” of the land (s. 8). This provision is reflected in the practice of the local authorities.

For example, a person seeking to sell land in Yangon must apply to the Yangon City Development Committee (YCDC) for a historical map of the land. An YCDC officer then examines and surveys the land, including any easement, and issues to the seller a historical map that includes the easement (or right of way). The buyer then receives the land that is indicated on the historical map, including any easements or rights of way.

There may be more network service licenses

The Proposed Rules state explicitly that, as a principle, NFS-I licenses and NS licenses shall be issued on a non-exclusive basis. They are not limited. The Proposed Rules state that “there shall be no pre-determined number of these Licenses”. They also state that any decision to limit the number of licenses issued shall be based on justifiable reasons, such as scarce resource constraints. A decision to limit the number of NFS- I or NS licenses shall be subject to public consultation” (s. 10, Proposed Licensing Rules).

Renewal of a license: no discretion by the Government

Remarkably, the Proposed Rules confirm that when a license is up for renewal, which must be applied for by the licensee, the MCIT does not have full discretion as to whether or not to renew. In fact, the renewal must be granted unless the licensee has not complied with applicable laws and regulations: “the Department shall renew the relevant License on the same or substantially similar terms, and for the same duration as the initial License period, if the Licensee has substantially complied with: (i) The Telecommunications Law; (ii) all applicable legislation, rules, regulations and (iii) the terms contained in the License” (emphasis added).

The MPT will need to publically issue terms for interconnection

The Proposed Rules impose an obligation upon operators to interconnect. In addition, the so- called dominant operator, which would have to be the MPT initially, has an obligation to issue a Reference Interconnection Offer (RIO) with standard terms and conditions under which it is prepared to interconnect. The RIO must also be posted on the dominant operator’s website. According to the Proposed Rules, this will speed up negotiations and prevent discriminatory treatment in the application of interconnection rates.

The MPT can be required to share infrastructure quicker than other operators

The Proposed Interconnection Rules state that any operator may request any other operator to share infrastructure, but there would not be any obligation for the other operator to agree. However, the PTD may direct one or more operators to share infrastructure. To do so, the PTD must first go through a public consultation process. In addition, there is a requirement that such directive can only be issued for infrastructure which, in the view of the Regulator, cannot be efficiently replicated by other licensees. Directives destined for the dominant operator are not subject to these restrictions.

In other words, the PTD can require the MPT to share infrastructure with other operators without the need for a consultation process, and even if the infrastructure in question can also efficiently be replicated by those other operators. However, the other operators cannot require the MPT to give access to its infrastructure unless the PTD agrees to direct the MPT to do so.

Interconnection and infrastructure sharing fees are based on cost, but not really

Unlike an earlier draft of the Telecommunications Law, the enacted text does not explicitly state that fees for interconnection and access to infrastructure or services must be charged on a cost basis. The Proposed Rules do pick up that idea, but it has been watered down. Section 9 of the Proposed Interconnection Rules now states that “rates for Interconnection services shall be cost-oriented and set to allow the Qualifying Licensee providing the service to recover its costs of providing the service together with a reasonable return on its capital employed”. The term “reasonable return” is not further defined.

The Consultation Document notes on the subject that “retail minus” and “cost based pricing” might alternatively be employed (Part III, par. 28). The retail minus method would certainly lead to an element of profit being introduced into the equation.

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EASY MONEY? MOBILE BANKING, MOBILE MONEY AND MYANMAR’S FINANCIAL REGULATIONS

MEET OUR TEAMBy all accounts, there are two sectors of industry that are poised for extraordinary growth in Myanmar: telecommunications and financial services. One can only imagine how exciting the prospects might be for the overlap between the two: mobile financial services.

The liberalization of the telecommunications market in under-banked Myanmar, the forthcoming opening of the financial services sector to foreign banks and the rise of micro- finance investment set the stage for a stellar rise of electronic money. Paying for groceries with a wave of a NFC-equipped phone or an SMS, sending some cash to

Bank-led or non-bank model?

There are different ways how one can use a mobile phone to do a financial transaction. One of the fundamental questions is to which degree a bank is, or legally has to be, involved in the process.

From our perspective it is the simplest to distinguish between the non-bank model and the bank-led model. In the non-bank model, there is no direct transaction between the person using the service and a bank.

For example, in Vodaphone’s M-PESA system, the Kenyan success story which is the poster boy for the non-bank model, subscribers of the mobile operator can pay just about anyone with a PIN number. A retailer displays his payee account next to the cash register. The customer can basically

just use his pre-paid mobile card to pay to that account. In the bank-led model, such as Barclay’s “Pingit” in the United Kingdom, a customer of Barclay’s can use his mobile phone on any network to make a payment or withdraw money.

Each model, at least in its simplest form, comes with its own restrictions. In the bank-led model, you need to become a customer of the bank to use the service but the service is open to the subscribers of all mobile operators. In the non-bank model the user does not need an actual account with any particular bank in his own name, but he and most often the people he wants to purchase from have to be subscribers. The dominant brand in the bank- led model is that of the bank, while in the non- bank model the dominant brand is the telecom

a relative in another region or receiving one’s Government pension per mobile bank account may soon become a part of every-day life in Myanmar.

But none of this is going to happen without proper regulation. In this client briefing note we explore how Myanmar has begun, for the first time, to regulate mobile banking with the Central Bank’s Directive 4-2013 of 3 December 2013 (the Mobile Banking Directive). We consider the implications of that landmark regulation. Furthermore, we touch upon the other main Myanmar laws and regulations which will play a major role as Myanmar moves into the realm of financial inclusion.

