BANGKOK, January 21, Reuters -- Lebanon's M 1 Group will partner with a Myanmar firm to take over Norwegian telco Telenor's business in the southeast Asian country after its military junta sought a local buyer, three sources familiar with the matter told the matter.
Telenor, one of the biggest foreign investors in Myanmar, said in July it was selling its operations there to M 1 Group for $105 million, retreating from a country that has slid into chaos after a military coup in February last year.
Its exit has been hampered by the junta, which is putting pressure on telecom and internet companies to install surveillance technology and bars senior executives from leaving the country.
Military leaders last year rejected the sale solely to M 1.
The three sources said that the partnership between M 1 Group and Myanmar's Shwe Byain Phyu Group was privately approved. Two of the sources said Shwe Byain Phyu would be the majority shareholder. They didn't want to be identified because of the sensitivity of the matter.
Shwe Byain Phyu is a group of companies with interests in gem mining and petrol stations. The chairman, Thein Win Zaw, is a director of Mahar Yoma Public Company, part of a consortium that has a stake in military-owned telco Mytel, according to corporate records. He didn't respond to a request from Reuters for comment on the sale and his links to the military.
An October order from the office of junta leader Min Aung Hlaing, seen by Reuters, prompted officials at the Ministry of Transport and Communications to reject the sale of M 1 Group, which is owned by the family of Lebanese Prime Minister Najib Mikati.
The junta favoured a local buyer, according to sources familiar with the matter.
Representatives of M 1 Group, based in Beirut, did not immediately answer phone calls from Reuters seeking comment. A junta representative did not respond to requests for comment.
One person briefed on the matter said it was not conveyed to Telenor and the decision was not made public.
A spokesman for Telenor said it was waiting for a response to its application for regulatory approval of the sale and declined to comment further.
In November, Reuters reported that several Myanmar firms had expressed interest in buying Telenor Myanmar operations and that M 1 had held talks with Shwe Byain Phyu about a partnership.
The two firms proposed to take over the Telenor unit that was accepted by the junta leadership a month later, according to industry sources.
Two of the sources said the new venture would be named Atom.
Activists have expressed concerns that Telenor's exit could further the junta's surveillance of the population. It is one of four telecom operators in Myanmar, along with Qatar's Ooredoo State-backed MPT and Mytel, which is part-owned by a military-linked company.
The Activist group Justice for Myanmar called on Telenor to suspend the sale.
A conglomerate with known links to the Myanmar military, the fact that Shwe Byain Phyu is a buyer deepens the risk to the Myanmar people, whose personal data is exposed through the sale, a spokeswoman for Yadanar Maung told Reuters.
Telenor said its handover would include all assets, including call data records, in accordance with licence obligations.
In the months before the coup, telecom and internet service providers were secretly ordered to install intercept technology, which would allow the army to eavesdrop on the communications of citizens, according to a report by Reuters.
Telenor pulled out of the country in September to avoid European Union sanctions after continued pressure from the junta to activate the technology.
Since the Feb. 1 coup, Myanmar security forces have killed more than 1,400 people and arrested thousands to try to crush opposition, the non-governmental organisation Assistance Association for Political Prisoners said.
The military seized power after it claimed widespread fraud in a November 2020 election won by a landslide by the civilian government led by Aung San Suu Kyi. There were no major irregularities with the vote, according to international and local monitoring groups.
The junta has imposed nationwide and regional shutdowns of mobile data, making it harder for democracy activists to organise protests. Senior foreign telecom executives were not allowed to leave the country without permission in July, because of a confidential order issued by the government in July.