Telenor writes off Myanmar investment of over $780 million
Norwegian telecommunications company Telenor at the presentation of its first-quarter financial results on May 4 said that the current situation in Myanmar left it with no other choice than to write off its entire investment in the country of $782 million.
Telenor CEO Sigve Brekke said that the military coup had a “severe impact” on the company’s business in Myanmar and the situation was not expected to get better any time soon.
“Due to the worsening of the economic and business environment outlook and a deteriorating security and human rights situation, we see limited prospects of improvement going forward,” Brekke said.
Telenor has been awarded a mobile phone license in Myanmar in June 2013 and launched services a year later. Over time, it grabbed a market share of about a third of the mobile phone market in the country, behind state-controlled Myanma Posts and Telecommunication, or MPT, with about 40 per cent market share, and ahead of Ooredoo Myanmar with some 18 per cent.
A fourth mobile phone company., Mytel, a joint venture between Myanmar’s military and Vietnam’s Viettel, was launched in 2017 and currently has a market share of around 15 per cent.
“Reassessment” of Myanmar operations, but no withdrawal
Telenor, which is now reassessing its operations the country, said it booked a first-quarter net loss of $467 million because of the write-off, down from $84 million in net profit in the previous year.
Telenor is one of the largest foreign investors in Myanmar. According to the country’s top taxpayers list, it led foreign private enterprises in terms of commercial taxes in 2019.
The opening of the telecom sector to foreign investors was part of the civilian government’s drive back in 2011 to boost Myanmar’s lagging economy. The arrival of the likes of Telenor helped to significantly improve the industry.
But the February 1, 2021 coup changed everything. The junta began restricting social media access, including Facebook and Twitter. Further, since mid-March, it has implemented all-day mobile Internet blackouts. As fixed lines are not common among ordinary households, many Myanmar citizens have lost access to the Internet entirely.
According to Telenor’s financial report, subscription and traffic revenues in Myanmar decreased by 19 per cent, hit hard by the data network shutdown.
However, for the time being, Telenor said it will remain in Myanmar and continue offering its services.
Ooredoo loses data revenue and customers
The other foreign mobile telecom firm invested in Myanmar, Ooredoo from Qatar, is also impacted, although not to the extent of its Norwegian peer.
Ooredoo Myanmar reported a decline in revenue of 11 per cent to $69.2 million in the first quarter year-on-year, mainly from dropping data bandwidth sales, but noted that the drop was partly offset by an increase in voice revenues. However, the company’s customer base decreased by 14 per cent to 13.4 million in the first quarter of 2021 compared to the same period last year.
Picture: Aung Htai Hlaing Norwegian telecommunications company Telenor at the presentation of its first-quarter financial results on May 4 said that the current situation in Myanmar left it with no other choice than to write off its entire investment in the country of $782 million. Telenor CEO Sigve Brekke said that the military coup had a “severe impact” on the company’s business in Myanmar and the situation was not expected to get better any time soon. “Due to the worsening of the economic and business environment outlook and a deteriorating security and human rights situation, we see limited prospects of...
Norwegian telecommunications company Telenor at the presentation of its first-quarter financial results on May 4 said that the current situation in Myanmar left it with no other choice than to write off its entire investment in the country of $782 million.
Telenor CEO Sigve Brekke said that the military coup had a “severe impact” on the company’s business in Myanmar and the situation was not expected to get better any time soon.
“Due to the worsening of the economic and business environment outlook and a deteriorating security and human rights situation, we see limited prospects of improvement going forward,” Brekke said.
Telenor has been awarded a mobile phone license in Myanmar in June 2013 and launched services a year later. Over time, it grabbed a market share of about a third of the mobile phone market in the country, behind state-controlled Myanma Posts and Telecommunication, or MPT, with about 40 per cent market share, and ahead of Ooredoo Myanmar with some 18 per cent.
A fourth mobile phone company., Mytel, a joint venture between Myanmar’s military and Vietnam’s Viettel, was launched in 2017 and currently has a market share of around 15 per cent.
“Reassessment” of Myanmar operations, but no withdrawal
Telenor, which is now reassessing its operations the country, said it booked a first-quarter net loss of $467 million because of the write-off, down from $84 million in net profit in the previous year.
Telenor is one of the largest foreign investors in Myanmar. According to the country’s top taxpayers list, it led foreign private enterprises in terms of commercial taxes in 2019.
The opening of the telecom sector to foreign investors was part of the civilian government’s drive back in 2011 to boost Myanmar’s lagging economy. The arrival of the likes of Telenor helped to significantly improve the industry.
But the February 1, 2021 coup changed everything. The junta began restricting social media access, including Facebook and Twitter. Further, since mid-March, it has implemented all-day mobile Internet blackouts. As fixed lines are not common among ordinary households, many Myanmar citizens have lost access to the Internet entirely.
According to Telenor’s financial report, subscription and traffic revenues in Myanmar decreased by 19 per cent, hit hard by the data network shutdown.
However, for the time being, Telenor said it will remain in Myanmar and continue offering its services.
Ooredoo loses data revenue and customers
The other foreign mobile telecom firm invested in Myanmar, Ooredoo from Qatar, is also impacted, although not to the extent of its Norwegian peer.
Ooredoo Myanmar reported a decline in revenue of 11 per cent to $69.2 million in the first quarter year-on-year, mainly from dropping data bandwidth sales, but noted that the drop was partly offset by an increase in voice revenues. However, the company’s customer base decreased by 14 per cent to 13.4 million in the first quarter of 2021 compared to the same period last year.
