Singtel is tempting Myanmar with a dedicated satellite as it seeks to steal a march on rivals bidding in the country’s first auction of mobile licences.
As part of its offer for one of the two licences to be auctioned at the end of this month, the…
Singtel is tempting Myanmar with a dedicated satellite as it seeks to steal a march on rivals bidding in the country’s first auction of mobile licences.
As part of its offer for one of the two licences to be auctioned at the end of this month, the Singaporean telco is inviting the recently democratised government to conduct feasibility studies for future satellite programmes.
It said having a national satellite would accelerate the development of Myanmar’s international infrastructure, attracting and supporting new business investments in the country.
“We want to bring more than just a domestic telecom infrastructure,” said Mark Chong, CEO of Singtel International.
“We will bring international connectivity and innovative services that will improve the quality of lives of the people.”
Singtel is bidding to enter Myanmar’s underdeveloped telecoms market in a consortium with two local players: conglomerate KBZ, which is an affiliate of the country’s largest privately-owned bank, and telecoms solutions specialist M-Tel.
Its consortium was one of 11 parties recently cleared to compete in the auction on 27 June.
The other contenders are: a consortium led by KDDI; Ooredoo; Millicom; a France Telecom-led consortium; Axiata; a Bharti Airtel-led consortium; Telenor; a consortium led by Digicel; an MTN-led consortium; and Viettel.
A partnership between Vodafone and China Mobile had also been due to take part, but they withdrew their bid after claiming the returns would not justify the investments.
A source working for one of the bidding parties pointed to KDDI, Axiata, MTN, Viettel and France Telecom as being seen as frontrunners, meaning Singtel’s announcement on 11 June that it will be leveraging on its space expertise could be an effort to bolster its fortunes.
Earlier this year Singtel partnered with an Asian distributor called Al Noor Group to sell its satellite-based handsets and services in Myanmar. That deal sees Al Noor Group distribute SingTel’s satellite phones, as well as Inmarsat’s Broadband Global Area Network (BGAN) and broadcasting bandwidth services in the country.
In a presentation detailing how Singtel could support the launch of Myanmar’s national satellite, the company said it had more than 35 years of experience in operating teleport services. It also ordered the launch of the ST-1 and ST-2 telecoms satellites, which were built by Astrium and Mitsubishi Electric, respectively.
Elsewhere, Singtel has a joint venture with Hong Kong-based satellite operator APT Satellite.
It also owns Australian satellite operator Optus, although it has brought in Credit Suisse and Morgan Stanley to review a sale that could raise as much as US$2bn. The CEO of local Optus rival NewSat has recently said there was an opportunity for the company to team up with private equity to make a bid.
However, Singtel is unlikely to struggle to fund a possible Myanmarese spacecraft. In its Q4 results last month, the group outlined plans to spend as much as S$2bn (US$1.6bn) on buying companies in the digital sector by 2016.
Spurred by Myanmar’s moves towards democracy and economic reform, businesses are clambering over each other to gain a foothold in the emerging market.
In late December Japan’s dominant satellite manufacturer NEC set up a branch office in Yangon, in southern Myanmar, as it seeks to build small, low cost satellites to tap a growing demand from emerging countries for their own spacecraft.
NEC, which claims to have been contributing to the country’s communications infrastructure for 35 years through the provision of services such as satellite ground stations and broadcasting systems, said businesses are being attracted to its unique geography and natural resources. However, it highlighted how a lack of key infrastructure was holding Myanmar back from realising this growth.
Only 3% of the nation’s roughly 62 million people subscribe to fixed or mobile services, according to NEC, which added that the government aims to push this figure as high as 50% by 2015.
Singtel’s satellite ploy could help Myanmar achieve its communications aspirations relatively quickly, and should boost its chances when the government comes to decide which bid best meets the needs of its people.
