Myanmar bid by world’s largest telcos puts user rights in play

The world’s two largest telcos, China Mobile and Vodafone, have teamed up to bid on mobile telecoms operating licenses in Myanmar, also known as Burma, offering an opportunity for Vodafone to put into practice lessons learned in respecting user rights and to help prevent abuses from taking place in the country’s newly opened market.

The first place to start would be with a due diligence and human rights assessment. China Mobile is relatively new to operating in foreign markets, and may not have the expertise to carry out such a review. This presents a chance for Vodafone to take the lead, assess the ways its users’ rights will be impacted, and work transparently with multistakeholder bodies and third party monitors to prevent abuses.

Although it operates only in China and Pakistan, China Mobile is the world’s largest telco by subscribers, with more than 700 million, while London-based Vodafone is second with around 400 million users. The two jointly were among 12 groups chosen to submit formal bids by June 3 for Myanmar’s two new 3G licenses.

Myanmar’s fast-moving telecoms market

After four decades of military rule and systematic human rights violations, including a complete internet shutdown after a violent crackdown in 2007, the country is taking tentative steps towards greater political openness and global engagement. Its political environment has slightly improved, with both a recently seated elected government and a new constitution that puts some modest limits on military participation.

It has opened bidding for two new mobile telecoms operating licenses in order to quickly update its communications infrastructure. Leaders want 80% of the population using mobile phones by 2016, a huge increase from the current telephone penetration of below 10%.

The country’s telecoms market has seen major changes in the past year. The process of buying and activating a mobile phone has long been costly and bureaucratic, resulting in low user adoption and high prices. SIM cards, needed to operate phones in most of the world, will drop in price by more than 10,000% (from nearly 200,000 kyat to 1,500, or about USD$2) following government intervention. In response to demand, state-owned telco Myanmar Post and Telecommunications sold the first 350,000 of the cheaper SIM cards through a public lottery, with more expected monthly.

Telcos from east to west are jumping to submit proposals for the two new licenses for 3G networks that have been opened to bidding in one of the few remaining untapped markets. The huge potential for growth in the country presents an opportunity for quick profits, but telcos will face the reputational and financial risks of operating in Myanmar’s still repressive political environment.

In addition to the bid by China Mobile and Vodafone, Norway’s TeleNor, Singapore’s SingTel, and India’s Bharti Airtel, South Africa’s MTN, and a consortium made up of billionaire George Soros’ investment group, Quantum Strategic Partners, and Ireland-based operator Digicell have all submitted statements of interest.

Human rights and telecoms

Many of the bidding telcos have histories of running up against human rights in their own operations.

Founded in 1999, China Mobile operates in China and since 2007 in Pakistan, and it is listed on the NYSE and the Hong Kong stock exchanges, though the Chinese government remains the majority stakeholder with more than 74% through the China Mobile Communications Corporation.

This government money and oversight comes with baggage. The experience of Chinese telecom equipment makers Huawei and ZTE, who have faced scrutiny and financial fallout in the U.S. because of unproven allegations of ties to the Chinese military may be instructive. China Mobile’s documented ties to its home government, which also happens to run the world’s most massive and sophisticated internet surveillance operation, will open the company to similar privacy and security allegations, and possibly affect its business abroad.

For its part, Vodafone’s uneven record on human rights is documented in the Access Telco Hall of Shame. The company contributed to Egypt’s massive communications shutdown in 2011, but has taken a positive leadership role in the Telecommunications Industry Dialogue and in revamping its own policies.

Access sees the proposed Myanmar partnership with China Mobile as a chance for Vodafone to test and improve its policies, starting with due diligence, and to train its partner in human rights best practices. Until 2010, the company owned a small stake in China Mobile, and may be in the best position to hold the proposed venture accountable.

Myanmar’s users are not experienced in modern telecommunications. Given the history of abuse by the country’s military, users there will need assistance not only in getting online, but in protecting their human rights to access to information, privacy, and freedom of expression. Unfortunately, telcos don’t currently have a history that inspires confidence this will be default practice. The winning bidders, whether Vodafone and China Mobile or others, must establish a record of transparent, rights-respecting operations in Myanmar, including pushback against government access, before gaining the trust of users and civil society.