International Gateway Licenses issued

The Ministry of Transport and Communications (“MTC”) and Posts and Telecommunications Department (“PTD”) have finally come through the long process of obtaining government approval and issued the first batch of International Gateway (“IGW”) licenses.

Around a dozen of companies have received their IGW licenses and new licenses will continue to be awarded. A glimpse at the IGW licensees list shows that “early birds” are more likely to get their IGW licensees than late comers. All licensees were granted with their first telecom license in early 2015. The list also shows a favor to local companies but at least several of them are foreign companies.

As a reminder here are a few key points about IGW in Myanmar.

Can foreign companies get the IGW license, and how?

The IGW license application is open for foreign companies registered in Myanmar. Previously we have covered the qualification of the IGW licensee and application procedures in our legal wire:

To apply for an IGW license, an applicant should complete the application form with the required information like proposed IGW locations, launch date, etc. The application shall be accompanied with supporting documents including:

• corporate documents
• the affiliated telecom license
• technical plan
• business plan
• financial plan

The applicant being granted with an IGW license shall also provide a bank guarantee of US$1 million to the PTD to guarantee that it will meet the proposed launch day, or a fine will be imposed by the PTD in accordance with the length of delay. In addition, the licensees are also required for a second bank guarantee of $500,000 to ensure it will meet the minimum quality of service commitment. In this aspect, earlier this year the PTD has published Technical Specifications and Quality of Service for IGW as guidance for the licensees. All these bank guarantees will be released upon the licensees’ fulfilling their commitments.

How long does it take to get the IGW license?

Although the PTD shall make a decision within 60 days (or 90 days in case of a foreign company) upon receipt of the completed applications, the Licensing Rules clearly state that an application for IGW needs to be approved by the Union Government – first through the Economic Committee led by Vice President and then to the Cabinet. This approval process adds uncertainties to the timeline. As we have seen from the first batch of IGW licenses, it has taken more than a year.

Can late comers get the IGW license?

The MTC and PTD adopt the policy to encourage competition in the market especially for IGW which is considered to be “essential facilities” under the Competition Rules for the Telecommunications Sector. Therefore we can expect more applicants will get their IGW licenses in the near future.