TELECOM

MYANMAR UPDATE
September 2016

Get to the point.

SERVICES WE OFFER IN OUR TELECOM PRACTICE

Telecommunications services and media
licensing
Our TMT team has assisted state-owned telecom enterprises, mobile
operators, ISPs, satellite service providers, financial institutions
and corporates with their licensing needs. With a strong Nay Pyi
Taw presence, we provide a full service to clients which comprises
advice, preparation and documentation of license applications, and
liaison and follow-up with the authorities.

Network Facilities Service (Individual) licenses

Network Facilities Service (Class) licenses
Application Service licenses
Network Service licenses
Spectrum licenses
Numbering licenses
Mobile financial services
Radio broadcasting
Television broadcasting

Consumer protection
We advise telecommunications companies on their obligations in
terms of Myanmars consumer protection rules. In connection with
telecommunications services, we advise on advertising, general
terms and conditions, data protection and contractual compliance.

Interconnection and access

Our TMT team advises telecoms and mobile network operators,
towercos and fibercos, investors and lenders on the Myanmar legal
and regulatory framework of interconnection and infrastructure
sharing. This comprises:

Interconnection agreements
Master service/license agreements
Compliance with tarriff regulations
Regulatory approvals
Public sector technical assistance

Passive network infrastructure deployment

Our TMT team has unique in-depth and hands-on experience
with the regulatory aspects of the deployment of passive network
infrastructure. We have performed due diligence on and assisted
towercos and fibercos with securing land-use rights, approvals and
construction permits on a nationwide basis.

Land lease documentation and registration

Land class conversion
National, state/region and local approvals
Construction permits
Environmental and social compliance
Stamp duty payment

Equipment licensing
In most cases, importation of equipment into Myanmar is only
allowed after securing multiple regulatory approvals from various
Government organizations. Our import regulatory team makes a
capability available to our clients which goes well beyond the scope
of what is usual for law firms. We have secured import licenses in
Myanmar for well over US$1B worth of telecommunications and
technical equipment.

Competition
Myanmars telecommunications law and regulations foresee a
detailed framework of rules and procedures. We advise clients on
potential exposure and assist with procedures and disputes. Given
the firms multi-disciplinary foundations, we are able to create a
coalition with lawyers, regulatory experts, litigators and financial
specialists to meet their needs.

Our offices in Myanmar

YANGON

NAY PYI TAW

Level 8, Centrepoint Towers

No. S-204, Tha Pyay Kone Ward

Zabu Thiri Township

No. 65 Sule Pagoda Road &

Merchant Street
Kyauktada Township
T: +95 137 1902 / +95 137 1635
F: +95 124 1238

Find us on:
Page 2

T: +95 678 108 091

F: +95 678 108 092

VDB Loi in Myanmar

Contents

VDB Loi (www.vdb-loi.com) is a network of leading law and advisory

member firms and affiliated companies that comprises 10 partners and over
120 lawyers and advisers, with offices in Myanmar, Cambodia, Indonesia,
Laos and Vietnam, and representatives in Japan and Singapore.

CAN COPYRIGHT BE A SECURITY

With offices in Yangon and Nay Pyi Taw, we are a leading foreign firm in
Myanmar, and ranked as a top-tier firm by Chambers 2016.

AT THE INCORPOREAL ASSET

Our outstanding expertise in the TMT space is well-recognized in Myanmar

and throughout our network, with extensive experience in investment,
transactions, financing and regulatory matters. We provide telecom
companies, infrastructure providers, regulators, industry participants,
financial institutions and various suppliers with in-depth advice on
Myanmar telecommunications law and regulations.
We have advised on many of the largest telecom investments in Myanmar,
including acting as local counsel for the licensing and market entry of a
multibillion dollar greenfield telecom project, as well as assisting with the
licensing process for a number of mobile network operators and towercos
and acting for the investors purchasing a stake in a leading telecom
infrastructure company.

Partners

Jean Loi

Managing Partner
[email protected]

Edwin Vanderbruggen
Senior Partner
[email protected]

IN MYANMAR? A CLOSER LOOK

A BEAUTIFUL SPECTRUM

AUCTION? GAME THEORY

COMES TO MYANMAR AS THE
PTD DISHES OUT FREQUENCY
RECENT WORK IN

TELECOMMUNICATION, MEDIA
AND TECHNOLOGY

Jean is widely recognized as one of

the regions most experienced tax and
regulatory specialists, with more than 12
years of experience in Indochina, Myanmar
and Singapore. She has advised on a large
number of project transactions and tax
disputes in the specialties of structuring,
power plant projects and oil & gas. As the
managing partner of VDB Loi, Jean has
extensive experience with projects related
to the market entries of companies in the
infrastructure, telecommunications and
financial services industries in the region,
as well as with supply chains. Her Myanmar
tax experience is unsurpassed. She lives in
Yangon.

