Myanmar’s military junta has approved the sale of Norwegian telecoms operator Telenor’s business in the country to a Lebanese investment group after months of wrangling over the deal following the military coup early last year.
The move comes as some relief to state-controlled Telenor, which has been caught in a stalemate between the regime and campaigners worried about the impact of the company’s departure on human rights. It will be a bitter pill to activists fighting against the Myanmar government, who have viewed the sale as an abandonment by Norway.
Before deciding to exit the country, Telenor was widely seen as the telecoms operator in Myanmar most committed to human rights and transparency, challenging some junta demands and making them public.
Telenor announced in July it was selling its local operations to M1 Group, a sprawling investment company founded by Lebanese prime minister Najib Mikati and his brother, for $105mn. Telenor said on Friday that M1 had informed the group that its local partner Shwe Byain Phyu, a Myanmar conglomerate, would own 80 per cent of the business following the transaction.
Sigve Brekke, chief executive of Telenor, told the Financial Times it was a “sad day” and he was “deeply concerned” for the people of Myanmar, but the “only choice we had was to sell our operations”.
“I hope that we get people to understand that the battle for customer security was lost the day the military took over,” he said, adding that the company faced an impossible situation after it was refused the right to allow foreign employees to leave and was asked to use phone interceptive equipment, contravening international law.
“It is impossible for us to stand up against the military. It is a war situation in the country,” Brekke said. “If we want to keep our employees safe and operate in a responsible way, it would be impossible for us to do that on the ground right now.”
At the time the deal was originally announced, Telenor was facing difficulty continuing its operations after the junta killed or jailed thousands of people and forced the company and other telecoms groups operating in the country to cut off mobile and internet services in Myanmar.
Late last year, Myanmar’s military leaders rejected the sale on the grounds that they wanted Telenor to sell to a local company rather than M1.
In a statement about the now-approved deal, Telenor said that “the regulatory approval requires that M1 ensures a local majority owner after the closing of the transaction between Telenor and M1”.
The sale has faced heavy backlash from Myanmar-based rights groups which submitted a complaint to the OECD last year alleging that the Norwegian company had “irresponsibly disengaged from its Myanmar operations”, accusing it of failing to conduct appropriate due diligence and failing “to seek to prevent or mitigate adverse human rights impacts to its customers potentially arising from the sale of its Myanmar operations”.
The complaint was issued by the Amsterdam-based Centre for Research on Multinational Corporations, a non-profit group, on behalf of 474 anonymous civil society organisations, which feared repercussions from the military government.
Joseph Wilde-Ramsing, a senior researcher at the body, said the “dangerous sale” was “a real kick in the gut to the millions of users who were convinced by Telenor’s sales pitch” and criticised the change of control of sensitive data.
Azmi Mikati, chief executive of M1 Group, said the company was committed to conducting “business in Myanmar purposefully to benefit the people of Myanmar, who rely on communication services as a vital function of their lives”.
“M1 Group has always, and will always, remain committed to upholding human rights, respecting the laws of the countries it operates in while advocating for consumer protection regulations,” he said in a statement.
Telenor was first granted a licence to operate in Myanmar in 2013 but wrote off its entire investment of about $780mn in the country in May 2021 after General Min Aung Hlaing’s junta took down Aung San Suu Kyi’s government.