Natalie MatrangaSENIOR LEGAL ASSOCIATE,Yangon

Nishant ChoudharySENIOR LEGAL ASSOCIATE

Divyasree DamarajuLEGAL ASSOCIATE, Yangon

Natalie Matranga is a solicitor qualified in England and Wales with 10 year experience in private practice in the United Kingdom and an additional 3 years working in Asia in the international litigation sphere.

Nishant is an experienced lawyer qualified in India with an extensive background in finance and securities. He assists finance institutions navigate the emerging regulatory framework of foreign and secured lending in Myanmar. Nishant also advises on corporate M&A and restructuring in a wide range of industries.

A qualified company secretary, Divya leads a team of compliance professionals to assist clients with all corporate matters such as incorporations, preparing and maintaining statutory books and registers, and all corporate filings.

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Would a semi-closed system also have to be bank-led?

operator or a specialized non-bank mobile money company.

Put another way, the fundamental question which regulation needs to address is whether a mobile operator will be allowed to use the top- up credit for things that have nothing to do with making calls and that involve transferring money. Some would call this allowing the mobile operators to carry out financial services, particularly if one can “cash out” the credit again, or even earn an interest. That is the essence of the regulatory weak spot of the non-bank model: most countries only allow banks or other regulated financial institutions to perform financial services. In countries where the non-bank model is used, special precautions are taken to make sure that the mobile operators are not deemed to perform financial services in the sense of their laws and regulations.

The Myanmar Directive chooses for the bank-led model, but other models will be allowed as well

In Myanmar, in following of examples in India and particularly Bangladesh, the Mobile Banking Directive concerns mobile banking system that follows the bank-led model. The role of the mobile operator in the Mobile Banking Directive is, the way the Central Bank of Myanmar (CBM) sees it for the moment, that of an “agent or a partner” to the bank who can sign up customers for the service, whose branches can be cash-in and cash out withdrawals. Nevertheless, it is the bank who carries out the remittances, and it is the bank who contracts with the customer. Others, including technical service providers, financial service providers and of course mobile network operators can be appointed as agents of such bank in relation to mobile banking.

The Mobile Banking Directive states that “mobile banking services shall be run using a bank-led model” (s. 3 Mobile Banking Directive) and that operations can commence “only when the permission of the Central Bank has been obtained” (s.4 Mobile Banking Directive). The Mobile Banking Directive lists the scope of financial services which can be carried out by means of mobile banking (see below), and this list of services, the Mobile Banking Directive continues, “shall be run by a bank-led model”.

That does not mean that non-bank led e-money systems will not be allowed. CBM drective on dedicated e-money issues (DEMI directive) governs a model where a credit can be used for payments or can be redeemed.

Say that a mobile operator concludes an agreement with a movie-theatre chain so that a movie ticket can be purchased online with pre- paid mobile credits. Can a mobile operator, or for that matter any non-bank undertake such a scheme without a bank in Myanmar?

Myanmar’s Mobile Banking Directive does not explicitly address such systems where, for example, pre-paid mobile credits can only be used to pay a few suppliers (semi-closed). This is more the field of application of the DEMI Drirective.

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Which transactions are allowed through mobile banking in Myanmar?

The Mobile Banking Directive lists a number of activities which banks and financial institutions may undertake through mobile banking, provided they receive permission from the CBM. This list is the following:

(a) Domestic remittance and remittance from other countries;

(b) Cash-in and cash-out in MMK through agents, bank branches, ATMs, or branches of a mobile operator;

(c) Payments made to a business by individuals (e.g., payments of bills and payments for goods and services);

(d) Payments made by a business to individuals (e.g. salary, dividend)

(e) Payments made to individuals by the Government (e.g., salaries and wages, pensions and other allowances);

(f ) Payments made to the Government by individuals (e.g., taxes);

(g) Payments between individuals (e.g., payments and transfers of money between bank accounts);

(h) Microfinance, overdraft and other small payments like insurance premium.

There is a limit of 500,000 MMK (about 500US$) on the amount that can be transferred by means on mobile banking. In addition, no more than 3 payments may be made per day. Nevertheless, the maximum amount per day is 1,000,000 MMK (about 1,000 US$).

It is also provided that mobile accounts which are savings accounts are interest bearing in accordance with the CBM regulations.

Liability for loss and damage under Myanmar law

From the CBM’s perspective the bank is liable for losses caused by its agents. The Mobile Banking Directive provides in s. 22 that:

“banks and financial institutions shall take responsibility for the losses of customers that occur as the result of inappropriate actions of their branches, cashpoints, agents and partners”.

Presumably, s. 22 Mobile Banking Directive is meant to displace the freedom to contract between the bank and his agent, and the consumer. In other words, in view of protecting the consumer, the consumer and the bank cannot agree that the bank will not be liable for losses resulting from certain acts of the agent.

But, it is unlikely that all liabilities will end up with the bank. It is safe to say that the contractual framework between the bank and its agents will require careful preparation. The issue of liability for losses (both losses to the bank and losses incurred by third parties) is likely to become one of mobile banking’s hot potatoes. It remains to be seen how s. 22 Mobile Banking Directive must be read in conjunction with Myanmar law in general. For example, the Myanmar Contract Act also provides rules with respect to the liability of agents. The authority the agent has under the agreement with the bank will be very important with respect to any potential liability towards third parties.

