O’Brien’s Digicel loses out in Burma

The consortium led by Denis O'Brien's Digicel was not among the two successful bids for mobile phone licences in Burma, which were announced yesterday following some last-minute drama.

Telenor, the Norwegian State company that was Mr O'Brien's former partner in his first successful mobile phone venture, Esat Digifone, was among the two winners. The second winner was Ooredoo, from Qatar.

The announcement of the winning bids marks what many believe is an important step in the opening up of tightly controlled Burma, which was ruled by the military for decades and has one of the lowest mobile-phone penetration rates in the world.

In the event that one of the winning bids fails to meet the post-selection requirements, the opportunity will then go to a consortium involving France Telecom/Orange, and Japan's Marubeni.

The lower house of the Burmese parliament voted on Wednesday to delay the award of the two licences until a new telecommunications law was enacted, but the government body overseeing the tender said parliament had no authority to delay the process.

Cause for concern
Marae Ciantar, a lawyer with the Singapore-based firm Allens, said the attempt to impose the new requirement on Wednesday was a cause for real concern for foreign investors. The lower house wanted to favour bids with local partners.

Neither of the winning bids have local partners. Digicel was teamed up with a George Soros fund and a Singapore company associated with a prominent Burmese businessman, Serge Pun. Other bidders also had local partners.

Mr O’Brien said some weeks ago that Digicel had invested $31 million in its application for the licence, and described Burma as “probably the most exciting market on the planet at the moment”.

Yesterday he thanked the local government for the opportunity to be involved in the bidding process and congratulated the winning applicants.

Digicel said it remained committed to exploring commercial opportunities in Burma and would be evaluating these on an ongoing basis.

Digicel has been active in Burma since 2009 in preparation for the licence auction, employs almost 900 people there, and is the title sponsor of the Myanmar Football Federation and Special Olympics.