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Singapore fund takes stake in Myanmar ISP Frontiir

Ascent Capital, a Singapore-registered fund manager, is leading an investment of US$26 million in Myanmar internet service provider Frontiir, marking its first equity investment in the country.

The deal is expected to help Frontiir expand its services to more than half of Myanmar’s states and regions within half a decade, with the aim of connecting a quarter of the population with broadband access. The Yangon-based firm currently provides its Myanmar Net internet service to around 1.6 million people across Yangon, Mandalay and Bago regions and Mon State.

“This investment is driven by our belief that internet access is an essential service which can improve lives, reduce inequalities and drive economic growth, especially in emerging markets like Myanmar,” said Lim Chong Chong, Ascent’s managing partner. It is a minority investment but the size of Ascent’s stake was not disclosed.

Although Myanmar’s telecoms liberalisation in 2013 has led to a huge increase in the number of mobile internet users, more than half the population remains unconnected to the digital world.

Mr Lim also pointed to Frontiir’s market-leading position and track record for Ascent’s decision on the investment. He plans to allocate CSR (Corporate Social Responsibility) funds into Frontiir to develop programmes to support gender equality and access to education.

Ascent prioritises the services industry, including consumer goods, education, healthcare, technology and financial services. In 2018, the fund management firm raised over $80 million for its Myanmar-focused fund, Ascent Myanmar Growth Fund (AMGF). It is the largest private equity fund in the country and aims to invest in 10 Myanmar firms over the next five years.

Frontiir’s ability to raise capital amid the COVID-19 pandemic is a testament of its track record of “bridging the digital divide” in Myanmar, said Frontiir chair and CEO U Wai Lin Tun.

“AMGF’s investment, along with the additional CSR funds are timely and can provide the stimulus needed to increase access to affordable internet especially in lower-income regions of the country,” he added.

Founded in 2013, Frontiir also received an investment of $30 million from UK-based development finance institution CDC last year and another $30 million from Myanmar’s private equity firm Delta Capital.

CDC recently came under fire from Britain’s opposition lawmaker Stephen Doughty after Frontiir – along with telecoms operators such as Telenor of Norway and internet providers – complied with a request by the Myanmar government to block more than 2000 websites, which include independent media sites for ethnic minorities.

Frontiir’s spokesperson told this newspaper that the company was required to follow such directives under the Myanmar Telecoms Law. But he said it is “committed to full transparency”. Frontiir issued a public statement in March responding to the orders right after the websites were blocked.

“[We] will continue to participate and support in industry-wide constructive discussions, and hold continued dialogue on this matter with the key stakeholders,” the spokesperson commented.

Frontiir executives have also taken part in an initial discussion around reforming the Telecoms Law, the legal basis of the government’s shutdown orders, according to a source involved in the discussion.

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