Breaking News
Get 40% Off 0
Is NVDA a 🟢 buy or 🔴 sell? Unlock Now

Telenor quits Myanmar with $105 million sale to Lebanon's M1 Group

Published Jul 08, 2021 01:33AM ET Updated Jul 08, 2021 05:41AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: Telenor flag flutters next to the company's headquarters in Fornebu, Norway, June 1, 2017. REUTERS/Ints Kalnins/File Photo

By Victoria Klesty

OSLO (Reuters) - Norwegian telecoms firm Telenor has sold its Myanmar business, blaming the difficulties of operating under the military junta and dealing a blow to activists who say they relied on the only Western operator for communications.

Telenor, one of the biggest foreign investors in Myanmar, sold its Myanmar operations to Lebanese investment firm M1 Group for $105 million, announcing its retreat from a country that slid into chaos after a military coup in February.

It was one of the few Western companies to bet on the South East Asian country after it emerged from military dictatorship a decade ago. Myanmar accounted for 7% of Telenor's earnings last year.

Graphic: Telenor's earnings in Myanmar - https://graphics.reuters.com/TELENOR-MYANMAR/dgkvlrkgwvb/chart.png

"There are three reasons why we think a sale is necessary: it is the safety of our employees, but also the regulatory conditions and also that there is good compliance," Telenor CEO Sigve Brekke told Reuters.

"When we wrote off the business in May, we felt we could still operate in the country, although it was challenging. But after that, it has worsened."

In May, Telenor booked a loss of 6.5 billion crowns ($738 million) after seeing its mobile business in Myanmar severely restricted following the Feb. 1 military coup.

On March 15, the junta ordered a nationwide shutdown of mobile data, making it harder for pro-democracy activists to organise protests and circulate messages supporting the overthrown civilian government.

Violence since the Feb. 1 coup has driven more than 230,000 people from their homes. More than 880 people have been killed by security forces and 5,200 are in detention, the United Nations says.

Myanmar's junta has banned senior foreign executives of major telecommunications firms from leaving the country without permission and it is pressuring them to fully implement intercept technology that would let authorities monitor users, a source told Reuters earlier this week.

HUMAN RIGHTS

Activists expressed concern over the exit of Telenor, one of two foreign operators present alongside Qatar's Ooredoo. The other operators in Myanmar are state-backed MPT and Mytel, which is part-owned by a military-linked company.

"We are mostly relying on Telenor," campaigner Thet Swe Win told Reuters. "Most of the activists rely on it as a company which has respect for human rights. I hope that the new company will respect human rights as Telenor did in the past."

M1 Group was a major investor in Myanmar's largest independent tower company, Irrawaddy Green Towers (IGT), which has a master lease agreement with military-backed telecom Mytel. Private equity company CVC said in February it would buy IGT from M1 Group and other shareholders.

M1 Group was not immediately available for comment.

Some Telenor investors welcomed the decision.

"It is positive to see that Telenor did not compromise on their basic principles regarding human rights," said Janicke Scheele, head of responsible investments at DNB Asset Management, Telenor's 6th largest investor with a 1.51% stake.

"We have had multiple dialogues with Telenor on this and this undoubtedly presented a considerable dilemma for the company," she told Reuters.

The Norwegian state-controlled operator has operations in the Nordics as well as in Asia, where 95% of its 187 million customers reside - in Bangladesh, Malaysia, Pakistan and Thailand, as well as Myanmar.

It has around 18 million customers in Myanmar, serving a third of its 54 million population.

Mads Rosendal, senior analyst at Danske Bank Credit Research, said the price tag was low, given how much Myanmar has contributed to Telenor's earnings.

"On the margin we ... see this as slightly credit negative as we had hoped to see a higher value," he said.

Telenor's shares traded at 148.05 crowns at 0921 GMT, unchanged from Wednesday's close.

($1 = 8.8024 Norwegian crowns)

Telenor quits Myanmar with $105 million sale to Lebanon's M1 Group
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.
  • Any comment you publish, together with your investing.com profile, will be public on investing.com and may be indexed and available through third party search engines, such as Google.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email