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US investment to expand reach of telcos

File photo of a telecommunications tower in Burma. (Photo: Apollo Towers Myanmar Ltd.)

The US government’s development finance institution has launched operations in Burma with a US$250 million loan to a telecoms company, it said on Wednesday.

The Overseas Private Investment Corporation (OPIC) will lend the money to Rangoon-based Apollo Towers Myanmar Limited, which is focused on the construction and maintenance of telecommunications towers.

“OPIC is pleased to be working with Apollo on this first, important investment in Burma,” Elizabeth Littlefield, OPIC president and chief executive said in a statement.

“Telecommunications are a critical part of ongoing development across the world, and through this project, OPIC is looking to have a significant impact on those who previously lacked access to telecommunications coverage in the country.”

The liberalization of telecoms under the previous government of President Thein Sein was one of the most successful reforms enacted by his administration, which in 2011 ended 49 years of direct military rule in Burma.

Norway’s Telenor and Qatar’s Ooredoo broke up a state monopoly on telecoms when they won operating licenses in 2013.

In the face of new competition, Myanmar Posts and Telecommunications (MPT), the state-owned provider, has partnered with Japan’s KDDI Corp and Sumitomo Corp to bolster its operations.

SIM cards now cost a few dollars, down from hundreds, and Burma’s mobile penetration jumped to just over 60 percent, but remains well behind other countries in the region.

Apollo has put up about 1,800 telecoms towers, OPIC said, and has plans to build an additional 2,000 as operators look to expand beyond urban centers.

About 70 percent of Burma’s 51.5 million people live in rural areas, according to the United Nations, but basic infrastructure in much of the country is greatly lacking.

“I think the sector is very, very vibrant,” said Thura Ko Ko, senior adviser to the US private equity firm TPG, which has invested in Apollo.

“There is already congestion in some areas, but more importantly none of the telcos or tower companies have reached the outer regions of our country,” Thura Ko Ko told Reuters.