Telenor’s sale of Myanmar unit to M1 sidelined over junta’s opposition
Myanmar’s military junta has soured on Telenor’s proposed sale of its business in the country to Lebanon’s M1 Group, compelling the Norwegian telecoms company to look for alternative buyers, according to three people familiar with the regime’s thinking.
While the military-controlled telecoms ministry has not publicly ruled out the proposed $105m sale to M1, the people told the Financial Times that the regime wanted Telenor to sell to a Myanmar-controlled company. Some local telecoms and other companies have signalled their interest.
“Everybody knows they [the military] have made the decision to reject the sale, but they haven’t announced it,” said one industry executive, who asked not to be named because of the sensitivity of the deal and the business environment in Myanmar. “Telenor, knowing this, is prudently considering alternatives.”
The company, which is 54 per cent owned by the Norwegian government, said in response to questions about whether it was considering alternative buyers: “Telenor is still awaiting the Myanmar authority’s formal response.”
M1 said it would not comment “beyond confirming that the process is still ongoing”.
Telenor has been under growing pressure from rights groups over its protracted effort to exit Myanmar in the wake of a military coup in February that made its position increasingly untenable.
The company wrote off its entire $782m investment in the country in May. In July, it announced the sale of its local assets to M1, which was founded by Lebanon’s prime minister Najib Mikati and his brother Taha Mikati.
Sigve Brekke, Telenor’s chief executive, told the FT in July that it faced a conflict over how to operate in the country “with [a] military dictatorship without jeopardising our values”.
The regime in Myanmar has killed or jailed thousands and forced telecoms companies to restrict internet service, pressured their staff and demanded they install intercept equipment — a move Telenor said helped prompt its decision to depart.
But civil society groups in Myanmar argue that Telenor has “irresponsibly disengaged” from the country and failed to conduct due diligence or mitigate the potential negative human rights implications of its decision to sell its operations to M1.
In recent weeks, as it became clear that the junta was planning to axe the sale, some local investors have been in touch with Telenor. “The crux of the matter is that the government is not comfortable with M1 being the majority owner,” said one of the people familiar with the regime’s thinking.
Yoma Group, the Myanmar conglomerate involved in banking and other consumer industries that is majority owned by tycoon Serge Pun, might be interested in the stake, said one person familiar with the matter.
Yoma was a partner with Telenor in Wave Money, an e-wallet service in which the Myanmar company has been seeking to raise its stake.
Yoma declined to comment except to say that it remained “committed to Myanmar and continues to invest in the country”, adding: “We have been friendly partners with Telenor and continue to explore increasing our investment in the Wave Money joint venture.”
Myanmar’s military junta spokesperson, Zaw Min Tun, did not reply to a request for comment.
Additional reporting by Chloe Cornish in Beirut