© Reuters. FILE PHOTO: Telenor flag flutters subsequent to the firm’s headquarters in Fornebu, Norway, June 1, 2017. REUTERS/Ints Kalnins/File Photo
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By Victoria Klesty, Gwladys Fouche and John Geddie
OSLO (Reuters) – Since Myanmar’s army ordered telecoms operators to close their networks in an effort to finish protests towards its February coup, Telenor’s enterprise there was in limbo.
As one in every of the few Western corporations to wager on the South East Asian nation after it emerged from army dictatorship a decade in the past, the return to military rule led to a $783 million write-off this week for Norway’s Telenor.
The Norwegian state-controlled agency, one in every of the largest international traders in Myanmar, should now determine whether or not to experience out the turmoil, or withdraw from a market which final 12 months contributed 7% of its earnings.
“We are facing many dilemmas,” Telenor Chief Executive Sigve Brekke informed Reuters this week, highlighting the stark issues dealing with worldwide companies below elevated scrutiny over their publicity in Myanmar, the place a whole lot have been killed in protests towards the Feb. 1 coup.
While Telenor plans to remain for now, the future is unsure, Brekke stated in a video interview.
Although Telenor had gained reward for supporting what at the time was a fledgling democracy, activist teams have lengthy voiced considerations about enterprise ties to the army, which have intensified since the military retook management of the nation.
Chris Sidoti, a United Nations skilled on Myanmar, stated Telenor ought to keep away from funds similar to taxes or licence charges that might fund the army instantly or not directly, and that if it can’t be independently decided that Telenor is “doing more good than harm” in Myanmar, then it ought to withdraw.
However, Espen Barth Eide, who was Norway’s international minister at the time Telenor gained a licence in Myanmar in 2013, informed Reuters that Telenor ought to keep and use its place as a well-established international agency to be a vocal critic of the army.
A spokeswoman for Norway’s Ministry of Trade, Industry and Fisheries, which represents the Norwegian authorities as a shareholder, stated on Thursday that “under the current circumstances Telenor faces several dilemmas in Myanmar”.
“From a corporate governance perspective the investment in Myanmar is a responsibility of the company’s Board and Management. Within this framework the Ministry as a shareholder keep a good dialogue with Telenor regarding the situation,” the spokeswoman added in an emailed response to Reuters.
The Myanmar junta, which has stated it seized energy as a result of its repeated complaints of fraud in final 12 months’s election have been ignored by the election fee, has blamed protesters and the former ruling celebration for instigating violence.
And it stated on March 23 that it had no plans to raise community restrictions. It has not commented on the curbs since and didn’t reply Reuters calls on Thursday.
NEW MARKET
Telenor isn’t any stranger to working below army rule in each Pakistan and Thailand, the place it challenged the Thai junta over what it stated was an order to dam social media entry.
At round the identical time, Telenor was signing up its first prospects in Myanmar.
Its then-CEO, Jon Fredrik Baksaas, informed Reuters that Telenor had thought “a lot” about the threat that Myanmar’s experiment with democracy may not final.
“But we argued at that time that, when we get in a western company that delivers telecommunication in a country, we stand also with some responsibility, and a bit of a guarantee that things are done correctly,” Baksaas stated.
Its place had help internationally at the time after Barack Obama turned the first U.S. President to go to Myanmar in 2012, the 12 months after a army junta was formally dissolved and a quasi-civilian authorities put in.
For its half, the Norwegian authorities, which owns a majority of Telenor, had lengthy supported democracy in Myanmar, internet hosting radio and TV stations reporting on it below army rule.
And in 1991, the Norwegian Nobel Committee gave the Nobel Peace Prize to Aung San Suu Kyi, who spent 15 years below home arrest in Myanmar earlier than main a civilian authorities which retained energy in final 12 months’s election.
Suu Kyi was detained after the coup and charged with offences that her attorneys say are trumped up.
