Sale of Telenor’s Myanmar unit stalled as junta said to prefer local buyers

Photo by Tony Stoddard on Unsplash

Plans by Norway’s Telenor to withdraw from Myanmar by selling its telecom operations there to a Lebanese firm have stalled after the junta indicated it favoured at least part-ownership by a local company, according to people familiar with the matter.

Telenor, one of the biggest foreign investors in Myanmar, announced in July it was selling its local operations to M1 Group for $105 million, retreating from a country that has slid into chaos after a military coup.

But its exit has been mired in difficulties after the junta piled pressure on telecom and internet firms to instal surveillance technology and barred senior executives from leaving the country.

M1, an investment firm owned by the family of Lebanese Prime Minister Najib Mikati, is in advanced talks about a partnership with at least one Myanmar company – Shwe Byain Phyu Group which has interests in oil and gem mining, said three sources who declined to be identified due to the sensitivity of the issue.

Other local firms are also interested, two of the sources said, though Reuters was unable to establish which companies.

Telenor said in a statement to Reuters it was waiting for a formal response from Myanmar authorities to its request to sell its unit to M1 and declined further comment. A spokesperson for M1 declined to comment.

A person who answered the phone at Shwe Byain Phyu declined to answer questions or pass on enquiries. A junta representative did not respond to requests for comment.

Shwe Byain Phyu’s chairman, Thein Win Zaw, is a director of Mahar Yoma Public Company, part of a consortium that has a stake in Mytel, corporate records show. He did not respond to a request for comment by Reuters.

Junta’s crackdown

Activists have expressed alarm that Telenor’s exit could deepen the junta’s surveillance of the local population. It is one of four telecom operators in Myanmar, alongside Qatar’s Ooredoo, state-backed MPT and Mytel, which is part-owned by a military-linked company.

A Reuters investigation found telecom and internet service providers had been secretly ordered in the months before the coup to install intercept technology that would allow the army to freely eavesdrop on the communications of citizens.

Telenor said in September it was pulling out of the country to avoid European Union sanctions after “continued pressure” from the junta to activate the technology.

Since the Feb. 1 coup, Myanmar security forces have killed more than 1,200 people and arrested thousands in a bid to crush resistance, according to Assistance Association for Political Prisoners, a local non-governmental organisation.

The military seized power alleging widespread fraud in a November election won by a landslide by the civilian government led by Aung San Suu Kyi. International and local monitoring groups said there were no major irregularities with the vote.

The junta has imposed nationwide and regional shutdowns of mobile data, making it harder for pro-democracy activists to organise protests. It also issued a confidential order in July restricting senior foreign telecom executives from leaving the country without permission.

Shortly after the ban, security forces stopped a top Telenor Myanmar foreign executive at the airport, preventing the executive from travelling, according to two people with knowledge of the incident.

Telenor declined to comment, citing safety concerns for individual employees. Aung Naing Oo, the military’s investment minister, told Reuters in October Telenor executives had been “requested” not to leave the country pending regulatory approval of the unit’s sale.

He said at the time the sale was undergoing a screening process, noting M1 was a relative newcomer to Myanmar and authorities were scrutinising whether it was trustworthy.

Reuters

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.