IFC to loan Ooredoo $150 million for infrastructure

The project – which has been in the works for the last few months and has involved Ooredoo’s corporate group, local management in Myanmar and the IFC – will primarily fund infrastructure development, according to Ooredoo’s new CEO, Rene Meza.

The funding will mostly go toward “expansion of our existing network footprint,” he told The Myanmar Times, calling the debt financing deal “very close to a full completion”.

“The IFC loan will contribute to financing the rollout of the company’s national 3G mobile network in Myanmar, licence payment and operating expenses,” according to a project description on the IFC project database.

Ooredoo, which recently announced it had turned on its services in Kayah State, has already spent more than $1.4 billion on its Myanmar launch. By the end of this year, the firm’s network could reach more than 85 percent of the population.

However, Mr Meza said Ooredoo didn’t plan to stop there, with further infrastructure building and investment required.

He said yesterday the company had more than 2800 towers and targeted 3000 by the end of the year. Ooredoo also expects to more than double its fibre line connectivity in the country by the end of 2016 from 5000 kilometres to more than 12,000km, he said.

Under terms of the loan, by the end of this year, Ooredoo will be required to develop and implement an Environmental and Social Action Plan as per the IFC’s performance standards and guidelines, according to the IFC’s project database.

It will also need to develop cultural heritage management and “chance finds” procedures and an emergency preparedness and response plan.

“Telecommunications network operations involve a limited number of specific environmental, health and safety and social impacts, which can be avoided or mitigated by adhering to generally recognised performance standards,” it said.

The main issues, which have also been publicly recognised by international competitor Telenor, include labour, working conditions, safety and security.

The IFC will not require Ooredoo to develop a strategy for dealing with land acquisition and involuntary resettlement, as “Ooredoo leases space on telecommunication towers that are owned and operated by third party tower companies”.

Ooredoo requires that its tower companies negotiate land lease agreements on a “willing buyer, willing seller basis”, said the IFC. As a condition of the investment, Ooredoo will develop procedures to cover public disclosure ahead of the construction of any new Ooredoo site.

“As part of IFC’s investment the company will also develop and implement a community grievance mechanism relating to the operation of existing tower sites and construction activities,” it said.

Ooredoo was granted a 15-year licence to operate in Myanmar in June 2013. It launched its network last August in Yangon, almost two months before rival Telenor launched its services in Mandalay.

However, second-quarter results released at the end of July showed Ooredoo falling behind on users, with less than half the number of subscribers secured by Norway’s Telenor. The two are competing with state-owned incumbent Myanmar Posts and Telecommunications (MPT) in a battle for users.

Ooredoo said in a July 29 press release it had racked up 4.3 million Myanmar customers by the end of June – representing an increase of 1 million users over the previous quarter, which has since risen to close to 5 million. The firm had earlier added 1.1 million subscribers in the first quarter of 2015.

Meanwhile, Telenor’s second- quarter subscription count came to 9.5 million at the end of June, up from 6.4 million the quarter before. Its base total has since crossed the 10 million mark.

Source: Myanmar Times

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