While Norway was supportive of Telenor’s Myanmar enterprise, the authorities additionally warned of the dangers, Barth Eide, Norway’s international minister at the time, stated.
“We told them that it’s a complicated country which had a harsh military dictatorship. Telenor was very much aware of it … It’s not like they were novices,” he added.
Telenor was one in every of two international operators granted licences in 2013, alongside Qatar’s Ooredoo. The different operators in Myanmar are state-backed MPT and Mytel, which is part-owned by a military-linked firm.
About 95% of Telenor’s 187 million prospects worldwide are in Asia and it has round 18 million prospects in Myanmar, serving a 3rd of its 54 million inhabitants.
(Graphic: Telenor subscribers worldwide, https://ift.tt/3eY99Wh)
(Graphic: Telenor’s earnings in Myanmar, https://ift.tt/3b9AxQa)
‘NO DIRECT LINKS’
For Telenor, doing enterprise in Myanmar had its challenges, together with making an attempt to keep away from business ties to the army.
Former CEO Baksaas stated for the first couple of weeks after it started operations in Myanmar, workers needed to sit on the workplace flooring as a result of Telenor refused to pay bribes to customs officers for furnishings which it had imported.
He additionally stated they needed to navigate corruption dangers when buying land to construct cellular towers.
Then there was coping with the army, whose financial pursuits vary from land to companies concerned in mining and banking. The army has confronted allegations of human rights abuses together with persecuting minorities and violently suppressing protests going again a long time. It has repeatedly denied such allegations.
Activist group Justice for Myanmar stated in a 2020 report that Telenor had proven “an alarming failure” in its human rights due diligence over a deal struck in 2015 to construct cellular towers that concerned a army contractor.
Another report by the United Nations in 2019 stated Telenor was renting workplaces in a constructing constructed on military-owned land.
The report stated companies in Myanmar ought to finish all ties with the army because of human rights abuses.
A Telenor spokesperson stated in an electronic mail on April 9 responding to Reuters questions that it had addressed the matter of the 2015 deal, with out elaborating, and that its alternative of workplace was “the only viable option” given components like security.
“Telenor Myanmar has been focused on having minimal exposure to the military and have no direct links to military-controlled entities,” the spokesperson stated.
Since the coup, Telenor has reduce ties with three suppliers after discovering hyperlinks to the army, the spokesperson added.
BALANCING ACT
On the day of the coup, the army ordered Telenor and different operators to close down networks. Telenor criticised the transfer however complied. Services have been allowed to renew however there have been intermittent requests to shut since, and the cellular web has been shut since March 15.
Ooredoo has additionally stated it “regretfully complied” with directives to limit cellular and wi-fi broadband in Myanmar, which hit its first quarter earnings. It declined additional remark on the outlook for its Myanmar enterprise.
Like different operators, Telenor paid license charges to the now military-controlled authorities in March, which critics argue might assist it finance repression of public protest.
Telenor stated in the emailed response to Reuters that it made the cost “under strong protest against recent developments”.
One of its main shareholders, Norway’s KLP, stated it had been in a dialogue with Telenor after the coup to make sure it was figuring out the human rights dangers.
“It is a challenging situation because Telenor cannot choose what it can and can’t do. They get their directives from the authorities,” stated Kiran Aziz, senior analyst for accountable investments at KLP. “It is difficult to assess how positive Telenor’s contribution can be in this context.”
Weighing up human rights is only one of the dilemmas Telenor now faces, stated CEO Brekke, alongside safely serving its prospects and sustaining community entry for them.
“We work on that balance every single day,” he stated.
And though that stability, for now, is tilted to Telenor staying in the nation, it’s not a given.
“We make a difference like we have done since we arrived. But with the situation being this unpredictable, it is impossible in many ways to speculate about the future and how this will develop,” Brekke added.
Source Link – www.investing.com
source https://infomagzine.com/military-coup-puts-telenors-future-in-myanmar-on-the-line-by-reuters/
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