Cashpoints, agents and partners

Quite few provisions in the Mobile Banking Directive are dedicated to the selection and monitoring of the cashpoints, agents and partners that the banks can use for mobile banking.

There is no exhaustive list of who can act in any of these capacities. Mobile operators, NGOs, and Government post offices are mentioned by name as possible cashpoints. Presumably, any person that meets the qualitative criteria can be an agent or a partner (s. 11 Mobile Banking Directive)

When selecting a partner or agent to collaborate with, banks and financial institutions shall base their selection on the following items:

(a) Ability to implement the work;

(b) Financial stability;

(c) Good reputation within its field of business;

(d) Measures taken for monetary security, inspection of accounts, reporting and supervision.

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Anti-money laundering and KYC

In a bank-led model, it is not surprising that the banks must exercise the normally applicable anti-money laundering (AML) measures. After all, the user just opens a (mobile) bank account. A KYC form, which is identical to the one used in Bangladesh, is provided as an annex to the Mobile Banking Directive. The bank is liable for the accuracy of the information, also when the forms are completed by their cashpoints, agents or partners.

In addition, banks need to use IT systems which allow the identification of suspicious activity, which must be reported.

It is interesting to note that most of the technical specifications in the Bangladesh regulations, general as they were, were not taken over in the Myanmar Mobile Banking Directive.

What is the role of micro-finance institutions (MFI) in the Mobile Banking Directive?

The Mobile Banking Directive states that “microfinance” is one of the financial services which may be carried out by means of mobile banking. MFIs can certainly be agents and partners of banks in a bank-led model, which is suggested with the reference to “Non- Governmental Organizations having a network across the country” in s. 10 of the Mobile Banking Directive. For the moment, it is not entirely clear from the text of the regulation if a Micro-Finance Institution (MFI) can actually replace the role of a bank in the bank-led model in Myanmar. We are in discussions with the CBM to clarify the policy.

In the future, from a Myanmar legal perspective there is no reason why an MFI cannot replace the role of the bank in a bank-led mobile banking system. After all, under Myanmar’s Microfinance Law, an MFI can be permitted to carry out financial remittances and take deposits. The MFL notes the following five activities as constituting microfinance: (1) extending micro-credit, (2) accepting deposits, (3) carry out remittances, (4) borrow domestically and from abroad, and (5) carry out other financial activities. Per directive no.2/2011 issued by the Committee, at this time, only the first two activities may be performed.

Required steps before a bank can be licensed to provide mobile banking

The CBM considers mobile banking, as envisaged in the Mobile Banking Directive, to be an “other financial service” as referred to in s. 25 (o) Financial Institutions of Myanmar Law. As such, a bank can only commence with this service after having been specifically licensed to do so.

In order to receive the license the bank would have prepare a plan for mobile banking which is to be reviewed by the CBM. The bank must also select agents and partners, sign agreements with them, and submit a list to the CBM which is updated monthly. It is unclear if the list of agents must be ready before applying for the license.

In practice, one of the more detailed points of inquiry of the CBM is the safety of the mobile banking technology. The CBM will request detailed information on the hardware, the safety protocols, the integrity of the transmissions that are being processed and authorizations.

In certain other countries where mobile banking and mobile wallets have been introduced, the strength of the network in certain areas showed to be a problem. In Afghanistan, for example, the network is not always reliable. If the connection cannot be established when a payment processed, the integrity of the data cannot be assured.

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Consumer protection laws

The Mobile Banking Directive does not state so, but it goes without saying that the Consumer Protection Act of 14 March 2014 (CPA) also applies to mobile banking. The CPA provides in a number of rights of consumers and restrictions for businesses. We think a few of those provisions are of particular interest when it comes to mobile banking. For example, the CPA specifies that businesses may not advertise or offer services that are actually not available, which raises some questions with respect to the performance of the networks and platforms needed to operate mobile banking.

What can we expect in Myanmar in the next few months in terms of mobile banking?

It is fair to say that the recent surge of negotiations and vying for position is likely to continue for quite a while. We think that a number of banks will secure the CBM license. The Mobile Banking Directive has created some degree of regulatory certainty, at least for the bank-led model. But a successful mobile banking operation needs more than just a bank. Banks,

operators, MFIs, payment service providers, device suppliers, software providers, distributors and retailers will try to secure an advantageous position on the ground. And for some market actors that means, among other things, the widest possible network of agents and partners. Certainly possibilities are greatly enlarged with the DEMI Directive.

We also expect that the regulatory framework as it stands today will almost certainly be subject to further change sooner rather than later. Experience in other countries such as India and Bangladesh demonstrates the need for frequent adjustments. As the regulator builds up experience, we think they may relax some of the current restrictions such as the 3 transaction per day limit.

Another example is the requirement for a receipt for the performance of a service (s. 7 a CPA), which obviously raises a number of questions with respect to the nature of a “receipt” in case of a service with is processed electronically.

