Myanmar continues to feature in industry headlines for all the wrong reasons, with Axiata Group agreeing to sell its local tower unit following an exit by Norway-headquartered Telenor in 2022, though Japanese operator KDDI has decided to ride out the storm.

Last week Axiata announced it would offload its 87.5 per cent stake in its asset in Myanmar, held by its tower company edotco’s local subsidiary, for $150 million to an unnamed party.

Various media outlets suggested Pun Tower Investments, owned by Yoma Strategic Holding CEO Serge Pun, as the anonymous buyer.

Axiata blamed the exit on deteriorating macroeconomics and operating environments. A military government declared a state of emergency on 1 February 2021.

The sale of the special purpose investment holding company is subject to regulatory approvals and is expected to be completed within 12 months; Axiata noted in a statement the transaction won’t have a material impact on its consolidated net assets.

The tower subsidiary started operations the year after Telenor and Ooredoo launched mobile services in the country and managed more than 2,000 towers across the country at its peak. It initially acquired a 75 per cent share in Digicel Myanmar Tower Company for an estimated $221 million.

Stay or go?
Meanwhile, KDDI’s local unit KDDI Summit Global Myanmar (KSGM) continues to operate a joint venture it launched in 2014 with Japan-based investment company Sumitomo and state-owned MPT. 

In late January 2024, KDDI issued a statement explaining it recognises the contribution it can make by remaining in Myanmar.

Based on the recommendations of “internationally renowned and trusted human rights” consultants which carried out impact assessments as well as other stakeholders, the company highlighted maintaining communications networks in the country is important in terms of respecting human rights.  

It added: “We will continue to monitor changes in the situation and consider appropriate measures.”

The Japanese operator stated its Myanmar unit has been subject to restrictions introduced by the central bank on the collection of lease receivables denominated in US dollars since April 2022, warning its operating results may be impacted.

Another player, Qatar-based Ooredoo, has run into hurdles in divesting its Myanmar assets. In September 2022 it revealed plans to sell its local unit to Singapore-headquartered Nine Communications for $576 million. But the deal appears to have unwound, with no update over the past 18 months.

Ooredoo, like Telenor, faced challenging demands during negotiations with the military government, which reportedly wanted a local buyer to take control of the business.

Telenor pulled out of Myanmar in March 2022, selling its stake to Lebanese investment firm M1 Group for $105 million, nearly a year after booking an impairment charge of some $780 million on its local operations, a few months after a military coup.

Earlier in 2022, the operator finalised a deal to sell its majority interest in mobile payments joint venture Wave Money for $53 million to a subsidiary of Yoma.

M1 Group, which holds a minority interest (a local company owns the majority stake) in the operator, introduced the Atom brand in mid-2022, phasing out the Telenor brand over the following 18 months.

Telenor disclosed in 2021 it invested a total of $534 million in the country. Ooredoo booked an impairment of nearly $632 million in H1 2021, attributed mainly to its operations in Myanmar.

Rising connectivity 
Mobile penetration in the country soared over the last decade, with the country of nearly 54 million people ending 2023 with 65 million mobile connections, up from just 7.2 million in mid-2014, figures from GSMA Intelligence showed. 

While total mobile connections dipped by 1.5 million over the last two years, ARPU remained stable at around $2.40 a month and LTE connections grew 21.5 per cent to 46.2 million at end-March 2024, with 95 per cent of users on mobile data plans, up from 87 per cent. Average monthly data traffic increased from 3.1GB to 5.6GB.

This growth, despite a myriad of obstacles since the coup including blocked access to internet services, lends support to KDDI’s decision to continue to work with its local partner KSGM to aid MPT’s operations to deliver connectivity across the country.

KDDI stated it recognises the situation in Myanmar continues to be difficult, with regional conflicts occurring frequently and all businesses in a difficult situation, adding it continues to “respect human rights in accordance with international human rights norms, while paying attention to ensuring the safety of local employees”.

The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.