The Lebanese investment firm M1 Group has pledged to spend US$330 million over the next three years to expand the Myanmar telecom business that it is buying from Telenor of Norway, bucking moves by many international investors to exit the junta-ruled country.
The funds will be used for network expansion, broadband infrastructure and services, M1 Group chief executive officer Azmi Mikati said in an interview.
The Telenor Myanmar sale was agreed to in July for $105 million. Pending regulatory approval, it will give the Beirut-based group control of one of Myanmar’s four main telecom operators, with 19 million customers in the country of 55 million people.
“Rather than shying away from challenging environments, we are committed to supporting the people who live in them with world-class service, regardless of the political situation,” Mikati said. “Telecommunications is an essential service, especially in challenging circumstances.”
M1 Group is a holding company of the billionaire Mikati family, which includes Najib Mikati, Lebanon’s prime minister-designate. It has investments in the South Africa-listed telecom firm MTN Group, the fashion retailer Pepe Jeans and property in New York, London, Dubai and Beirut, according to its website. It also holds a stake a telecom-tower operator in Myanmar.
“Willingness, or rather readiness, to work in some of the world’s most challenging markets today is part of our mission,” said Azmi Mikati, 49.
The military toppled Myanmar’s civilian government led by Aung San Suu Kyi in February. The impact on the economy has been profound, with forecasters predicting GDP could shrink by at least 10% this year.
Telenor decided to exit Myanmar partly because it did not want to abide by orders from the military junta to install spyware that could monitor individuals’ mobile phone and internet activity.
“The situation in Myanmar has over the past months become increasingly challenging for Telenor for people security, regulatory and compliance reasons,” Telenor CEO Sigve Brekke said in a statement when the sale was announced.
The Norwegian company in May declared its Myanmar unit, set up in 2014, “fully impaired” and wrote down 6.5 billion kroner ($750 million).