APPLYING FOR THE NEW MOBILE

10

FINANCIAL SERVICE LICENSE

COMPARATIVE ANALYSIS OF

12

MYANMAR TELECOM LICENSES

Edwin is one of Myanmars most prominent

foreign legal advisers. He is widely recognized
in Myanmar for his TMT experience, both on
the transactional and regulatory fronts. He
has advised 2 of the 3 telecom operators in
Myanmar, including acting as local counsel for
the licensing and market entry of a multibillion
dollar greenfield telecom project. He advises 5
out of 7 tower and fibercos, and was the first
to secure MIC permits for telecom systems
vendors.
He has a deep understanding of the financing
aspects of the telecom industry, having
acted for IFIs, commercial banks or corporate
borrowers on all of the completed major
project finance transactions, including the
largest-ever financing deal acting for two DFIs
in Myanmar.
Edwin currently advises several Myanmar
telecom operators, ISPs, infrastructure
providers, lenders and vendors. Furthermore,
he has provided technical assistance to the
telecom regulator, the PTD.
He has worked in the region since 1997, and
has lived and worked in Yangon since 2012.
Page 3

CAN COPYRIGHT BE A
SECURITY IN MYANMAR?
A CLOSER LOOK AT THE
INCORPOREAL ASSET

MEET OUR TEAM

Jean Loi

Managing Partner

Copyright protection is an issue of growing

importance in the modern-day commercial
world, and Myanmar is no exception.
Important intellectual developments in
the field of information technology, such
as software, require copyright protection.
Given the immense amount that firms are
investing in research and development in
these areas, a greater amount of financing
is also required, and the best possible
security these firms have to offer are these
intangible assets called copyrights.

2. Movable property:
a. General Clauses Act, 1898 (2(39)):
property of every description
except immovable property.
b. Registration Act, 1909 ( 2(9)):
includes standing timber, growing
crops and grass, fruit upon and
juice in trees, and property of
every other description, except
immovable property.
c.

Similar to many other common law systems,

in Myanmar a security can be created
over movable and immovable property
to secure any financial transaction. The
most prevalent forms of security used in
Myanmar are mortgages, pledges, charges
and assignments.
Considering its intangibility, it is pertinent
to see under which category a copyright
will fall, whether security can be created
over it, and if so, what sort of security would
be the most appropriate.

What form of asset is copyright?

In Myanmar, there are two broad
categorizations of the term property:

1. Immovable property:
a. General Clauses Act, 1898 (2(29)):
immovable property shall include
land, benefits to arise out of land
and things attached to the earth, or
permanently fastened to anything
attached to the earth.
b. Registration Act, 1909 (2(6)):
immovable property includes
lands,
buildings,
hereditary
allowances, right to ways, lights,
ferries, fisheries, or any other
benefits to arise out of land, and
things attached to the earth or
permanently fastened to anything
which is attached to the earth, but
not standing timber, growing crops
or grass.
c.

Page 4

Transfer of Property Act, 1882 (3):

Immovable property does not
include standing timber, growing
crops or grass.

Myanmar Penal Code, 1860 (22):

moveable property is intended
to include corporeal property of
every description, except land and
things attached to the earth or
permanently fastened to anything,
which is attached to the earth.

Clearly, upon reading the definition of

movable property as provided under the
general Clauses Act and the Registration
Act, it seems that all property that does not
fall within the description of immovable
property can be categorized as movable
property. Thus, copyright is an intangible/
incorporeal asset that is considered
movable property under Myanmar law.

Jean Loi is widely recognized as one

of the regions most experienced
professional advisors with a CPA
background. She was formerly a
partner with PricewaterhouseCoopers
in Southeast Asia. As the managing
partner of VDB Loi, Jean has extensive
experience with licensing, energy,
power, property and consumer product
projects. Her Myanmar tax experience is
unsurpassed. She lives in Yangon.

Nar Wah

Senior Legal Associate

Nar Wah, a Myanmar-qualified lawyer,
is an associate on VDB Lois legal team.
She has an exceptional educational
and career background in both law
and accounting. She spent more than
seven years working in Singapore.

How is copyright defined under

Myanmar law?
Under the provisions of the Copyright
Act, 1914 (2), copyright means the right
to produce or reproduce the work or any
substantial part thereof in any material form
or to perform an act or deliver a lecture in
public. It also includes the publishing of an
unpublished work, and the sole right to:
1.
2.
3.
4.

Produce, reproduce, perform or

publish any translation of the work.
Convert a dramatic work into a novel.
Convert any novel, and other nondramatic work etc. into a novel.
In the case of a literary, dramatic or
musical work, to make any record,
perforate roll, cinematograph film or
other device by means of which the
work may be mechanically performed
or delivered.

Such rights are inherent upon the

authorship of a work, and may be assigned,
licensed, or otherwise conveyed.

Bryan Alexander
Senior Associate

Bryan Alexander is an attorney

admitted to the US state bars of
South Carolina and Pennsylvania.
He has practiced for more than 10
years in corporate law, disputes
and commercial matters. Bryan
has extensive emerging market
experience, having worked in India
for a number of years. He is a senior
associate on our firms Corporate
M&A team, where he advises clients
in a wide range of sectors, including
telecom, consumer goods and
financial services. He is also involved
in infrastructure and resources
projects.

Creation of security over

copyright
Since as discussed above, copyright falls
under the definition of movable property
in Myanmar law, let us now consider the
forms of security that can be created over
copyright. As per Myanmar law, broadly,
there are four forms of security that
can be created over movable property:
(i) assignments; (ii) mortgages; (iii)
hypothecations/charges; or (iv) pledges.
However, as a copyright is an incorporeal
asset and incapable of delivery; security by
way of pledge is ruled out from the start.