More specifically, under the Mobile Banking Directive the bank has to build in a few minimum protections for users, such as:

• There must be a dispute resolution system with the users. It is in this respect noteworthy that consumers

also have a statutory right of access to the Consumer Dispute Settlement Committee under the CPA

• Any risks must be clearly informed to users before signing up for the service

• There must be a grievance and compensation policy

• Fees must be approved by the CBM

• The ICT system supporting mobile banking must be secure

• Banks must use at least one security protocol (PIN numbers) and the system must be able to stop access for stolen or lost PINs

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As an entirely new competitive landscape emerges in Myanmar, and as a wide range of network assets is being deployed, a number of new legal issues will centainly emerge. Questions on competition and access will become central points of attention in newly wired Myanmar. In this contribution, we look into some of the pressing Myanmar legal aspects based on the new telecom rules (the published Proposed Competition and Access Rules).

SPECIAL QUESTIONS ON COMPETITION AND ACCESS TO INFRASTRUCTURE

Chen XiLEGAL ASSOCIATE, Yangon

Chris SheridanLEGAL ASSOCIATE, Yangon

Kap Sian SiamLEGAL ASSOCIATE, Yangon

Xi is a Chinese-qualified lawyer who graduated from Peking University’s prestigious school of law. She has a master’s degree in corporate and financial service law from the National University of Singapore. A fluent Japanese speaker, she spent 3 years with Mori Hamada & Matsumoto. She is an associate in our legal team focusing on investment and real estate.

A barrister and a solicitor admitted in Australia, Chris has a solid background in commercial practice for a wide range of sectors including financial services, resources and finance. At VDB Loi, Chris advises foreign investors on commercial and corporate law, M&A, real estate law and dispute resolution.

Kapsian is an experienced Myanmar qualified attorney with a Bachelor’s of Law degree, formerly working with Rajah & Tann LLP. He has extensive experience in commercial, land and licensing issues in Myanmar.

Some aspects of the anti-competition rules might be too restrictive to be practical

The PTD has put a lot of effort into creating a comprehensive set of rules to ensure that the market can develop in an open and competitive manner. Conduct and agreements that lessen competition may be challenged by the Regulator, and trigger penalties.For example, failing to provide interconnection, preemptively securing scarce facilities to prevent others from using them, or using different rates for services to licensees may be deemed anti-competitive. Agreemetns between licensees or between a licensee and a non-licensee are prohibited insofar as the agreement has “the object or effect of significantly preventing, restricting or distorting competition in any relevant telecommunicaions market”. There are fare-reaching rules on having to provide interconnection and access to infrastructure to other licensees. In a market,where there is only one dominant player, the new entrants need sules to make sure the dominant player does not pull the sheet too far to his own side. So, these rules are actually necessary.

The question is whether the target has been overshot. First of all, in terms of who is subject to the Rules. Depanding on the obligation, the Competition Rules extend

to every licensee, not just to a dominant licensee.

The definition of a dominant licensee is fact-based , but the PTD can deem anyone a dominant licensee who has a 30% market share of any “relevant market”. By Comparison, the competition rules of the WTO Reference Paper on Telecommunications Service (the WTO Reference Paper) applies only to “major suppliers”,which mean suppliers who have the ability to materially affect the terms of paricipation(with regard to price and supply) in the relevent market for basic telecommunications services as a result of:(a) control over essential facilities; or (b) use of is position in the market( Definitions and Section 1.1). The EU Access Directive similarly , imposes access obligations only to operators “ with significant market power” ( See art.6 of Directive 97/33/EC of 30 June 1997 (OJ 1997 L 199 and Directive 2002/19/EC of 7 March 2002 (OJL 108/7) which clarifies Directive 97/33’s obligations on dominant players).

Secondly, licensees of all classes are held of the same Competition Rules.Extensive regulation may very well be appropriate

MEET OUR TEAM

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for operators, but all other licensees such as tower companies, direcotry providers and internet service providers must abide by the same rules. Particularly small and medium-sized enterprises in Myanmar may find it difficult and perhaps costly to assure compliance. The definition of “telecommunications services” in the Rules encompasses all activity which is subject to any of the different licenses, thus including infrastructure providers and providers of value-added services. In WTO law, the GATS Annes on Telecommunications defines the scope much narrower, limiting “telecommunications” to “transmission and reception of signals by electromagnetic means” ( Section3(a) GATS Annex on Telecommunications).

Finally, it is important to note that sometimes even non-licensees can be caught in the web of the Competition Rules. Any non-licensee who is a party ot a transaction involving a licensee could technically be subject to penalties if the transaction is determined to be anti-competitive. Building owners, vendors or other non-licensee businesses who interact exclusively with one or several licensees would have to interpret their business in the context of the COmpetititon Rules.

Can the operators only hold two price promotions per year?

Operators need to have their price tariff for voice services pre-approved by the regulator, the PTD. This tariff may not be below the cost price of the operator, where the cost price is calculated using certain standards that are internationally recognized in the telecom sector, i.e., the Long-Run Average Incremental Cost (LRAIC) model,although operators will probably be in need of more guidance as there exist different versions of LRAIC. Twice a year, that cost tariff may be exceeded for promotions. That is to say, there must be 180 days between substantially similar promotions. The definition of substantially similar is in itself quite broad, so broad as to encompass

nearly any kind of price reduction. If it suffices for a promotion to include a price reduction to be “substantially similar” to another promotion, operators indeed end up with a maximum of only two promotions per year.

As any keen observer knows, price promotions are at the center of any subscriber growth strategy. Consumers in Indonesia, Thailand and Cambodia cen testify to that. Limiting the number of promotions , if that is indeed how the Rules would be interpreted, might be seen as an undue burden on new entrants to the market.

