Ooredoo raises $300 million from IFC, ADB

Ooredoo Myanmar has raised US$300 million through a loan from the Asian Development Bank and International Finance Corporation, to fund the rollout of its network.

In an announcement on February 7, the Qatari operator said the ADB and IFC would provide $150 million each, though provided no details of the terms of the financing.

Last October, Ooredoo Myanmar CEO Rene Meza told The Myanmar Times the funding would mostly go toward “expansion of our existing network footprint”.

Under the loan’s terms, Ooredoo was required to develop and implement an environmental and social action plan as per the IFC’s performance standards and guidelines. The main issues, which have also been publicly recognised by competitor Telenor, include labour, working conditions, safety and security.

The IFC did 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”, according to a project description published last year on the IFC project database.

The ADB and IFC said on February 8 in a joint statement that the loan would help boost economic growth and cut poverty. This is the ADB’s largest private sector investment into Myanmar to date.

Ooredoo’s network rollout will continue until 2019 with the goal of connecting over 90 percent of the population.

In 2013, only 7pc of people in Myanmar had access to a mobile phone. By the end of 2015 Ooredoo had covered 80pc of the population with its 3G network, the company said, adding that the deal “demonstrates Ooredoo’s long-term commitment to Ooredoo Myanmar”.

In an interview last week with The Myanmar Times, Mr Meza said the company ended 2015 with over 3400 telecoms towers, adding over 2200 new sites throughout the year. Ooredoo’s total investment in Myanmar is over $1.7 billion, he said.

“We closed 2015 with an investment in excess of $350 million and [are] projecting an investment of about $350 million for 2016 again, primarily focused on network expansion, coverage, fibre, IT infrastructure and some additional capacity,” he said.

During the interview, Mr Meza denied market rumours that Ooredoo plans to sell its Myanmar business.

The operator was granted a 15-year licence in June 2013 following a hotly contested international tender for two licences. It launched its network last August in Yangon, almost two months before rival Telenor launched its services in Mandalay.

Third-quarter results released at the end of October showed Ooredoo falling behind Telenor on users, with 4.8 million subscriptions compared with Telenor’s 11.8 million. The two are competing with state-owned incumbent Myanmar Posts and Telecommunications (MPT).

Mr Meza previously said the company did not initially intend to be a mass-market operator.

“We were basing our commercial strategy on the fact that we would be only for a portion of the country,” he said at a connectivity conference in Nay Pyi Taw in September. However, that game plan has changed.

“Now the strategy is clear,” he said in September. “We want to be a mass-market player. We want to be a 3G network not only for the classes, but also for the masses.”

 

Source: Myanmar Times

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