1. Assignment of copyright by way

of security
Assignment is a mode of transfer
recognized under the Myanmar
Copyright Act. There are two types of
assignments: absolute, and by way of
security.
An absolute assignment is where the
assignee becomes the full owner of the
rights. Assignment by way of security is
where an asset is secured in favor of a
third party by way of an assignment of
rights or interest, which would become
an absolute transfer/assignment in
the event of default and enforcement
of the security. As held in U Hla Win
and Other vs. Daw Kyi Kyi alia Daw Yin
Wae Lwin (1999 Myanmar Law Reports
(Civil), 208), it is clear that the owner of
a copyright may assign the right either
wholly or partially, and either generally
or subject to limitation. However, such
assignment must be done in writing and
signed by the owner or the owners duly
authorized agent. 5(2) of the Copyright
Act, 1914 prescribes that unless it is so
written and signed, such assignment is
not valid.
In our view, since assignment is a
mode of transfer recognized under the
Myanmar Copyright Act, it seems to
be the most prudent form of security,
which enables the assignee to obtain
full ownership of the property upon
default made by the assignor.

2. Mortgage
Mortgage as defined under the Myanmar
Transfer of Property Act, 1882 (TP Act)
is the transfer of an interest in specific
immovable property for the purpose
of securing the payment of money
advanced or to be advanced by way of
a loan, an existing or future debt, or the
performance of an engagement which
may give rise to a pecuniary liability.
This basically means that the definition
of mortgage under the TP Act does not
factor in the mortgaging of movable
property
(including
incorporeal
property like a copyright). Nevertheless,

mortgages over movable property have

been recognized under Myanmar law
through court rulings, for instance, in
the matter of Webster vs Power, (1868)
LR 2 PC 69, the Privy Council held that
although mortgage over movable
property is outside the scope of the TP
Act, it is still valid and legally binding.
Similarly, as per Myanmar law, rights
should be considered to be a fit subject
of mortgage, a persuasive judgement in
this respect would be the case law from
India: Saway Ram and Fattu Ram, 56 I.C.
489. Additionally, 6 of the TP Act allows
the transfer of all types of property
except the specific types of property
mentioned in the list of property that
cannot be transferred. Copyright is not
included in this list.
Given that mortgages of movable
property are outside the scope of the
TP Act, there is a possibility that the
courts in Myanmar may not apply all
the provisions of the TP Act in the case
of enforcement, and this may result in
certain disadvantages. For instance, the
sale of the mortgaged property without
a courts intervention may not be
available in accordance with 69 of the
TP Act, unless the possession has been
provided for, which is unlikely in the
case of an incorporeal asset. Similarly,
the right to appoint a receiver without a
courts intervention in accordance with
69A may also not be available in the
case of a mortgage over a copyright.
In any case, if the parties to a transaction
wish to create a mortgage over copyright,
the most suitable form of mortgage is
the English mortgage as defined under
the TP Act. An English mortgage can
be taken over a manuscript, a compact
disk, an online data storage where the
intellectual property may be stored and
this would lead to an absolute transfer,
with a right to re-transfer in accordance
with the TP Act.
Furthermore, there is a possibility of
structuring the security by creating
a mortgage over any immovable
property and by the same deed creating
a mortgage over the copyright. This
would make the TP Act applicable
upon the instrument in question. The
provisions under the TP Act pertaining
to enforcement without a courts
intervention and the right to appoint
the receiver would then be available in
respect to the copyright.

However, in a charge, the chargee has

no legal right over the charged property
but only the right to have the security
made available. This means that there
is basically no transfer of property, but
it is rather a mere earmarking of the
property as security. The chargee will
only have the right to get the property
sold and have the amount of the sale
appropriated toward what it is due.
However, this is not preferable, since
charge as a concept of security does is
not mentioned under the Copyright Act,
thus this ambiguity means that it would
be better to create a security by way of
an assignment.

Stamp duty
In the context of Myanmar, one cannot
ignore the stamp duty requirements during
the creation of security. The Myanmar
Stamp Act, being an archaic law, prescribes
stamp duty at an unreasonable rate.
Depending on the nature of the security,
the stamp duty can go as high as 3% of
the amount being secured. However, an
assignment of copyright falls under the
exemption column under Article 23 of the
Stamp Act. This would mean that only a
minimal amount of MMK 300 would be
levied in an assignment of copyright under
the Myanmar Copyright Act.
In the case of a mortgage of a copyright,
the applicable stamp duty is 1.5% of the
amount being secured as per Article 40 of
the Stamp Act. Therefore, it is advisable to
charge a mortgage over a copyright only
when it is clubbed with security over other
immovable property, and the same would
then be created by way of one deed.

Conclusion
Given the recognition of the assignment
under the Myanmar Copyright Act
and the exemption from stamp duty as
provided under the Myanmar Stamp Act,
copyrights are best secured by way of an
assignment. Mortgage can be a secondary
option, if the copyright is clubbed with
other security, such as a mortgage over
immovable property.

3. Charge/hypothecation
As per 100 of the TP Act, a charge is
[w]here immovable property of one
person is by act of parties or operation
of law made security for the payment of
money to another and the transaction
does not amount to a mortgage.
Page 5

A BEAUTIFUL SPECTRUM AUCTION?

