Sunil Mittal-promoted Bharti Airtel has put in a bid to acquire fresh licence in Myanmar to spread its footprint in Asia.
Airtel is already operational in Bangladesh and Sri Lanka in the region.
There are at least four other global players that have expressed interest in acquiring licences in Myanmar as it looks to improve its communications network after decades of military rule. Norway’s Telenor, Malaysia’s Axiata and St Telemedia have also put in their bids, according to industry sources.
Myanmar is offering two licences to expand telecom coverage to as much as 80 per cent of the country by 2016, the Myanmar government had said on January 17 when inviting foreign companies to submit bids. The country's 5.44 million mobile-phone subscribers as of last month amounted to just 9 per cent penetration rate. The licences will be issued by June and may last as long as 20 years with an option for renewal.
Myanmar's Parliament may approve a draft telecommunications law, which will include the creation of an independent regulator by 2015, in the first half of this year.
While Kuala Lumpur-based Axiata and Norway’s Telenor are already investors in the Indian market, ST Telemedia owns stakes in technology and phone companies including StarHub, Singapore's second-biggest telecommunications operator.
For Airtel, Myanmar makes logical sense given the geographical coverage it has in the region. The Indian company’s bids may cheer Indian Government agencies who have been concerned about the growing clout of Chinese players in the region. But it’s going to be a tough market for the Indian player given that no foreign operator has ever been allowed into Myanmar before.
However, Airtel could replicate the low-cost business model which it has successfully adopted in the Indian market over the past 15 years. Despite having a population of about 60 million people, Myanmar only has around 2-3 million mobile-phone subscribers, according to the recent report from Nomura. The number of Internet users is also paltry, at about 110,000.