Vodafone Teams With China Mobile for Myanmar License Bid

Vodafone Group Plc (VOD) and China Mobile Ltd. (941), the two biggest wireless companies, will join forces to bid for mobile licenses in Myanmar as investors and operators jostle to be among the first into the Southeast Asian country.

The licenses would allow Newbury, England-based Vodafone and China Mobile to build and operate a nationwide network for 15 years, they said yesterday in a statement. Myanmar will announce the license winners on June 27, Vodafone said, citing the government’s documentation.

Investors are piling into newly opened Myanmar, which has less than 10 percent mobile penetration among its 64 million people, after the government said it wants to boost telecommunications coverage to as much as 80 percent of the population by 2016. Billionaire George Soros has joined with Digicel Group Ltd. and property developer Serge Pun to bid for the licenses, the trio said in a separate statement yesterday.

“Myanmar will be an important new market for the global mobile industry,” Vodafone and China Mobile said in their statement. “The licensing round is also an opportunity to accelerate the pace of Myanmar’s social and economic development.”

Myanmar’s economy is projected to grow 6.2 percent this year, up from an anticipated 5.5 percent increase in 2012, according to an October World Bank report. The government said in February that 91 companies had formally expressed interest in the two licenses.

Mobile Costs

Mobile phones have been out of reach for most consumers in Myanmar since limited services were introduced in 2001. The cost of activating a phone using the global system for mobile communications standard, or GSM, was initially about 4.5 million kyat ($5,120). That’s fallen to about 200,000 kyat for a GSM chip, according to prices at phone vendors in the capital city of Yangon, still an expensive purchase for most.

Still, the state-run MRTV television station said this week that 350,000 low-cost mobile-phone cards a month will be sold in the country, also known as Burma, starting on April 24. The GSM chips will cost 1,500 kyat, the news station said, citing the Myanmar Posts and Telecommunications agency.

Myanmar said in January that the goal is to make “telecommunications services available to the public at affordable prices in both urban and rural areas, and to give the citizens and the enterprises the capability to choose their telecommunications services.”

“The liberalization of the telecommunications market in Myanmar will serve as an important economic stimulus for the country,” Soros said in the statement.

To contact the reporter on this story: Amy Thomson in London at athomson6@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net

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