GAME THEORY COMES TO MYANMAR AS THE
PTD DISHES OUT FREQUENCY
For fans of John Nashs Nobel prize-winning
game theory, highlighted in the motion
picture A Beautiful Mind, you are about
to see theory turn to practice in your very
own Nay Pyi Taw, in Building No. 2. On 17
October 2016, the Ministry of Transport and
Communications, the new, somewhat odd
couple of Government ministries, will hold
its long-awaited spectrum license auction.
The auction follows a public consultation
stage that was organized in January and
February 2016.
In this note, we look ahead at this
potentially game-changing event, at who
can participate, and how it will be run.

Game theory-based auction

system
The method of the auction is something
called
Second-Price
Simultaneous,
Multiple-round, and Ascending or SMRA.
SMRA is the oldest and probably bestknown auction type for spectrum in case of
excess demand.
Under the SMRA method, the Post and
Telecommunications Department (PTD)
will auction several blocks of frequency
bands, in some areas simultaneously, by
going through a sequence of rounds. An
auction often has several blocks available
in a number of regions. In Myanmar, there
are three regions for this purpose. For every
round of bidding, the standing high bid
for the lot is determined, and the bidding
rounds go on until there is only one bidder
left for each lot.
For the mathematicians among us, a bidder
remains active in round T by submitting

the leading bid in T-2 or by submitting

a higher bid than the T-1 leading bid.
Interested bidders may read up on game
theory strategies for spectrum auctions in
the Handbook of Game Theory, edited by
Petyon Young and Shmuel Zamir.
In practice it means that bidders are kept in
separate rooms from 10am to 5pm and use
runners to bring their bids for blocks, per
round, to the auction room. Each time that
there is excess demand, the PTDs auction
manager (a consulting company called
Nordicity) will set a Minimum Acceptable
Bid and a new round will be called with new
bids from the separated bidders, unless one
or more of them drops out. There may be
one hour or less between rounds.
The advantage of this auction type is
that it is simple. The problem is that
unlucky bidders may end up with blocks
of spectrum that do not match together.
Bidders may also end up paying quite a bit
more than they otherwise would have had
to pay. Most importantly, perhaps, there is
the possibility of tacit collusive behavior,
based on an informal understanding of
who should get which spectrum.

What can you bid for?

At this time, the PTD will only auction
40 MHz of spectrum in the 2600 MHz band
(2575-2615 MHz), made up of two times
20 MHz (2575-2595 MHz, 2595-2615 MHz)
divided into three regions. Each bidder
will be able to acquire up to two regional
licenses, thus allowing for three to six
regional licensees in total.
The spectrum license is for 15 years.

The rules and processes for the 2600MHz

auction point out that a bidder will be
allowed to bid for a maximum of one
spectrum lot comprised of up to two
regional 20MHz Lots in the TDD mode. Thus
the spectrum cap in the 2600MHz band will
not exceed 20MHz per licensee in the same
region. In the National Table of Frequency
Allocations (NTFA), Myanmar has been
subdivided into three regions.

REGION

STATES and REGIONS

INCLUDED

Nay Pyi Taw

Magway
Bago
Mon
Kayin
Thanintharyi

Yangon
Ayawaddy
Rakhine

Mandalay
Sagain
Chin
Shan
Kachin
Kaya

The blocks on the auction table are

2 x 20 MHz, for three regions in the
2575-2615 MHz band. In Myanmar, this
band is within the 2535-2655 MHz and
has been allocated in the NTFA to FIXED
MOBILE except aeronautical mobile 5.384A
BROADCASTING-SATELLITE.
The NTFA also points out that the band
2500-2690 MHz is intended for broadband
services, while the band 2300-2400 MHz
will be considered for use by broadband
services.

Who can participate?

You
need
to
already
have
a
telecommunications service license; more
specifically, an NFS-I license. The NFS-I is
the most comprehensive form of telecom
license Myanmar has, allowing the licensee
to provide services and hold a network.
Myanmar 2016 Tax Update
16 March 2016, Sule Shangri-la Hotel, Yangon
Page 6

As of June 2016, these are the companies

that have received an NFS-I license:

How can you participate?

Companies issued NFS(I) licenses, as of 13 June 2016

No.

Company Name

Issue Date

Expiry Date

You must have lodged your Expression of

Interest by the deadline of 9 August 2016.
Then, interested parties will have until 7
September 2016 to prepare and lodge
their financial, technical and ownership
documents for qualification. The qualified
bidders will be announced on 28 September
2016. After submission of more paperwork
and a Q&A stage, a mock auction will be
held on 12 October 2016. Finally, the big
day (or days if things get out of hand) will
be on 17 October 2016. Winners should be
announced by 20 October 2016, but the
results will also be disclosed in the main
auction room right during the auction itself.

Shwe Than Lwin Media Co., Ltd

30 January 2015

29 January 2030

Elite Telecom Public Co., Ltd

27 February 2015

26 February 2030

Yatanarpon Teleport Public Co., Ltd

27 February 2015

26 February 2030

Myanmar Economic Corporation

23 March 2015

22 March 2030

Myanmar Network Co., Ltd

23 April 2015

22 April 2030

Union Internet Co., Ltd

12 June 2015

11 June 2030

Shwe Pyi Tagon Co., Ltd

26 June 2015

25 June 2030

F P T Myanmar Co., Ltd

6 July 2015

5 July 2030

Fortune International Co., Ltd

14 July 2015

13 July 2030

10

Golden TMH Telecom Co., Ltd

21 July 2015

20 July 2030

By the way, you will also need to arrange

for a bid bond of US$500,000 (from a
Myanmar-licensed bank or approved by
the PTD), and you cant have any common
ownership with Telenor, Ooredoo or MPT.

