Ooredoo set to follow Telenor out of Myanmar

The sorry saga of Myanmar’s regression towards international isolation is about to add another chapter.

Reuters reported on Wednesday that Qatar-based Ooredoo, which along with Norway’s Telenor swept into Myanmar’s mobile market on a wave of optimism in 2014, is in talks to sell its business there. According to unnamed sources in the report, Ooredoo has informed the country’s telco regulator, the Myanmar Posts and Telecommunications Department (PTD), of its intentions.

Potential suitors are said to include local conglomerate Young Investment Group, which has fingers in all sorts of different pies, one of them being telco towers. Myanmar satellite direct-to-home (DTH) provider SkyNet is also said to be in the frame. So is Singapore-based networking and data centre provider Campana Group, which already does a lot of business in Myanmar and its neighbour Thailand. Reuters’ sources said negotiations are yet to reach the final stages.

While no official explanation has been given for Ooredoo’s alleged decision to leave Myanmar, there is plenty about which to speculate.

The most likely reason is that doing business there has become financially unsustainable for Ooredoo. The military coup in February 2021 froze foreign aid to Myanmar, as well as the junta’s foreign reserves held in the US, causing the value of its currency – the kyat – to plummet. Last week, Bloomberg reported that the central bank ordered companies and individuals to halt repayments of foreign loans in an effort to stem the outward flow of Myanmar’s dwindling foreign exchange reserves. According to the report, Ooredoo Myanmar is one of several companies there that has outstanding dollar-denominated loans.

In addition, in January, the PTD hiked taxes on data services to 15 percent from 5 percent, and introduced a tax of 20,000 kyat ($11) on the sale of new SIM cards. The official reason given was to help boost government coffers, but it was widely seen as a means of making it more expensive for dissidents to get online and coordinate their efforts. In its first quarter financial report, Ooredoo said it had 9 million customers in Myanmar. In 2020, that customer base stood at 15 million.

The alternative and, let’s face it, less likely explanation is that Ooredoo grew a conscience. As the military junta began cracking down on the opposition, Myanmar’s other foreign-controlled telco, Telenor, repeatedly spoke of its concern for employees and customers, as mobile data services were ordered to be shut down in certain parts of the country, and as pressure mounted on telcos to install surveillance equipment. Let’s not kid ourselves, Telenor also took a financial hit, writing down the value of Telenor Myanmar by $780 million following the coup, and that doubtless factored into its thinking. It nonetheless went to some lengths to occupy the moral high ground but it ultimately concluded its continued presence in Myanmar was untenable. In July 2021 it found a buyer in Lebanese-based investor M1 Group, and completed its exit this spring.

Telenor wasn’t the only foreign-owned company to call it quits following the coup. Japanese drinks giant Kirin also pulled the plug on its local joint venture in Myanmar, just days after the coup. It finally completed its exit this June. By comparison, Ooredoo has quietly gotten on with it over the last 18 months or so, weathering the financial and operational fallout in Myanmar as best it could.

It seems to have finally run out of road, and whatever the real reason behind Ooredoo’s decision to leave, it represents another unhappy milestone in Myanmar’s recent history.