Since the Myanmar military ordered telecommunications operators to shut down their networks in an attempt to end protests against the February coup, Telenor’s business there has been unknown.
As one of the few Western companies to bet on the Southeast Asian country since it left the military dictatorship a decade ago, a return to military rule led to a write-off of $ 783 million this week for Norway̵
The state-controlled Norwegian company, one of Myanmar’s largest foreign investors, must now decide whether to exit the turmoil or withdraw from a market that contributed 7% of its profits last year.
“We face many dilemmas,” Telenor CEO Sigwe Breke told Reuters this week, highlighting the acute problems facing international companies under heightened surveillance over their exposure in Myanmar, where hundreds were killed in protests against the February 1 coup. .
While Telenor plans to stay for now, the future is uncertain, Breke said in a video interview.
Although Telenor had won praise for supporting what was a nascent democracy at the time, activist groups have long expressed concerns about business ties with the military, which have intensified since the military took control of the country.
Chris Sidoti, a UN expert on Myanmar, said Telenor should avoid payments such as taxes or royalties that could fund the military directly or indirectly, and that if it could not be established whether Telenor was “doing more good, than harm “in Myanmar, then it must be withdrawn.
However, Espen Bart Eide, who was Norway’s foreign minister when Telenor was licensed in Myanmar in 2013, told Reuters that Telenor should stay and use its position as an established foreign company to be bright. critic of the military.
A spokeswoman for the Norwegian Ministry of Trade, Industry and Fisheries, which represents the Norwegian government as a shareholder, said on Thursday that “in the current circumstances, Telenor is facing several dilemmas in Myanmar.”
“From a corporate governance perspective, the investment in Myanmar is the responsibility of the company’s board of directors and management. In this context, the ministry, as a shareholder, maintains a good dialogue with Telenor on the situation,” the spokesman said in an e-mail to Reuters.
The Myanmar junta, which said it had seized power because its repeated complaints of election fraud last year had been ignored by the election commission, accused protesters and the former ruling party of inciting violence.
And on March 23, she said she had no plans to remove network restrictions. She has not commented on the curbs or responded to Reuters calls Thursday.
Telenor is no stranger to operating under military rule in both Pakistan and Thailand, where it has challenged the Thai junta over an order blocking access to social media.
At about the same time, Telenor registered its first customers in Myanmar.
Its chief executive, John Fredrik Baksaas, told Reuters that Telenor had thought “a lot” about the risk of Myanmar’s experiment with democracy not continuing.
“But then we argued that when we get into a Western company that supplies telecommunications to a country, we also stand with some responsibility and little guarantee that things are being done right,” Baksaas said.
His position has received international support since Barack Obama became the first US president to visit Myanmar in 2012, a year after the official dissolution of a military junta and the formation of a quasi-civilian government.
For its part, the Norwegian government, which owns most of Telenor, has long supported democracy in Myanmar by hosting radio and television stations that report on it under military rule.
And in 1991, the Norwegian Nobel Committee awarded the Nobel Peace Prize to Aung San Suu Kyi, who spent 15 years under house arrest in Myanmar before leading a civilian government that retained power in last year’s election.
Suu Kyi was detained after the coup and charged with crimes that her lawyers say were fabricated.
While Norway supported Telenor’s initiative in Myanmar, the government also warned of the risks, said Bart Eide, Norway’s foreign minister at the time.
“We told them that this is a complex country with a brutal military dictatorship. Telenor was very aware of this … It’s not like they are newcomers,” he added.
Telenor was one of two foreign operators licensed in 2013, along with Qatari’s Ooredoo (ORDS.QA). The other operators in Myanmar are MPT and Mytel, which are part of a military-owned company.
About 95% of Telenor’s 187 million customers worldwide are in Asia, and Myanmar has about 18 million customers serving a third of its 54 million people.
“WITHOUT DIRECT LINKS”
For Telenor, doing business in Myanmar had its challenges, including trying to avoid trade ties with the military.
Former CEO Baksaas said that in the first few weeks after starting operations in Myanmar, employees have to sit on the floor in the office because Telenor refuses to pay bribes to customs officials for furniture he has imported.
He also said they need to focus on the risks of corruption when acquiring land to build mobile towers.
At the time, there was work with the military, whose economic interests ranged from land to mining and banking companies. The military has faced allegations of human rights abuses, including the persecution of minorities and the forcible suppression of decades-long protests. He has repeatedly denied such allegations.
The Justice for Myanmar activist group said in a report in 2020 that Telenor had shown an “alarming failure” in a proper human rights review due to a 2015 deal to build mobile towers involving a military contractor.
Another UN report in 2019 said Telenor was renting offices in a building built on military land.
The report says companies in Myanmar must cut off all ties to the military due to human rights abuses.
A Telenor spokesman said in an email on April 9, when asked by Reuters, that he had considered the 2015 deal without explanation, and that his choice of office was “the only viable option” given factors such as safety.
“Telenor Myanmar is focused on minimal military exposure and has no direct link to military-controlled structures,” the spokesman said.
After the coup, Telenor cut ties with three suppliers after finding ties with the military, the spokesman added.
On the day of the coup, the military ordered Telenor and other operators to shut down the networks. Telenor criticized the move, but agreed. Services were allowed to resume, but there have been periodic requests to close since then, and mobile internet has been closed since March 15th.
Ooredoo also said it “unfortunately complied” with the directives to limit mobile and wireless broadband in Myanmar, which reached first-quarter revenue. He declined to comment further on the prospects for his business in Myanmar.
Like other operators, Telenor paid royalties to the government, already controlled by the military, in March, which critics say could help fund repression of the public protest.
In an email to Reuters, Telenor said it had made the payment “in strong protest of recent events”.
One of its main shareholders, Norway’s KLP, said it had held a dialogue with Telenor after the coup to ensure it identified human rights risks.
“This is a challenging situation because Telenor cannot choose what it can and cannot do. They receive their instructions from the authorities,” said Kieran Aziz, senior analyst for responsible investments at KLP. “It is difficult to assess how positive Telenor’s contribution is in this context.”
Weighing human rights is just one of the dilemmas Telenor faces, CEO Breke said, along with safely serving its customers and maintaining network access for them.
“We work on this balance every day,” he said.
And although for now this balance is inclined to Telenor’s stay in the country, this is not a given.
“We are making a difference, as we have done since we arrived. But because the situation is so unpredictable, in many ways it is impossible to speculate about the future and how this will develop, “Breke added.
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