11

Myanmar Telecommunication Network

Public Co., Ltd

4 August 2015

3 August 2030

Looking ahead

12

KBZ Gateway Co., Ltd

4 August 2015

3 August 2030

13

AGB Communication Co., Ltd

27 August 2015

26 August 2030

14

Terabit Wave Co., Ltd

28 August 2015

27 August 2030

15

Southeastasianet Technologies
Myanmar Co., Ltd

4 September 2015

3 September 2030

16

Myanmar Country Co., Ltd

6 October 2015

5 October 2030

17

Tah Moe Hnye` Chan Thar Tun Wai Thar

Co., Ltd

6 October 2015

5 October 2030

18

Campana Mythic Co., Ltd

14 October 2015

13 October 2030

19

King Royal Technologies Co., Ltd

14 October 2015

13 October 2030

20

Myanmar Technology Gateway Co., Ltd

4 November 2015

3 November 2030

21

Global Technology Co., Ltd

30 November 2015 29 November 2030

22

Fiber Link Myanmar Co., Ltd

31 December 2015

30 December 2030

23

Speed Bird Co., Ltd

11 January 2016

10 January 2031

24

Frontiir Company Limited

25 January 2016

24 January 2031

25

Marga Global Telecom Limited

18 February 2016

17 February 2031

26

Spectrum Life Co., Ltd

28 March 2016

27 March 2031

27

Myanmar APN Co., Ltd

28 March 2016

27 March 2031

28

Bagan ISP Co., Ltd

30 March 2016

29 March 2031

29

Bliss Myanmar International Co., Ltd

30 March 2016

29 March 2031

30

Y Net Public Co., Ltd

30 March 2016

29 March 2031

31

Myanmar Speed Net Co., Ltd

30 March 2016

29 March 2031

32

Kinetic Myanmar Technology Co., Ltd

30 March 2016

29 March 2031

33

Amara Communications Co., Ltd

30 March 2016

29 March 2031

34

Hongsa Telecom Co., Ltd

6 April 2016

5 April 2031

35

China Unicom (MYA) Operations Co., Ltd 20 May 2016

19 May 2031

If you are not participating in this auction,

not to worry. According to the PTD, the
following bands could potentially be made
available for assignment in the next five
years:

Unassigned portions of the 850/900

MHz and 2100 MHz bands
700 MHz
1800 MHz
2300 MHz
Unassigned portions of the 2600 MHz
band

Page 7

RECENT WORK IN TELECOMMUNIC

TRANSACTIONS

Conversion of a state-owned former monopolist operator in Myanmar into a commercial

company
First-ever merger between two telecom operators in Cambodia
US$50 million acquisition of a group of telecom network assets in Vietnam by a foreignlisted entity
Joint venture between a Japanese trading house and a leading Myanmar ISP
First ever spin-off by an operator of its telecom towers into a new affiliate in Cambodia
Purchase of a US$52 million stake in a telecom network company in Cambodia and
Myanmar
Acquisition of a Cambodian ISP and cable TV provider, acting for the purchaser
Purchase of fiber optic cores by a mobile network operator in Myanmar

MARKET ENTRY AND LICENSING

Multibillion dollar greenfield market entry by Qatar Telecom in Myanmar

Advised 5 out of 12 bidders in the 2012 telecom tender in Myanmar
Advising 5 out of 7 tower companies in Myanmar
Advised on the deployment and financing of a submarine fiber optic cable in the
Andaman sea
Assistance with the concession for a nationwide fiber optic cable network in Laos
Deployment and licensing of a closed circuit FOC network in Indonesia
Assisted the top 3 world leaders in communications technology with their investment
licensing in Myanmar
Obtained over a dozen telecom licenses of various categories in Myanmar
Market entry of an internet gaming company in Cambodia

DATA CENTERS

Assisting in the development of a data center in Thilawa, Myanmar

Regulatory compliance for construction of a data center in Yangon, Myanmar

SATELLITES

Page 8

Advising an international satellite operator on leasing satellite capacities to Myanmar

customers
Development and licensing of a satellite ground station in Myanmar

CATIONS, MEDIA AND TECHNOLOGY

FINANCING

US$300 million financing of telecom network infrastructure, the largest-ever transaction

by international financial institutions in Myanmar, acting for the lenders
Providing specialized advice to a towerco in Myanmar on its US$250 million financing
from a US development lender
Acting for a group of development financial institutions on the nearly US$200 million
financing of a towerco in Myanmar
First ever non-recourse financing involving Myanmar, US$87 million financing of a
Myanmar tower company, acting for the borrower
US$50 million financing of a fiber optic cable project in Cambodia and Myanmar, acting
for the lenders
Financing of a US$40 million submarine fiber optic cable project, advising the borrowers
US$40.2 million financing by a consortium of commercial banks for the construction of
3,000 telecom towers, acting for the borrowers