The missed opportunity of tackling the land use issue

The Proposed licensing Rules address some land use issues for licensees in the NFS(I)and NFS(C) categories(the only licenses that include facilities). However, there is actually less detail offered than in Chapter XIII of the Telecommunications Law itself.The Rules merely restate the principle that an NFS(I)licensee or NFS(C) licensee may enter private property for the purpose of installing or repairing network facilities. Given the problems that operators and tower companies are facing in practice,that is a bit of a disappointment, which hopefully can be put right after that public consultation phase.

Ideally, the Rules would tackle the thorny land use classification

problem head on. Drastically summarizing we think there are at least six main areas where the Rules could make an impact:

1. The Rules can provide that state/regional and municipal land authorities can identify land rights holders to NFS(1) and NFS (C) licensees or their representatives for the purpose of facilitating installation of passive infrastructure.

2. The Rules can provide that state/regional and municipal land authorities can cooperate with land rights holders and with NFS(1) and NFC(C) licensees to remedy imcomplete land right documentation or irregularities.

3. The Rules can provide that no change or reclassification of use or purpose of land (for example from agricultural

use to other purposes) is needed when passive infrastructure is installed on a limited space on a land parcel.

4. The Rules can provide measures to centralize and simplify the process for the registration of leases.

5. The Rules can provide measures to centralize and simplify the process for the application and evaluation of construction permits and operating permits of passive telecommunications infrastructure.

6. The Rules could create a central office within the PTD with nationwide authority to coordinate and resolve land issues, and issues related to the construction and operation of passive telecommunications infrastructure.

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Our thoughts

� Details of current and previous licenses held must be disclosed. No minimum experience requirement is stipulated.

� Parent company must be disclosed, along with details of three directors or officers of the parent company. No option to enter details of affiliate of operator instead of parent company.

� Must disclose details of telecommunications licenses held in other jurisdictions

� Minimum capital MMK 25,000,000

� No reference to a requirement for a contract with a Licensed Operator

� Documents to be provided:

- Cover letter on registering entity’s letterhead

- Registration form with the following attachments (where applicable) signed by a director:

i. additional responses to requests for further information

ii. company registration certificate

iii. MOA/AOA

- Certificate of paid up capital for NFS-C License applications

- Banker’s draft for relevant amount of paid up capital

Application to PTD (within 90 days of issuing

telecom rules)

Pay a registration fee of 2,500,000 Kyats*

(approximately US$2550)* Fee is 5,000,000 if applying for both NFS-C

and AC Licenses

Wait 30 days for “decision”(90 in case queries)

Registration active from time of application

NFS-C & AS LICENSE

Our thoughts

� More stringent than registration process for NFS-C/ NS Licenses

� Details of current and previous licenses held must be disclosed. No minimum experience requirement is stipulated.

� Parent company must be disclosed (if any), along with details of each director/ officer of the parent company and details of all shareholders with 15%+ interest. No option to enter details of affiliate of operator instead of parent company.

� Must disclose details other licenses applied for in MM (including unsuccessful applications) and details of telecommunications licenses held in other jurisdictions

� Minimum capital MMK 100,000,000 NFS-I/ 50,000,000 NS

� No reference to a requirement for a contract with a Licensed Operator

� Documents to be provided:

- Cover letter on registering entity’s letterhead

- Any responses to requests for additional information

- Company registration certificate

- MOA/ AOA

- Technical plan

- Certificate of paid up capital

- Business plan

- Financial plan

- Audited accounts (4 copies)

- Bankers draft with relevant fee

Application to PTD (within 90 days of issuing

telecom rules)

Pay a registration fee of 5,000,000 MMK for NS

License or 10,000,000 for NFS-I License

Wait 60 days for “decision”(Dept. will notify if any delay

if expected to exceed 60 days)

Registration active from time of application

NFS-I & NS LICENSE

HOW TO APPLY A TELECOM LICENSE?

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LICENSE NFS-I NS NFS-C AS1 Purpose/

authorized activities

� Provide any public or private telecommunications services (international or national) to the public and/or other licensees

� Construct, maintain and operate a network

� Lease all or part of a network to another licensee

� An NFS-I licensee is licensed to perform all NS, NFS-C and AS activities

� Lease transmission capacity from NFS-I licensee and/or other licensee to provide telecommunication services (international or national) to end users and/or other licensees

� Provide all services authorized by NS and AS licenses

� NS licensees cannot construct, maintain or operate networks, except for switches, routers and processing equipment needed for the licensed services

� Construct, maintain and lease passive infrastructure to an NFS-I and/or construct, deploy and maintain a telecommunications network solely for the self-provision of telecommunications

� NFS-C licensees cannot provide interconnection with networks, whether public or private; or closed user group telecommunications services that are offered to any person

� Provide telecommunications application services without the need for a subscriber number, such as Internet Service Provider (ISP)

� Lease transmission capacity directly from an NFS-I licensee and/or other licensee in order to provide public and private telecommunications service on a national basis to end users and/or to another licensee

� AS licensees cannot construct, maintain or operate networks, except for switches, routers and processing equipment needed for the licensed services

2 Examples of activities

Construct, maintain, operate, and provide telecommunications services over:

� Terrestrial fixed line transmission facilities

� Terrestrial radio transmission facilities

� Mobile base station facilities

� Submarine cable facilities

� International Gateway Services facilities

� Satellite earth station facilities

� Other Myanmar-based satellite facilities that can transmit telecommunications services

Provision of the following telecommunications services:

