A draft bill of a new telecommunications law for Myanmar was recently published in the New Light of Myanmar (the "Draft Telecoms Bill"). The Draft Telecoms Bill1 covers a number of important aspects relevant to the development of the telecoms sector in Myanmar, one of the most closely watched in the world at present. These aspects include:

  • approvals for foreign investment;
  • licence categories, duration and fees;
  • import and location of equipment;
  • requirements relating to the use of land;
  • approvals for tariffs;
  • approvals for access and interconnection;
  • sharing, cooperation and joint ventures;
  • regulatory powers and protection of state interests;
  • prohibitions against anti-competitive conduct; and
  • penalties and dispute resolution.

However, the Draft Telecoms Bill is also silent in various areas or leaves many details to be determined.

Background

Pending the issuance of the new telecommunications law (which is projected to be issued in early 2013), the key current laws currently governing the telecommunications sector are the Telegraph Act 1885 and the Wireless Telegraphy Act 1934 (the "Current Telecoms Laws").

The original draft of a new telecoms law was formulated many years ago. The current Draft Telecoms Bill is still currently under discussion, and has not been finally reviewed by Parliament. Consultants have also been appointed to assist with aspects of the proposed liberalisation of the telecoms sector in Myanmar, although the exact scope of their work and any impact on the Draft Telecoms Bill is unclear.

The Draft Telecoms Bill provides that it will revoke the Current Telecoms Laws and is deemed to also apply to existing licence holders, whose licences shall be deemed to be valid until expiry. However, it is not known what effect the new telecommunications law will have on the provisions of any existing licenses issued under the Current Telecoms Laws which conflict with the terms of the new telecommunications law, and whether any such provisions will be deemed to have been amended, or if they will remain valid and 'exempt' from conflicting provisions under the new telecommunications law.  

Approvals for foreign investment

The Draft Telecoms Bill specifies that government approval is required for foreign investors to hold a licence. This is consistent with the provisions of the new Foreign Investment Law ("FIL") and State-Owned Economics Enterprises Law ("SEE Law"), which will still apply. Importantly, the SEE Law provides that the government may also specify certain conditions relating to a foreign investor's participation in the telecoms sector, which is a restricted sector under the SEE Law.

The Draft Telecoms Bill does not currently specifically reserve any of the licence categories solely for Myanmar companies, nor does it include any requirement that an applicant or licence holder must have a minimum level of local ownership. However:

  • under the SEE Law, the government may impose conditions to its approval for a foreign entity to participate in the telecoms sector, which may include minimum local shareholding;
  • the Myanmar Investment Commission ("MIC"), in considering an application from a foreign investor for an MIC permit, will consider the proposed local ownership level in any joint-venture company and may indicate that a higher local ownership percentage is required; and
  • although no indication to date, it is possible that implementing regulations to be issued under FIL (expected in January 2013) may specify a maximum threshold for foreign ownership in the telecoms sector.

Licence categories, duration and fees

The Draft Telecoms Bill provides for 2 broad categories of licence:

  • telecommunications services licences, available in four categories:
    • network facilities licence;
    • network service licence;
    • content application licence; and
    • applications service licence; and
  • telecommunications equipment licences (save for certain exempt activities).

The licence categories differ from the current categories and it is not entirely clear under the Draft Telecoms Bill what content and applications are required to be licensed.

Licences would need to be approved by the Ministry of Communications, Posts and Telegraphs ("MCPT") following scrutiny of any licence application by the Post and Telecommunications Department ("PTD") under the MCPT. Licence terms would be set by the MCPT.

There is a maximum 20 year term for licences issued under the Draft Telecoms Bill (or longer upon grant of a renewal).

The Draft Telecoms Bill refers to licence, renewal, usage, service and other fees but does not provide any detail. The Draft Telecoms Bill also refers to a universal service fund but not to how it would be funded.  

Import and location of equipment

The Draft Telecoms Bill refers to types of equipment being specified as requiring approval from the PTD for import and also refers to all equipment produced, sold or distributed as requiring certification by the PTD.

This is consistent with the current MIC permit application process, under which the MIC will generally grant a limited import licence for the purpose of importing equipment or machinery required to operate the specified business.

The Draft Telecoms Bill refers to licences specifying where equipment can be situated.  

Requirements relating to the use of land

There are many forms of land title in Myanmar and it is a complicated area in practice. Foreign companies, including companies with foreign ownership, are not permitted to own land in Myanmar. However, the FIL does allow foreigners to have long duration leases.

The Draft Telecoms Bill refers to having to renegotiate rights to land if the owner of the land changes. It also refers to having to give prior notice in relation to access.

The Draft Telecoms Bill also refers to the PTD being able to give certain directions in relation to access or use of land where necessary.  

Approvals for tariffs

The Draft Telecoms Bill refers to a licensee's tariffs needing to be approved by the PTD.  

Approvals for access and interconnection

Although the Draft Telecoms Bill requires access and interconnection, it also refers to access and interconnection arrangements needing to be approved by the PTD.  

Sharing, cooperation and joint ventures

The Draft Telecoms Bill envisages agreements for the sharing of network facilities. However, any joint venture or co-operation with another licensee must be approved by the MCPT through the PTD.  

Regulatory powers and protection of state interests

The Draft Telecoms Bill includes fairly wide ranging interception, inspection and supervision rights for the PTD (including in respect of interference).

There are a number of references in the Draft Telecoms Bill to licensees not doing things which are detrimental to the State etc.  

Prohibitions against anti-competitive conduct

The Draft Telecoms Bill includes a prohibition against conduct by a licensee which has the effect of substantially lessening competition in the telecommunications market or entering into any anti-competitive arrangements.

The Draft Telecoms Bill does allow the minister to assign any international gateways.  

Penalties and dispute resolution

The Draft Telecoms Bill includes a range of offences (e.g. relating to national security, operating without a licence, not using prescribed international gateways, etc.). These may be punishable by imprisonment (up to 7 years in some cases) and fines (the amount is not specified).

Dispute resolution under the Draft Telecoms Bill is generally to the PTD in the first instance. Then either the MCPT (if it is technology or licence suspension or revocation related) or otherwise courts.  

Conclusion

While the Draft Telecoms Bill aims, amongst other things, to support the building of a modern, developed nation and encourage more private participation in the telecoms sector, in many areas question marks remain.