REGULATORY

Assisted with procuring licenses and permits for a nationwide network of telecom
infrastructure
Acting for a telecom operator in a dispute with a telecom regulatory body in Cambodia
Advised a group of development financial institutions on regulatory compliance for a
nationwide network of telecom infrastructure in Myanmar
Assisted in connection with tax structuring and compliance for a telecom vendor in
Indonesia

MEDIA

Advising a global, US-based social media giant on its compliance in Vietnam

Market entry and joint venture in Myanmar of a global leader in cinemas and the
distribution of motion pictures
Acting for the majority shareholder in a print media partnership dispute in Myanmar
Assisted in connection with the acquisition of a media services company with a presence
in Cambodia, Laos and Vietnam

E-MONEY

Acted for the purchaser on the acquisition of a mobile money service platform in
Cambodia
Advising the joint venture between a bank and a mobile network operator on its
e-money business in Myanmar
Assisting an independent e-money issuer to secure its licenses in Myanmar

Page 9

APPLYING FOR THE NEW

MOBILE FINANCIAL SERVICE
LICENSE
On 30 March 2016, the Central Bank of
Myanmar (CBM) issued regulations
on mobile financial services (the
Regulations), the marketplace has long
been awaiting. Below we have set out the
key points to consider if you wish to apply
for permission to provide mobile financial
services (MFS License) in Myanmar.

Who can apply?

Of significance, it appears that only mobile
network operators and registered nonbank financial institutions are entitled to
apply for an MFS License. The applicant
must be incorporated solely for the purpose
of providing mobile financial services, and
must have a minimum capital of MMK3
billion (approx. US$2.5 million at the time
of writing), amongst other requirements,
and must submit an application to the
CBM, which, according to the Regulations,
should be processed in 90 days.

What should be included in the

application?
The application must include a fee of MMK3
million (approx. US$2,500 at the time of
writing), technical/functional details of the
mobile financial services to be provided,
a three-year business plan, details of the
board of directors and senior managers, and
if the applicant is a mobile service operator,
then a non-objection letter from what was
previously the Ministry of Information and
Communications Technology. The CBM
may request further information, and
notably, in theory may prescribe a range of

fees and charges to avoid anti-competitive

behavior.
The CBM has not yet circulated a template
for the MFS License application, and it can
be expected that additional information
and documents will be required, including
with regard to agent networks, systems
and technology, consumer protection
measures, and trust account issues (see
below for more details).

MEET OUR TEAM

Chris Sheridan

Senior Legal Associate

A barrister and a solicitor admitted
in Australia, Chris has a solid
background in commercial practice
for a wide range of sectors including
financial services, resources and
finance. At VDB Loi, Chris advises
foreign investors on commercial and
corporate law, M&A, real estate law
and dispute resolution.

Agent networks
A mobile financial services provider is
allowed to operate through a network of
agents (agent exclusivity is not permitted),
subject to CBM approval of the agent
network based on three-year projections,
which include the geographic coverage of
agents, draft agency agreements, services
to be provided by agents, policies and
procedures, risk assessment report, and the
mobile financial services providers agent
KYC policy.
Assuming approval by the CBM, the
mobile financial services provider must
make public a list of its agents, keep the
CBM notified of the GPS locations of its
agents/areas of operation, and submit to
the CBM an audit report within six months
after the start of mobile financial services
operations. Naturally, the mobile financial
services provider is legally responsible for
the actions of its agents to the that extent
the actions relate to the scope of the agents
appointment.

Jeffrey Lyle Martin

Senior Legal Associate

Jeffrey is an experienced lawyer

qualified in Canada with an
extensive background in real estate
development and transactional
matters, also advising clients on
related corporate, commercial and
finance issues. He has assisted a
broad range of clients with complex
cross-border investments, offshore
financing, mergers and acquisitions
and joint ventures.

Aung Soe Moe

Senior Legal Associate

Aung is an experienced Myanmar
qualified attorney with a Bachelors of
Law degree from Dagon University.
He has unique and extensive
experience in telecommunications,
land and licensing issues in Myanmar.

PPA breakfast briefing

16 August 2016, Sule Shangri-la Hotel, Yangon

Page 10

Systems, technology and

consumer protection

Can a mobile financial services

provider obtain an MIC permit?

The mobile financial services provider

is required to implement and maintain
systems and technology for consumer
protection,
anti-money
laundering
measures and other matters subject to CBM
satisfaction. There is also a requirement
on the mobile financial services provider
to maintain records and oversight of its
operations and make records and books
available to the CBM upon request. The
mobile financial services provider must
report to the CBM as prescribed and in
the event of any substantial change to its
system or business model, and to submit
audited accounts to the CBM within three
months of the close of each financial year,
amongst other reporting requirements.

A mobile financial services provider clearly

does not require an MIC permit to carry
on business, but there is nothing in the
Foreign or Myanmar Citizen Investment
Law or regulations which would prohibit
a mobile financial services provider from
obtaining an MIC permit. Typically as a
matter of practice, service companies are
not given much priority in receiving MIC
permits, although nonetheless, certain
service companies have been successful in
obtaining MIC permits in the past.

Trust account
In addition, the mobile financial services
provider must maintain a 100% float of
liquid assets in trust, which may not be
comingled with other funds interest
earned must be declared to the CBM and
used for the benefit of its customers. The
trust account must be reconciled no later
than 4pm each day and any deficiencies
rectified by 12pm the following day.