� Resale of wireline connectivity services

� Resale of terrestrial wireline connectivity services

� International and domestic network transport and switching services

� Resale of International Gateway Services

Deploy and maintain passive network infrastructure for civil engineering and non- electronic elements, including but not limited to:

� Towers � Masts � Ducts � Trenches � Poles � Dark fiber

Provision of the following telecommunications services:

� Public payphone services

� Public switched data services

� Audiotext hosting services provided on an opt-in basis

� Directory services � ISP services � Public access center

services � Messaging services � Private line voice and/or

data services (including leasing Wide Area Network capacity to third parties)

� Value-added services

3 Application procedure

Procedures for both NFS-I and NS are the same: A company must:

� Complete the MCIT’s standard application form, providing all required information

� Apply under the license category relevant to its intended activities

� Submit the application to the Posts and Telecommunications Department (PTD)

� Pay the application fee set by the MCIT, unless exempted under the Rules- NFS-I application fee: 10,000,000 Kyats- NS application fee: 5,000,000 Kyats

NOTE: The MCIT will publish the standard application form on its website and will indicate the information to be provided in the application

Procedures for both NFS-C and AS are the same: A company must:

� Complete a standard registration form providing all required information

� Apply under the license category relevant to its intended activities

� Submit the registration form to the PTD � Pay a registration fee of 2,500,000 Kyats, unless

exempted under the RulesNOTE: The MCIT will publish the standard application form on its website and will indicate the information that must be provided in the application

ANALYTICAL TABLE

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LICENSE NFS-I NS NFS-C AS

4 Application incomplete or inaccurate

� If the PTD/ MCIT thinks the information in the application is incomplete or inaccurate, it will give notice in writing and the applicant may amend and re-submit the application

� Failure to respond within 30 days may result in rejection of the application

5 Timeframe for review and decision

� Approval or denial of application within 60 days � If the applicant is foreign or it is for International

Gateway � Services, then review period is 90 days

� Approval or denial of application within 30 days � If the applicant is foreign or it is for International

Gateway Services, then review period is 60 days

6 Delays in review &decision on license

If review exceeds 60 days, the applicant will receive written notice explaining the delay and giving the expected review completion date

If review exceeds 30 days, the applicant will receive written notice explaining the delay and giving the expected review completion date

7 Application approved

If the application is approved, the applicant must pay the applicable fees set by the PTD

8 Application denied

� If denied, the PTD must provide objectively justifiable reasons in writing � The applicant may reapply but must submit a new application and pay a new application fee

9 Qualification requirements

Not specified in the Proposed Licensing Rules

10 License period

15 yearsNo indication in the Proposed Licensing Rules whether this period is extendable; See license renewal (#13)

11 New or additional services

� A written request must be sent to the PTD and approval obtained for offering additional networks or services to end users or other licensees under the existing license

� The request must describe the proposed additional services and show that the licensee can meet any additional related conditions or obligations

� The licensee must pay a fee equal to half of the application fee- NFS-I fee: 5,000,000 Kyats- NS fee: 2,500,000 Kyats

� The PTD will notify the licensee of its decision within 30 days

� Upon approval, the PTD will update the existing license

If the request is denied, the PTD must give specific reasons and allow the licensee to re-apply. The licensee is not allowed to provide the additional services until approved to do so.

� A written request must be sent to the PTD and approval obtained for offering additional networks or services to end users or other licensees under the existing license

� The request must describe the proposed additional services and show that the licensee can meet any additional related conditions or obligations

� The licensee must pay a fee of 1,250,000 Kyats � The licensee may begin engaging in the additional

activities permitted within the scope of its existing license upon submission of the notification

� The PTD will notify the licensee of its decision within 30 days

� Upon approval, the PTD will update the existing license

If the request is denied, the licensee must cease the new activities. The PTD must give specific reasons for the denial and allow the licensee to re-apply.

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LICENSE NFS-I NS NFS-C AS12 License

renewal � A request for renewal shall be made no more than 24 months and no less than 12 months prior to the license

expiry date � A request for renewal will be reviewed on the same or substantially similar terms and for the same duration of

the initial license period � If the request is refused, the PTD will provide written notice stating the reasons for refusal and provide a

reasonable opportunity to remedy � Written notice of the decision will be provided within 6 months of receiving the application to renew

13 Spectrum licenses

� An NFS-I license does not guarantee access to spectrum resources

� Companies must submit

� a separate application for a spectrum license to the PTD

� An NS license does not permit a licensee to use scarce spectrum resources assigned by the PTD

� A licensee can only use unassigned spectrum resources, such as a spectrum in “unlicensed” frequency bands

N/A � An AS license permits a licensee to use spectrum resources that are not assigned by the MCIT, such as a spectrum in “unlicensed” frequency bands

14 Allocations for numbers

� Separate application process from NFS-I application

� Must apply pursuant to the Numbering Rules

� Separate application process from NFS-I application

� Must apply pursuant to the Numbering Rules

N/A

Telecommunications Equipment Licensing

15 Registration procedure

� The MCIT will issue a standard registration form, which indicates the information to be provided � The applicant must complete the registration form � A registration fee of 5,000 Kyats must be paid � If the PTD or MCIT thinks that the information in the application is incomplete or inaccurate, it will inform the

applicant in writing and the applicant may amend and re-submit the application � In such a case, the applicant must amend and re-submit its application within 30 days of receipt of written

notice � Failure to respond within 30 days may result in rejection of the application � Anyone meeting the qualification criteria set out in the registration form shall receive a license

