Telenor says bruising Myanmar exit helped prompt rejig of Asia business

Telenor’s difficult exit from Myanmar after the military coup has hurt investors’ views of the rest of its Asian assets, according to the Norwegian telecoms company’s chief executive.

Sigve Brekke told the Financial Times that the state-controlled group had carved out its Asian assets — consisting of Bangladesh, Pakistan, Thailand and Malaysia — into a separate unit to allow it to pursue strategic options that could include a merger.

“Myanmar was quite a significant part of the value in Telenor’s market capitalisation. It affected investors’ views on our Asian assets. This is another reason why we are setting ourselves up differently in Asia. We are better able to handle risks going forward,” he said.

He added he “did not want to speculate” on whether Telenor would be present in Asia in five years’ time, except through joint ventures with local partners.

Asia has been a difficult hunting ground for western telecoms operators with most, such as BT and Telia, being forced to leave. Some analysts have urged Telenor to exit Asia, where it has about 95 per cent of its customers, to focus solely on its Nordic backyard.

The Norwegian operator went through a bruising departure from Myanmar following the coup in 2021, eventually securing the approval 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 it was refused the right to allow foreign employees to leave and was asked to use phone interceptive equipment, contravening international law. However, activists and human rights campaigners criticised its departure heavily, regarding it as an abandonment by Norway.

More than a year on Brekke said: “I’m sad knowing that we had to leave Myanmar. Myanmar was both profitable and a place where we saw we would make a difference. We thought we didn’t have any alternative. We picked the least bad alternative.”

He added that maintaining the safety of its workers and customers while dealing with the demands from the junta was challenging. “When you have principles, they come with a cost. We had a very clear principle in keeping our people safe and our customers safe. We never turned on any listening equipment,” he said.

Telenor has been in Asia for a quarter of a century and Brekke talked up the value it had created. He said that Telenor had taken out as much in dividends as it had invested in the continent — about NKr65bn ($6.3bn), and estimates that the value of the group’s listed Asian companies and the book value of its Pakistani business to be about NKr100bn, compared to NKr180bn total market capitalisation for the group.

The Norwegian operator recently completed mergers in both 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 its entire Asian business with Malaysia’s Axiata in 2019 broke down. Brekke said he had been working on possible deals for its Asian business ever since then but they were structurally complex and took a long time to finalise, adding that he had visited the region around 60 times in the period.

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 per cent of its Norwegian fibre business to a consortium led by KKR in February.