China Mobile Limited ( CHL ) and
Vodafone Group ( VOD ), the world's
largest and second largest telecom carriers, announced that they
have agreed to form a consortium to bid for mobile license in
Myanmar. The telecom giants are aiming to secure one of the two
telecom licenses to rollout a nationwide telecom network in Myanmar
Investors from all around the world are piling up to grab
Myanmar's telecom license as only 10% of the country's 64 million
populations 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.
However, the government of Myanmar wishes to increase the
wireless penetration to 80% by 2016, thus wants to increase the
number of telecom carriers from 2 to 4. Myanmar provides a new
growth opportunity for Vodafone, which has been struggling in the
ongoing economic instability in Europe.
Myanmar government has received expressions of interest (EOI)
from 91 entities, which include bids from SingTel, Qatar Telecom
and Telenor. Though tough competition awaits Vodafone and China, if
successful the mobile operators will get the license to operate a
nationwide network for 15 years. The name of the winning bidders
will be announced on Jun 27, 2013.
In its recently concluded quarter, Vodafone faced a customer
loss of 1.5 million in Europe. The company also underperformed in
Africa, Middle East and Asia Pacific, losing 2.5 million
According to the World Bank report, Myanmar's economy is
projected to grow 6.2% in 2013, representing a 12.7% annualized
growth. We believe that an emerging economy and the highly-literate
young population of Myanmar offer great growth opportunity for
Vodafone and CHL in South East Asia.
Currently, Vodafone carries a Zacks Rank #4 (Sell) while China
Mobile carries a Zacks Rank #3 (Hold).
Other Stocks to Consider
Other stocks worth considering in this sector include
Liberty Global Inc. ( LBTYA ) and
Rogers Communications Inc. ( RCI ), which carry a
Zacks Rank #2 (Buy).CHINA MOBLE-ADR (CHL): Free Stock Analysis
ReportLIBERTY GLBL-A (LBTYA): Free Stock Analysis
ReportROGERS COMM CLB (RCI): Free Stock Analysis
ReportVODAFONE GP PLC (VOD): Free Stock Analysis
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