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KDDI and Sumitomo in line for Myanmar state partnership

Japanese firms KDDI and Sumitomo are reportedly close to forming an alliance with the state-controlled mobile operator in Myanmar.

If an agreement is reached, the resulting entity would provide competition for Ooredoo and Telenor, both of which were awarded licences last year.

Myanmar Posts and Telecommunications (MPT) invited the two companies jointly to hold “exclusive” discussion concerning the alliance, according to Sumitomo’s deputy general manager for Myanmar, Soe Kyu.

The choice of firms is somewhat surprising as neither Japanese company has been implicated with Myanmar in the past, while last year various heavyweight operators – including Orange, SingTel and Vodafone - were floated as potential partners for MPT.

Orange in particular was a likely choice, having been selected (in partnership with Marubeni) as a backup candidate in the event that Ooredoo or Telenor declined to accept their licensing agreement. However, it may still be a candidate – the government has not revealed how many firms it is holding talks with.

MPT has a relatively low number of mobile connections – at the end of Q4 2013 it had 7.6 million, giving it a penetration rate of just 11.7%. The government is keen to find a partner that will help it compete on even ground with Ooredoo and Telenor. In addition, it plans on selling a minority shareholding in MPT.

The state operator is the only mobile provider that currently offers a commercial service, although Ooredoo and Telenor will launch soon and internet service provider Yatanarpon holds a mobile licence.

 

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