A potential mobile financial services

provider should definitely consider
applying for an MIC permit for the mobile
financial services activities, and particularly
if the provider intends to make a significant
capital investment in Myanmar. The obvious
benefits of obtaining an MIC permit include
the potential tax incentives, including a
five-year tax holiday, assurances that the
business will not be nationalized during
the investment period, and assurances that
the investor will be able to repatriate funds
in the same currency as they were brought
into Myanmar.

So what transactions are

permitted under mobile
financial services?

MEET OUR TEAM

Edwin Vanderbruggen
Senior Partner

Edwin and his team secured the

licenses for Myanmars first westernowned CCGT, now in production. Still
in the energy sphere, he advises on
the structuring of the Thilawa SEZ, the
construction of a 2,000MW coal power
plant, a series of hydropower projects
and several other projects in the
renewables space. He also provided
technical assistance to national
and international stakeholders on
Myanmar energy issues.

Nishant Choudhary

The Regulations allow a broad scope of

domestic transactions, including cash-in/
cash-out, although international transfers
would only be permitted with CBM
approval. Transactions must be in Myanmar
kyats, and account holders are entitled to
have their credits redeemed at any time.

Senior Legal Associate

Nishant is an experienced lawyer

qualified in India with an extensive
background in finance and securities.
He assists finance institutions navigate
the emerging regulatory framework
of foreign and secured lending in
Myanmar. Nishant also advises on
corporate M&A and restructuring in a
wide range of industries.

The KYC requirements depend on the

size of the transfer (although payments
to merchants, financial institutions, and
for utilities, taxes/government fees do not
count towards the limits):

Cumulative Transaction
Limits Per Day

Cumulative Transaction
Limits Per Month

Maximum Balance Limit

(based on aggregate of
all accounts held)

Level 1
Presentation of ID is required if
(individuals only) and when necessary

MMK50,000

MMK1 million

MMK200,000

Level 2
SIM registration or ID
(individuals only)

MMK200,000

MMK5 million

MMK1 million

Level 3
(for registered
businesses only)

MMK1 million

MMK50 million

MMK10 million

Tier

KYC/CDD

Business registration certificate,

identification requirements for
opening bank accounts

Page 11

COMPARATIVE ANALYSIS OF MYANMAR

TELECOM LICENSES
LICENSE

NFS-I

NS

Purpose/
authorized
activities

Provide any

public or private
telecommunications
services (international
or national) to the
public and/or other
licensees
Construct, maintain
and operate a network
Lease all or part of a

network to another
licensee
An NFS-I licensee is

licensed to perform
all NS, NFS-C and AS
activities

Examples of
activities

Construct, maintain,
operate, and provide
telecommunications
services over:
Terrestrial fixed line
transmission facilities
Terrestrial radio
transmission facilities
Mobile base station
facilities
Submarine cable
facilities
International Gateway
Services facilities
Satellite earth station
facilities
Other Myanmar-based
satellite facilities
that can transmit
telecommunications
services

Page 12

Lease transmission
capacity from NFS-I
licensee and/or other
licensee to provide
telecommunications
services (international
or national) to end
users and/or other
licensees
Provide all services
authorized by NS and
AS licenses
NS licensees cannot
construct, maintain
or operate networks,
except for switches,
routers and processing
equipment needed for
the licensed services

Provision of the following

telecommunications
services:
Resale of wireline
connectivity services
Resale of terrestrial
wireline connectivity
services
International and
domestic network
transport and
switching services
Resale of International
Gateway Services

NFS-C

AS

Construct, maintain

and lease passive

infrastructure to an
NFS-I and/or construct,
deploy and maintain
a telecommunications
network solely for
the self-provision of

telecommunications
NFS-C licensees
cannot provide
interconnection with
networks, whether
public or private; or
closed user group
telecommunications
services that are
offered to any person

Deploy and maintain

passive network
infrastructure for civil
engineering and nonelectronic elements,
including but not limited
to:
Towers
Masts
Ducts
Trenches
Poles
Dark fiber

Provide
telecommunications
application services
without the need for
a subscriber number,
such as Internet Service
Provider (ISP)
Lease transmission
capacity directly from
an NFS-I licensee and/
or other licensee
in order to provide
public and private
telecommunications
services on a national
basis to end users and/
or to another licensee
AS licensees cannot
construct, maintain
or operate networks,
except for switches,
routers and processing
equipment needed for
the licensed services

Provision of the following

telecommunications
services:
Public payphone
services
Public switched data
services
Audiotext hosting
services provided on an
opt-in basis
Directory services
ISP services
Public access center
services
Messaging services
Private line voice and/or
data services (including
leasing Wide Area
Network capacity to
third parties)
Value-added services

LICENSE

NFS-I

NS

NFS-C

AS

Application
procedure

Application
If the PTD/ MTC thinks the information in the application is incomplete or inaccurate, it will give notice in
incomplete or
writing and the applicant may amend and re-submit the application
inaccurate
Failure to respond within 30 days may result in rejection of the application

Timeframe
for review
and decision

Approval or denial of application within 60 days

If the applicant is foreign or it is for International
Gateway Services, then review period is 90 days

