The Myanmar Times
Tuesday, 29 July 2014
The Myanmar Times
The Myanmar Times

Govt releases national telco license documents

The government committee in charge of tendering two national telecommunications licenses released a document last week that will likely set off a flurry of negotiation between interested bidders in the coming week, a foreign law firm said on March 23.

The Telecommunications Operator Tender Evaluation and Selection Committee released the “Pre-qualification Questions and Answers” document on the Ministry of Communications and Information Technology’s website on March 21.

VDB Loi, a specialised law and tax advisory firm that has more than 60 transactional lawyers and tax advisers working in offices across Southeast Asia and including Myanmar released an analysis of the document on March 22 pointing to a number of key clarifications the document makes for potential bidders.

VDB Loi partner Mr Edwin Vanderbruggen, who helped to write the analysis, said the required experience component of bids “is a hard and fast rule”.

“The committee will not be flexible on the operational requirements for the experienced operator [four million subscribers in one country, one million subscribers in a second country]. In the Q&A, the committee rejected to accept … secondary experience of one million subscribers in two countries,” the analysis states.

Mr Vanderbruggen said it was likely that the intention of rigidly sticking to the required experience component was a “practical” consideration to reduce the number of bidders in the pool.

“Look at the practical side of this,” he said on March 23. “Tender envelopes will be opened on April 4 and then published on April 11. In those six or seven days they [the committee] is going to have to make all these evaluations. If the committee is not strict on its requirements they cannot get this done.

“The committee wants to mechanically eliminate a whole group of interested parties and work with whoever is left,” he said.

However, the Q&A also contains a few surprises, Mr Vanderbruggen said.

“I was surprised to see the international gateway … [and] internet services announced as being part of the license because it wasn’t in the prequalification documents,” he said.

VDB Loi’s analysis states: “The license will include network, ISP, international interconnection and gateway: the committee confirmed that the license shall grant the holder the right – but put them under no obligation – to provide both fixed line and mobile services. The licensee will also have the ability to provide internet services. International gateways will also be allowed.”

Another key clarification is that bids cannot be changed later or the bid will be immediately ruled out.

“No changes to the consortium in midstream: one cannot put in a bid alone if one was pre-qualified as part of a consortium. One cannot put in a bid with a consortium if one was pre-qualified as a member of another consortium,” the analysis said.

Mr Vanderbruggen said the no change rule would lead to a rush of activity in the next 10 days.

“I think that everybody is now in a heightened state of activity” as consortium partners rush to finalise deals, he said.