Norwegian telecoms firm Telenor has sold its Myanmar business, blaming the difficulties of operating under the military junta and jolting activists, who say they relied on a sole Western operator for communications.
Telenor, one of the largest foreign investors in Myanmar, sold its Myanmar operations to Lebanese investment firm M1 Group for $105 million (about Rs 790 crore), marking its withdrawal from a country mired in chaos following a military coup in February. announced.
It was one of the few Western companies to bet on the Southeast Asian country after it emerged from a military dictatorship a decade ago. Myanmar accounted for 7 per cent of Telenor’s earnings last year.
“There are three reasons why we think sales are important: it’s the safety of our employees, but also regulatory terms and also good compliance,” Telenor CEO Sigway Brecke told Reuters.
“When we wrote off the business in May, we felt we could still operate in the country, although it was challenging. But after that, it got worse.”
In May, Telenor reported a loss of ₹6.5 billion (about Rs 5,530 crore) after its mobile business in Myanmar was severely restricted after the February 1 military coup.
On March 15, the junta ordered a nationwide shutdown of mobile data, making it harder for pro-democracy activists to organize protests and broadcast messages supporting the overthrown civilian government.
The violence since the February 1 coup has driven more than 230,000 people out of their homes. The United Nations says more than 880 people have been killed by security forces and 5,200 are in custody.
A source told Reuters earlier this week that Myanmar’s junta has banned senior foreign officials of major telecommunications firms from leaving the country without permission and is pressuring them to fully implement the interception technology. which will allow the authorities to monitor the users.
Activists expressed concern over the exit of Telenor, one of two foreign operators present with Qatar’s Ooredoo. Other operators in Myanmar are state-backed MPT and Mittel, which are owned by a military-linked company.
“We are relying mostly on Telenor,” publicist Thatt Sway Win told Reuters. “Most activists trust it as a company that respects human rights. I hope the new company respects human rights as Telenor did before.”
M1 Group was a major investor in Myanmar’s largest independent tower company, Irrawaddy Green Towers (IGT), which has a master lease agreement with military-backed telecommunications Mytel. Private equity firm CVC had said in February that it would buy IGT from M1 Group and other shareholders.
The M1 group was not immediately available for comment.
Some Telenor investors have welcomed the decision.
“It is positive to see that Telenor has not compromised on its fundamentals regarding human rights,” said Janick Scheele, head of responsible investment at DNB Asset Management, Telenor’s sixth largest investor with a 1.51 percent stake.
“We have had several communications with Telenor on this and it has undoubtedly posed a lot of dilemma for the company,” she told Reuters.
The Norwegian state-controlled operator has operations in the Nordics as well as in Asia, where 95 percent of its 187 million customers – along with Bangladesh, Malaysia, Pakistan and Thailand – live in Myanmar.
It has about 18 million customers in Myanmar, serving a third of its 54 million population.
Mads Rosendal, senior analyst at Danske Bank Credit Research, said the price was low, given how much Myanmar contributed to Telenor’s earnings.
“On the margins we … view it as a little bit of a minuscule negative because we expected to see higher value,” he said.
Shares of Telenor traded at NOK 148.05 (approximately Rs 1,260) at 0921 GMT (2:51pm IST) unchanged from Wednesday’s close.
© Thomson Reuters 2021