Orange, a subsidiary of
) is looking for additional partners to set up its operations in
Myanmar. The company is one of the companies bidding for
Myanmar's telecom license.
In partnership with Japan's Marubeni Corporation, Orange
submitted its Expression of interest along with other
consortiums. The result of the bidding process will be declared
on Jun 27, 2013.
The French telecom giant believes that it has a good chance of
acquiring the license and wants to tie up with a local Burmese
partner. Orange wants to partner either with a non-telecom
operator or a small operator, which will possess local knowledge
and expertise. Nevertheless, Orange is very clear that it wants
to lead the partnership agreement.
Myanmar provides ample opportunity as only 10% of the
country's 64 million population has access to mobile
communications. Though wireless service in Myanmar was introduced
in 2001, high activation cost has kept mobile phones out of reach
for most of the people.
The government of Myanmar wishes to increase the number of
telecom carriers from 2 to 4, to enhance the wireless penetration
to 80% by 2016.Initially, the government of Myanmar received
expressions of interest (EOI) from 91 entities, which then came
down to 12 hopeful applicants.
Meanwhile, one of the joint bidders,
China Mobile Ltd
), has opted out of the bidding process for Myanmar's telecom
license. Both the companies cited that the Myanmar telecom
license does not meet the strict investment criteria which they
Orange has also declared that on acquiring the telecom
license, it will invest around $1 billion over the next 5-7 years
to build up a telecom network in Myanmar. However, developing a
mobile network in a country with regular power cuts and lack of
technical resources could be quite difficult. Thus, we remain
skeptical about the success of Orange in Myanmar with such a
meagre investment as opposed to other consortiums who have vowed
multi-billion dollars in investments.
France Telecom currently carries a Zacks Rank #4 (Sell). Among
) carries a Zacks Rank #2 (Buy) and is worth considering.
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