Telenor Group, the major shareholder in Thailand's Total Access Communication Plc (DTAC), is embarking on a US$1-billion investment to roll out its commercial second- and third-generation mobile service in Myanmar this year.
Brekke: Committed to investing in Thailand
The Norwegian firm is strengthening its strong presence in Asia, its largest revenue source.
Sigve Brekke, the head of Telenor Asia, said his company is spending $1 billion for the mobile licence and network expansion under a four-year plan.
The company expects to launch commercial 2G and 3G service in Myanmar in the second half of this year, with a roll-out of cellular network coverage to 90% of the population within five years.
"We expect to break even within four years," Mr Brekke said.
Myanmar has only 4-5 million mobile users out of a population of 61 million.
Telenor and Qatari firm Ooredoo were the winners of 15-year mobile licences in a highly competitive tender.
Mr Brekke said Myanmar presents a huge opportunity as an untapped market, but Thailand remains the most important market for Telenor, as DTAC contributes the largest revenue in Asia to the group.
DTAC has outperformed the market with healthy growth in recent years, capturing 30% of the market last year, up from 29% in 2012. The mobile market was worth 250 billion baht last year.
The company reported a 13% increase in full-year revenue to 89.5 billion baht last year thanks to the take-up of mobile data services, which led to a 49.2% increase in revenue from value-added services to 15.2 billion baht.
But net profit declined by 4.5% to 11.3 billion baht due mainly to an increase in DTAC's percentage of revenue-sharing payments from 25% to 30% under a build-transfer-operate concession agreement, plus weaker margins in DTAC's handset business.
DTAC had 27.9 million subscribers last year.
Mr Brekke said Telenor is committed long-term investment in Thailand.
"We are not holding back investment from Thailand even though the political situation remains uncertain," he said
Telenor already provides mobile services in 13 countries including six in Asia, serving 150 million subscribers worldwide.
To strengthen its presence in Thailand, Telenor yesterday launched the DTAC Accelerate venture capital fund worth 100 million baht.
The fund aims to push Thai start-ups to go global as well as create new jobs and income locally, promote mobile internet and applications and develop the country's growing mobile internet ecosystem.
The fund is to invest in technology start-up firms worth from 500,000 to 1.5 million baht each.
Mr Brekke said Telenor chose to set up the fund in Thailand because the country's smartphone penetration is more than 50% and mobile internet use has extraordinary growth.