Approval or denial of application within 30 days

If the applicant is foreign or it is for International
Gateway Services, then review period is 60 days

Delays in
review &
decision on
license

If review exceeds 60 days, the applicant will receive

written notice explaining the delay and giving the
expected review completion date

If review exceeds 30 days, the applicant will receive

written notice explaining the delay and giving the
expected review completion date

Application
approved

If the application is approved, the applicant must pay the applicable fees set by the PTD

Procedures for both NFS-I and NS are the same: A

company must:
Complete the MTCs standard application form,
providing all required information
Apply under the license category relevant to its
intended activities
Submit the application to the Posts and
Telecommunications Department (PTD)
Pay the application fee set by the MTC, unless
exempted under the Rules
- NFS-I application fee: MMK10 million
- NS application fee: MMK5 million
NOTE: The MTC will publish the standard application
form on its website and will indicate the information to be
provided in the application

Procedures for both NFS-C and AS are the same:

A company must:
Complete a standard registration form providing all
required information
Apply under the license category relevant to its
intended activities
Submit the registration form to the PTD
Pay a registration fee of MMK2.5 million, unless
exempted under the Rules
NOTE: The MTC will publish the standard application form
on its website and will indicate the information that must be
provided in the application

Page 13

LICENSE

NFS-I

NS

NFS-C

AS

Application
denied

Qualification Not specified in the Proposed Licensing Rules

requirements

10

License
period

15 years
No indication in the Proposed Licensing Rules whether this period is extendable; See license renewal (#12)

11

New or
additional
services

A written request must be sent to the PTD and

approval obtained for offering additional networks
or services to end users or other licensees under the
existing license
The request must describe the proposed additional
services and show that the licensee can meet any
additional related conditions or obligations
The licensee must pay a fee equal to half of the
application fee
- NFS-I fee: MMK5 million
- NS fee: MMK2.5 million
The PTD will notify the licensee of its decision within
30 days
Upon approval, the PTD will update the existing
license

A written request must be sent to the PTD and

approval obtained for offering additional networks
or services to end users or other licensees under the
existing license
The request must describe the proposed additional
services and show that the licensee can meet any
additional related conditions or obligations
The licensee must pay a fee of MMK1.25 million
The licensee may begin engaging in the additional
activities permitted within the scope of its existing
license upon submission of the notification
The PTD will notify the licensee of its decision within
30 days
Upon approval, the PTD will update the existing
license

If the request is denied, the PTD must give specific

reasons and allow the licensee to re-apply. The licensee
is not allowed to provide the additional services until
approved to do so.

If the request is denied, the licensee must cease the new

activities. The PTD must give specific reasons for the
denial and allow the licensee to re-apply.

If denied, the PTD must provide objectively justifiable reasons in writing

The applicant may re-apply but must submit a new application and pay a new application fee

12

License
renewal

A request for renewal shall be made no more than 24 months and no less than 12 months prior to the license
expiry date
A request for renewal will be reviewed on the same or substantially similar terms and for the same duration of
the initial license period
If the request is refused, the PTD will provide written notice stating the reasons for refusal and provide a
reasonable opportunity to remedy
Written notice of the decision will be provided within 6 months of receiving the application to renew

13

Spectrum
licenses

An NFS-I license does

not guarantee access
to spectrum resources
Companies must
submit a separate
application for a
spectrum license to
the PTD

Page 14

An NS license does not N/A

permit a licensee to
use scarce spectrum
resources assigned by
the PTD
A licensee can only
use unassigned
spectrum resources,
such as a spectrum in
unlicensed frequency
bands

An AS license permits a
licensee to use spectrum
resources that are not
assigned by the MTC,
such as a spectrum in
unlicensed frequency
bands

LICENSE
14

Allocations
for numbers

NFS-I
Separate application

process from NFS-I

application
Must apply pursuant to
the Numbering Rules

NS

NFS-C

AS

Separate application
N/A
process from NFS-I
application
Must apply pursuant to
the Numbering Rules

Telecommunications Equipment Licensing

15

Registration
procedure

The MTC will issue a standard registration form, which indicates the information to be provided
The applicant must complete the registration form
A registration fee of MMK5,000 must be paid
If the PTD or MTC thinks that the information in the application is incomplete or inaccurate, it will inform the
applicant in writing and the applicant may amend and re-submit the application
In such a case, the applicant must amend and re-submit its application within 30 days of receipt of written
notice
Failure to respond within 30 days may result in rejection of the application
Anyone meeting the qualification criteria set out in the registration form will receive a license
NOTE:
The MTC will set forth in a schedule the list of equipment that requires a license
Public consultation will then be done, which will include proposed terms and conditions and duration of license
A license will generally be required where there is a high likelihood of harmful interference and/or a license is in
the interests of national security and the public

16

Timeframe
for review
and decision

The PTD will review the registration form within 30 days of receipt of a completed and accurate registration
form
The PTD will issue a license if the registration is approved
If the registration is denied, the PTD must provide objectively justifiable reasons in writing
The applicant may re-apply but must submit a new form and pay a new registration fee

17

Equipment
that requires
a license

Satellite equipment (e.g., satellite telephones)

Radar equipment and devices
HF radio equipment

RECOGNITION OF VDB LOI

Page 15

www.VDB-Loi.com

Page 16