Singapore Windsor Holdings, acting through its Burmese subsidiary, has won a $45 million contract to build and lease 500 telecommunication towers for Qatar-based Ooredoo, the developer announced last Friday.
This is Singapore Windsor’s first deal in Myanmar, and one that the company sees as a strong foundation to expand from in one Asia’s recently opened frontier market.
“Securing this contract marks a great starting point of our telecommunication services business in Myanmar,” said Mark Bedingham, president and chief executive officer of Singapore Windsor.
“The rapid growth of Myanmar’s telecommunication industry will accelerate more investments towards better networks and better services. And we are delighted to have reached an agreement with Ooredoo, the only full 3G operator in Myanmar.”
A Singapore Stock Exchange filing quoted the value of the contract at $39 million, based on the cost of construction.
The company is required to give a total funding commitment of up to $45 million to Ooredoo. The firm said the funding commitment would be financed through a combination of bank loans and vendor financing as well as private placement of shares.
Construction and installation works, due to start on July 1st, are to be completed within 18 months.
Under the terms of the contract, Singapore Windsor Holdings will lease and manage the 500 telecommunications tower units on behalf of Ooredoo for a 15-year term, which may be extended for a further three terms of five years each at Ooredoo’s discretion.
Singapore Windsor said the telecommunications towers are specifically designed and configured to allow for further rentals to third party mobile network operators, who can be added as tower co-location lessees.
There are three mobile network operators currently in Myanmar, namely Ooredoo, MPT (a state-owned entity which also counts Japan's Sumitomo Corporation and KDDI as shareholders) and Norwegian telecoms group Telenor.
Ooredoo and Telenor received 15-year licenses to operate in the country back in 2013, and part of the licence requirements is to meet population and geographical-coverage targets as well as offer low initial subscription fees, according to local press reports.
Myanmar’s market is still seen as largely under-developed, with international reports placing levels of mobile penetration far lower than Laos’s 87 percent and Cambodia’s 70 percent.
The contract provides for the construction of a tenth of the country’s current number of towers. However, multilaterals such as the IFC have been reported suggesting that 17,000 extra towers in the year to come would only allow to cover about 70 percent of the population, creating a significant opportunity for private parties capable of filling the gap.