NOTE: � The MCIT will set forth in a schedule the list of equipment that requires a license � Public consultation will then be done, which will include proposed terms and conditions and duration of license � A license will generally be required where there is a high likelihood of harmful interference and/or a license is in

the interests of national security and the public

16 Timeframe for review and decision

� The PTD will review the registration form within 30 days of receipt of a completed and accurate registration form

� The PTD will issue a license if the registration is approved � If the registration is denied, the PTD must provide objectively justifiable reasons in writing � The applicant may reapply but must submit a new form and pay a new registration fee

17 Equipment that requires a license

Satellite equipment (e.g., satellite telephones) Radar equipment and devicesHF radio equipment

(This information in this table is based on the proposed licensing rules)

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CAN A BANK CHOOSE ONLY ONE MOBILE OPERATOR AS A PARTNER?Mobile banking regulations in India provide clearly that banks must provide a mobile banking platform which is network neutral, i.e. it works with any mobile operator (s. 9 . Master Circular on Mobile Banking Transactions in India dated 1 July 2013).

Forgetting for a moment whether a Myanmar bank would uberhaupt want to sign such an exclusivity, there is no such rule in the Mobile Banking Directive in Myanmar. The Mobile Banking Directive and its text as it stands today does not address whether a bank would be free to make only one mobile operator its partner, and no others. However, such exclusivity does raise some other legal questions.

Firstly, although the Mobile Banking Directive does not actually state that the CBM gets to approve the list of cashpoints, agents and partners, it is difficult to imagine any bank signing up such a partnership without the blessing of the regulator. Most likely, knowing how things usually work in Myanmar, the CBM will consult with the Ministry of Communications and Information Technology (MCIT) on any such arrangement. The MCIT would be able to raise any concerns with respect to an exclusive arrangement between a bank and a mobile operator.

Secondly, Myanmar’s laws and regulations on competition law might, depending on the circumstances, come into play. Competition rules are meant to prevent market operators from engaging in behavior that lessens a free and fair competition between different suppliers of a good or a service. Myanmar is still in course of preparing its general competition law. Nevertheless, a number of legal provisions about competition can be found in various laws and regulations.

In terms of competition law, there are two perspectives: (1) could it be a violation of competition rules in Myanmar banking law for a bank to allow access to its mobile banking platform only to the subscribers of one mobile operator; and (2) is it a violation of competition rules in Myanmar telecommunications law for a mobile operator to sign an exclusive agreement with one bank, which

excludes the other mobile operators from the mobile banking platform?

Section 38 of the Financial Institutions of Myanmar Law provides that banks are prohibited from “entering into contracts or agreements which would secure them a position of dominance on the money, financial or exchange markets”. This provision forms a prima facie basis for the CBM to act in case they would believe that an exclusive deal with an operator would lead to a dominant market position. However, “dominant market position” is not defined, at least not for this particular purpose.

The other way around, s. 36 of the Telecommunications Law prohibits Licensees from entering into any understanding, agreement, or arrangement with any person, department or organization which provide for price fixing, market sharing, or boycotting of a competitor, supplier or Licensee. The Draft Competition Rules which are in preparation under the Law on Telecommunication indeed also cover agreements between telecom operators and non-licensees, such as between mobile operators and banks. Under the Rules, an agreement that lessens free competition, if that is indeed the case, might be targeted. Much will depend on whether the bank in question is considered to have a “dominant position” in the

mobile banking market. As is stated in the Draft Competition Rules “the Department may assess whether any other Agreements between Licensees or between a Licensee and third parties, including joint- ventures or similar Agreements, have the object of significantly preventing, restricting, or distorting competition in any telecommunications market (s. 10 c) Draft Competition Rules).

Under the Telecommunications Law and s. 15 of the Draft Competition Rules, a licensee mobile operator “will be classified as being in a Dominant Position if:

1) it is licensed to operator controls Essential Facilities used for the provision of telecommunication services in Myanmar; or

2) it holds a degree of Market Power that affords it the ability to behave to an appreciable extent independently of competitors and Consumers in any market in which it provides telecommunications services pursuant to its license”.

Finally, we think that any type of contractual exclusivity will have to steer clear of the wide- reaching prohibition on restraint of trade in the Myanmar’s Contract Act, an anti-competition rule of sort avant la lettre.

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The Consultation Document of the Telecom Rules goes to great lengths to explain why the portability of numbers (when subscribers can change an operator without changing their mobile number) is a good thing, but not for Myanmar…yet. With the MPT in a dominant position, it would not be feasible to introduce portability, the

NO PORTABILITY OF NUMBERS (YET)

ONLY COST-ORIENTED FEES FOR SHARING POLES AND RADIO TOWERS?

Tower companies face other problems when it comes to pricing access to their facilities. Poles and radio towers, which are essential assets for tower companies, have a special regime in the Rules as “essential facilities”. This is not uncommon. The WTO Reference Paper also recognizes special rules for essential facilities. The WTO definition is quite a bit simple than in the Rules, defining them as “facilities of a public telecommunications transport network or service that (a) are exclusively or predominantly provided by a single or limited number of suppliers; and (b) cannot feasibly be economically or technically substituted in order to

provide a service” (Definitions, WTO Reference Paper).

