Myanmar authorities have cleared Bharti Airtel’s application for acquiring a telecom licence in that country.
The selection committee has invited Airtel and 11 other international operators to participate in the third and final stage of the licence award process.
Sunil Mittal-promoted Bharti Airtel had put in a bid to acquire fresh licence in Myanmar to spread its footprint in Asia. Airtel is already operational in Bangladesh and Sri Lanka.
For Airtel, Myanmar makes logical sense given the geographical coverage it has in the region. The Indian company’s bids may cheer Indian Government agencies which have been concerned about the growing clout of Chinese players in the region. But it’s going to be a tough market for the Indian player given that no foreign operator has ever been allowed into Myanmar before.
However, Airtel could replicate the low-cost business model which it has successfully adopted in the Indian market over the past 15 years.
Despite having a population of about 60 million people, Myanmar only has around 1.5 million mobile phone subscribers. The number of Internet users is also paltry, at about 1.1 lakh.
Myanmar is offering two licences to expand telecom coverage to as much as 80 per cent of the country by 2016, the Myanmar government had said on January 17 when inviting foreign companies to submit bids. The country’s 5.44 million mobile-phone subscribers as of last month amounted to just 9 per cent penetration rate.
The licences will be issued by June and may last as long as 20 years with an option for renewal.
Airtel could still lose out because there are 12 applicants shortlisted by the Myanmar Government and only two will be selected. Vodafone, Telenor, SingTel and China Mobile are among those which have been shortlisted. The expression of interest floated by Myanmar for two telecom licences received application from 91 companies.
“The third and final stage of the licence award process will now start for the pre-qualified applicants. The pre-qualified applicants will be required to submit their applications to the Committee by June 3,” the statement from Myanmar Government said.
The winner of the Myanmar telecom licences will be declared on June 27 “based on the comparative evaluation method”.
Airtel has stated in the past that the 3G intra-circle roaming arrangements are in compliance with the clarifications of the DoT at the time of the auction of the 3G spectrum, all applicable laws and licensing conditions and are hugely beneficial to customers and grave inconvenience will be caused to customers if it is disallowed.