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Telenor gets approval for Myanmar exit

Norwegian incumbent Telenor has overcome the last big hurdle to the sale of its Myanmar operation.

The Myanmar Investment Commission late last week approved a plan that – as stipulated by the junta – paves the way for a domestic partner to acquire majority control of the business.

“The security situation is extreme and deteriorating, and we must ensure that our exit does not increase the safety risk for employees. With limited options available, the sale of Telenor Myanmar is deemed to be the most realistic alternative to keep our employees safe. Because of the current situation, we are significantly constrained in our choices and with this approval the transaction can be finalised,” said Telenor CEO Sigve Brekk, in a statement.

Under the plan, Telenor will proceed with its existing agreement to sell Telenor Myanmar to Lebanon-based investor M1 Group. M1 has established a special-purpose entity in Singapore called Investcom, which will acquire the assets. To appease the authorities, M1 has sold a 49 percent stake in Investcom to Myanmar conglomerate Shwe Byain Phyu.

Once the deal with Telenor closes, M1 will sell an additional 31 percent of Investcom shares to Shwe Byain Phyu. Telenor said it has not been involved in any discussions between M1 and Shwe Byain Phyu, but it has been assured by external consultants that neither Shwe Byain Phyu nor its owners are currently subject to any international sanctions.

Once the dust settles, Telenor Myanmar will continue to operate under its current brand for four months. Telenor also has a six-month transition service agreement with the company’s new owners. After that expires, Telenor might finally be able to put this sorry saga behind it.

The company was well and truly caught between a rock and a hard place following the military coup of February 2021. On the one hand, it was under pressure to safeguard human rights by offering citizens a means of communicating and accessing important information. But on the other hand, the junta had ordered it to install intercept equipment on its networks, in contravention of Norwegian and EU sanctions.

Telenor refused to spy on its own customers, but it also needed to protect staff. Eventually it decided the best thing to do would be to leave Myanmar altogether, so it agreed to offload the operation to M1. Human rights groups intervened, arguing that the sale contravened OECD guidelines obliging multinational companies to uphold human rights and resist efforts to infringe upon them. However, Telenor proceeded with the sale as it did not want to risk employee safety by continuing to defy the law.

In January, the situation was further compounded by the introduction of punitive taxes on SIM cards and mobile data revenues, forcing the kind of price hikes that made mobile data services all but affordable for the poorer members of the population. More recently, Telenor was under pressure to safeguard customers by deleting their data and shutting down the operation before it was transferred to the new owners. Once again Telenor declined, saying it did not want to risk its employees incurring the wrath of the junta.

“We are deeply saddened for the society and people of Myanmar who are experiencing an extremely difficult situation. Leaving Myanmar was a decision we made with heavy hearts, and I would like to thank our employees and customers for their dedication to Telenor throughout our years in Myanmar,” said Brekke.

As for what happens next, it will be incredibly difficult to find out. Last year Reporters Without Borders ranked Myanmar 140th in its World Press Freedom Index. And with mobile operators under orders to keep tabs on their customers, it will become even harder for the truth to prevail.

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