Under the Competition Rules, the owner of these essential facilities (even if that owner is not a “dominant licensee” or in WTO parlance a “major suplier”; must make the poles and radio tower available to other licensees at a cost-oriented price, in certain circumstances. Those circumstances are subject to interpretation and discretion. For example, a new entrant can ask the owner of the radio tower to share on a cost-basis if the new entrant is “neither able to replicate the facility within the foreseeable future, nor obtain it from a

drafters argue. “Experience shows”, it is stated, “that if mobile number portability is introduced too early into a less-mature market, this can lead to a significant risk of causing inappropriate harm to the incumbent. Since the monopoly incumbent, MPT, begins with 100% market share, with the introduction of number portability, porting can only

take place in one direction and this could lead to unsustainably high churn rates”.

The PTD does envisage reevaluating this in 18 months, though, so the consumer’s dream of number portability might still be realized.

third party through a commercial transaction, at a cost that would allow market entry”. One can easily imagine different points of view on such questions. Tower companies obviously plan to make their facilities available to as many operators as they can, often with very different price structures. An obligation to do so at “cost-oriented prices and on non-discriminatory terms and conditions” (Section 5(j), PCR) may have a big effect on them, depending how the Rules are applied in practice.

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VDB Loi has been exceptionally successful with its representation of clients in the Telecommunications, Media and Technology (TMT) sphere. TMT is a core sector of the firm in Myanmar.

Highlights of our experience in TMT:

� Acted for 5 of the 12 prequalified bidders in the 2013 telecom tender

� Acting as local counsel to Ooredoo on its multibillion dollar greenfield telecommunications investment in Myanmar

� Assisting a number of passive network infrastructure providers including tower companies, with their licensing and advised on

fiber deals

� Spearheaded proposed regulatory reform for passive network infrastructure in negotiations with the Government

� Assisting several EU, US and Asian multinational technology providers with their licensing

� Providing technical assistance to the Post and Telecommunications Department of the Ministry of Communications and

Information Technology

Operating licenses, business licenses

VDB Loi is very often asked by clients in the TMT sphere to advise on and assist with securing all required approvals from the various regulators or Ministries to carry out a business activity. In practice, even if no specific licensing system exists, investment proposals need to be supported by the Ministry or Ministries that have authority over this activity. If this communication between the various Government departments is not properly supported by the investor’s local advisor, there is the possibility of significant delays. Our service includes advising clients on the policy and practices of the relevant Ministry or Ministries, providing advice on their expectations based on earlier projects, establishing contact, and assisting with securing the required approvals, permits and licenses.

VDB Loi’s foreign investment practice is without comparison. In order to meet clients’ needs for a flexible, highly responsive team with interdisciplinary skills, we have formed core teams with foreign lawyers, financial specialists and local attorneys. Time is of the essence in Myanmar deals. To ensure an efficient licensing process, our partners personally drive the effort, from advising on the investment structure to less glamorous but equally crucial tasks such as document collection.

Investment licensing

Obtaining an investment permit from the Myanmar Investment Commission (MIC) for the project company is a crucial step in the investment process, and a major specialty of VDB Loi. The preparation and application process is often underestimated by investors. Service providers in Myanmar use quite different approaches and fee structures in relation to obtaining an MIC Permit.

Our firm’s approach is to provide not just high-level advice on the process, but to actually prepare the voluminous financial portion of the application ourselves in addition to the legal sections. Of course, this is only possible with an interdisciplinary team that comprises accountants and financial specialists (overseen by a partner with a CPA and Big Four background), as well as lawyers:

We drive and monitor the document collection process with precision and unparalleled responsiveness: Our deep understanding of the small but often very important details of the process allows us to be clearer in our communications with the client, and to eliminate unnecessary costs and time.We actually complete the investment proposal and, more importantly, the financial projections that are required to be added to the proposal: The financial projections and analysis is the area where clients lose a lot of time if they are not properly assisted by an advisor who has a deep understanding of the particular requirements and expectations of the MIC. Our team, not the client, will have the labor-intensive task of preparing the investment proposal and its annexes, based on the client’s business plans or budgets.Lodging the proposal with the MIC: We will lodge the investment proposal dossier with the MIC on your behalf.Following up the proposal and project presentation: We will liaise with the authorities in order to obtain the MIC Permit. This usually requires us to provide additional information to the authorities upon their request before they accept or agree to pass on the proposal internally.Very often face-to-face meetings and an actual project presentation will be required. We will conduct such meetings (with or without your representatives), assist in preparing the presentation (for example pointing out where to put emphasis, based on our prior experience with the MIC), and assist you at the time of the presentation (or make it on your behalf if you are unable to attend).

Our approach results in significant time and cost savings for prospective investors.

Corporate and tax structure advisory

We will analyze your project and advise you on its legal and tax merits from a Myanmar law perspective, covering:

� Foreign ownership restrictions

� Shareholding structure options

� Required operating permits � Capitalization � Financing and security � Profit extraction � Foreign exchange issues � Importation � Land lease rights � Tax structure

Regulatory compliance

Our clients in the TMT sector seek our guidance with respect to a wide range of regulatory and compliance issues. Our team assists with detailed advice and information, and with liaising with regulators.

We have experience with

� Tariff approvals for telecommunications services

� Interconnection regulations � Safety compliance for movie

theatres � Environmental regulatory

compliance � Industrial safety regulations � Import and export regulations

for TMT equipment � Construction permits for

passive network infrastructure

VDB LOI AND TMT IN MYANMAR

Our Services:

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