Telenor goes into red as it writes off $782m from Myanmar
Telenor has written off its Myanmar business for the first quarter of 2021, because of the military takeover, plunging the whole group into loss.
The group reported a net loss of 3,889 million Norwegian kronor (US$468 million) for the first quarter of the year, compared with a profit of 698 kronor ($84 million) in the same period of 2020.
“Since the military coup on 1 February 2021, Telenor’s focus has been on the safety and security of our employees, access to services for customers and continued transparency,” said president and CEO Sigve Brekke (pictured) this morning.
“Prolonged mobile internet restrictions have severely impacted the people of Myanmar and the country’s economy, illustrating the importance of connectivity services.”
Brekke, who was head of Telenor’s Asian region in 2013 when it won one of two Myanmar licences, added: “Telenor calls on the authorities to immediately reinstate unimpeded communications and respect the right to freedom of expression and human rights.”
He warned: “Due to the worsening of economic and business environment outlook and a deteriorating security and human rights situation, we see limited prospects of improvement going forward. Based on this, we have fully impaired Telenor Myanmar with an amount of NOK 6.5 billion [$782 million] in the quarter.”
Telenor reported that its mobile subscriber base had grown by 5 million in the quarter, including 2 million added in Myanmar, to reach 187 million at the end of the quarter.
Decrease in operating profit due to the impairment of Telenor Myanmar and higher taxes were only partly offset by positive development in net financial items, said the company.
In Myanmar, “due to the worsening of economic and business environment outlook and a deteriorating security and human rights situation, we see limited prospects of improvement going forward”.
Telenor and Qatar’s Ooredoo both won a strong competition in 2013 for Myanmar’s new licences. Since then the country — formerly known as Burma — has awarded two further licences: one to MPT-KSGM, a partnership of Myanmar Posts and Telecommunications (MPT) and KSGM, whose ultimate ownership is held by KDDI and Sumitomo; and the other to Mytel, 48% owned by the army, which seized power back from the democratically elected government earlier this year, in a joint venture with Viettel, which is controlled by Vietnam’s ministry of defence.