Telenor’s difficult exit from Myanmar after a military coup has hurt investors’ views on its remaining Asian assets, according to the Norwegian telecom company’s chief executive.
Sigve Brekke told the Financial Times that the state-controlled group is carving out its Asian assets – comprising Bangladesh, Pakistan, Thailand and Malaysia – into a separate unit to allow it to pursue strategic options that could include in a merger.
“Myanmar is a significant part of Telenor’s market capitalization value. This affects investors’ perceptions of our assets in Asia. This is another reason why we are positioning ourselves differently in Asia . We’re better able to manage risks going forward,” he said.
He added that he “doesn’t want to speculate” whether Telenor will be in Asia in five years’ time, unless through joint ventures with local partners.
Asia has been a tough hunting ground for western telecom operators with many, such as BT and Telia, being forced to leave. Some analysts have urged Telenor to exit Asia, where it has about 95 percent of its customers, to focus only on the Nordic landscape.
The Norwegian operator underwent a bruising departure from Myanmar after the coup in 2021, finally getting permission from the authorities to sell its business to a Lebanese investment group last year.
Brekke said at the time that the company was in an impossible situation after being denied the right to allow foreign employees to leave and being asked to use interceptive telephone equipment, in violation of international law. However, human rights activists and campaigners have strongly criticized its abandonment, considering it an abandonment of Norway.
More than a year in Brekke said: “I was sad to know that we had to leave Myanmar. Myanmar is both income and a place where we see we can make a difference. We thought we didn’t have any alternative. We choose the least bad option. “
He added that it is a challenge to maintain the safety of its workers and customers while facing demands from the junta. “When you have principles, there is a cost. We have a very clear principle of keeping our people safe and our customers safe. We never turned on any listening devices,” he said.
Telenor has been in Asia for a quarter of a century and Brekke spoke of the amount it has made. He said that Telenor took as much dividend as it invested in the continent – about NKr65bn ($6.3bn), and estimated that the value of the group’s listed Asian companies and the book value of its Pakistan business was about NKr100bn, compared to the NKr180bn total market capitalization for the group.
The Norwegian operator recently completed mergers in Malaysia and Thailand, making the new companies the number one player in each country to go along with its similar position in Bangladesh. It is currently exploring all options, including a sale in Pakistan.
An attempt to merge Axiata’s entire Asian business in Malaysia in 2019 broke down. Brekke said he has been working on possible deals for business in Asia since then but they are structurally complex and take a long time to complete, adding that he has visited the region about 60 times during that time.
There are potential deals closer to home, too. The Financial Times reported last month that CK Hutchison, the Hong Kong-listed conglomerate, was in talks with the Norwegian group about merging their businesses in Denmark and Sweden. Telenor also sold 30 percent of its Norwegian fiber business to a consortium led by KKR in February.