Tech

Putsch in Myanmar puts Telenor in the red

On February 1st, Myanmar’s military couped to power. The military uses violence against peaceful protests and civil disobedience. Hundreds of people, including dozens of children, have now been killed. There are also battles with militias of persecuted minorities. In order to suppress freedom of expression, the dictatorship restricted access to the Internet. And that hits the network operators hard. Telenor must declare its entire cellular network in Myanmar to be worthless.

“Myanmar is seeing an irregular, unsafe and deeply worrying situation,” it will Telenor management in its press release on Tuesday, “Since the military coup on February 1, 2021, Telenor’s focus has been on employee safety, customer access to services and continued transparency.” That is not easy, however, as the military has even forbidden to publish its own orders concerning communication networks.

In the wake of the military coup, the Internet and telephone lines were cut in Myanmar. When internet access was possible again, the coup plotters blocked services such as Facebook and Whatsapp. Shortly thereafter, Myanmar’s military completely blocked mobile internet – for some time. Since April 1, wireless Internet access, apparently blocked again, including WLAN. Wired connections work from 9 a.m. to 1 a.m., but they are not widely used. There is also censorship there.

“Telenor calls on the authorities to restore unhindered communication immediately and to respect the right to freedom of expression and human rights,” Telenor writes, but sees little cause for hope: “Due to the worsening prospects for the economic environment and the worsening security and human rights situation we see limited perspective for improvement. ”

As a result, management is forced to write down the entire value of its nationwide cellular network in Myanmar to zero. This translates into 6.5 billion Norwegian kroner (around 650 million euros). This resulted in a quarterly net loss of 3.9 billion crowns (389 million euros). One euro is equivalent to about ten kroner.

Telenor Myanmar had 18.2 million customers at the end of March, 22 percent fewer than a year earlier. The network blocks are of course also depressing sales and EBITDA (earnings before interest, taxes, depreciation and amortization), which have each fallen by around 28 percent.

Telenor operates telecommunications networks in Scandinavia (Norway, Sweden, Denmark and Finland) and Asia (Thailand, Malaysia, Bangladesh, Pakistan and Myanmar). In Sweden, the group has been operating its own mobile network since 2005. At that time Telenor paid one billion euros for Vodafone Sweden. In the most recent quarter, revenue from rental fees and traffic declined everywhere except Finland and Denmark – but nowhere near as much as in Myanmar.

Group sales fell by 6.3 percent year-on-year to 28.9 billion crowns, and EBITDA by 6.7 percent to 12.9 billion crowns. After an operating profit of 6.6 billion crowns in the first quarter of 2020, there is an operating loss of 632 million crowns this time. And if there was a net profit of 698 million kroner a year ago, there is now a net loss of 3.9 billion kroner caused by Myanmar. Of course, the depreciation does not have an immediate effect on the cash balance, so Telenor can report a free cash flow of 3.8 billion crowns (+ 5%).

Read about the military coup in Myanmar at telepolis: Deja vu in Myanmar


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