Telenor’s cut-price sale of its highly successful Myanmar business due to the military coup will ensure its customers continue to have access to mobile services, but the company has refused to clarify what will happen to user data under new owners.
By EMILIE EKEBERG | FRONTIER
After building a market-leading business that generated hundreds of millions of dollars in profit a year, Telenor has walked away from Myanmar with barely $100 million in cash.
But given the political crisis in Myanmar, and the implications for mobile operators, even this was more than some analysts had expected. Revenues have collapsed since the junta ordered Telenor and other operators to shut down mobile data, and reputational risks would have scared off just as many buyers.
Frontier, in collaboration with Danish investigative outlet Danwatch, recently revealed that Telenor has been forced to provide user data such as addresses and call history to Myanmar’s military regime. Telenor has resisted pressure to give authorities direct access to monitor telephone calls, text messages and data, but last month Reuters reported that the company had received an ultimatum to install intercept software by July 5 so the authorities could spy on its users.
Telenor has consistently cited concerns about the safety of its staff – including executives, who were recently banned from leaving the country without regime permission – as justification for complying with many of the junta’s diktats.
Now the Norwegian telco is selling its Myanmar business to M1 Group, a holding company owned by Lebanon’s wealthy Mikati family. It’s a controversial choice – M1 appears on a United Nations list of firms with business ties to the Tatmadaw, and has a stake in the South African telecommunications company MTN, which has been accused of paying bribes to the Taliban and allowing surveillance of mobile phone users in Iran.
In an exclusive interview, Telenor CEO Mr Sigve Brekke said the company had been forced to sell due to concerns over employee safety and the difficulties it faced upholding good business practices under the military regime.
“Selling the company in Myanmar has not been an easy choice for us. We have evaluated absolutely all alternatives for our presence. It has not been possible to carry out an ordinary sales process,” Brekke wrote in an email.
Asked about M1 Group’s ownership in MTN, and the many controversies surrounding their business practices, he said the company was the best option for ensuring Telenor customers continue to have access to telecommunications services in the future.
Selling to M1 Group “ensures continued operation, and ensures that our 730 employees can keep their jobs and that 18 million customers can continue to access mobile services”, he added.
But it is unclear what will happen to the historical data of those customers, including call records and national IDs and passports used to register SIM cards, once the company changes hands.
Asked whether Telenor had reached an agreement with M1 on how that data would be handled, Brekke refused to give any guarantees.
“Telenor will continue to be responsible for the company until the authorities approve the transaction, after which the new owner will take over responsibility for the company, including employees, customers and licenses. For the sake of our employees’ safety, we unfortunately do not have the opportunity to comment on directives from the authorities,” he said.
The sale has been received with sharp criticism from some, including the NGO Justice for Myanmar, which has in the past praised Telenor for its business practices in Myanmar.
“The Mikati family have a track record of telecommunications investments in authoritarian contexts, including Syria and Iran, which is ominous for their takeover of Telenor. Telenor is failing in its human rights responsibilities through this rapid-fire sale to M1 Group,” said spokesperson Yadanar Maung.
“We call on Telenor and its biggest shareholder, the Norwegian government, to immediately reconsider the implications of this sale for the Myanmar people,” she said.
Professor Stein Tonnesson from the Norwegian Peace Research Institute PRIO told Norwegian outlet NRK that Telenor had “left the moral problem to a company that is unlikely to share their concerns with abiding to authorities’ instructions”.
Mr Andreas Rasche, an expert on corporate social responsibility at Copenhagen Business School, said the UN Guiding Principles on Business and Human Rights required Telenor to assess the human rights consequences of the sale.
“It is important in this situation that human rights are respected by M1 Group. Activists in Myanmar depend on human rights being upheld due to the situation on the ground,” Rasche said.
But Brekke insisted that the company had done what it could to comply with the guiding principles when selling its Myanmar business.
He said an assessment of the human rights implications had been “central” to the sales process.
“We have carefully assessed all possible alternatives, in an increasingly demanding situation, and believe that this is the best solution in the situation we are in,” Brekke said.
MTN did not respond to a request for an interview or comment on allegations it bribed the Taliban or was involved in surveillance in Iran, but has recently issued a statement rejecting allegations of support for terrorist groups in Iraq.
This article was first published in Danish by Danwatch. Emilie Ekeberg has been an investigative reporter with Danwatch since 2017 and holds an MA in business journalism from Columbia University.