Telenor’s sale of its Myanmar venture has been completed. Its new majority owner is Myanmar’s Shwe Byain Phyu group, which is mainly known for its petroleum trade.
On 11 May, in their reports to Telenor’s Annual General Meeting, Chair of the Telenor Board Gunn Wærsted and CEO Sigve Brekke spoke at length about the extremely difficult situation Telenor had faced after Myanmar’s 1 February 2021 military coup.
They affirmed that Telenor will continue its dialogue with Myanmar-based civil society organizations, who have complained about the sale to Norway’s contact point under the OECD. They also informed the shareholders that an internal learning process is underway, examining Telenor’s handling of the Myanmar situation at every stage.
As a Norwegian citizen and a Telenor shareholder, I do not think an internal review is enough. The Norwegian state is a majority shareholder, and the company’s exit from Myanmar involved so many difficult decisions that an independent external review is needed. Telenor’s Board of Directors should invite an external review of how the Norwegian company has tackled its ethical dilemmas in Myanmar since the military coup.
The importance of Telenor’s contribution to Myanmar’s digital revolution during 2013–2021 can hardly be exaggerated. The perhaps boldest move of General Thein Sein’s reform government, in the years 2011–16, was to invite international competition for rolling out modern telecom services in a country where most people had no access to any kind of telephone.
In 2013, licenses were awarded to two foreign companies, Ooredoo of Qatar, and Telenor of Norway, who obliged themselves to cover 90 percent of Myanmar’s population with telecom networks in just five years.
In addition, the former monopoly company Myanmar Post and Telecom (MPT) formed a joint venture with the Japanese company KDDI & Sumitomo to compete with the two newcomers. Although not a part of the original plan, the Myanmar military subsequently established a fourth company, Mytel, which is a joint venture with the Vietnamese military-owned company Viettel.
Telenor played a leading role in Myanmar’s digitalisation. In just a few years, towers were built and fibre waslaid out almost everywhere in the country, even in areas controlled by local Ethnic Armed Organizations (EAOs).
This revolutionised Myanmar’s society, for better and worse. Myanmar’s people learned about the world and the world learned about Myanmar. Smartphones helped markets function more smoothly. The rapid spread of news made it riskier for the military and various militias to recruit child soldiers or abuse local people. Out of the four companies, the most trusted by Myanmar’s journalists and democratic popular movements was Telenor. Its blue logo was seen everywhere and it got more than 18 million customers.
The downside of Myanmar’s digital revolution was the way the new media was used by the military as well as EAOs in combat, for propaganda and fake news, hate messages, and sexist abuse against political adversaries or whole ethnic groups. Worst of all was an orchestrated and massive hate campaign against the Muslim Rohingya in 2016 and 2017, when the military raped, killed, and forced more than 700,000 Rohingya to flee to Bangladesh, where they still live in camps.
On that occasion, a telecom tower leased by Telenor was used as a sniper post by the military. Telenor reacted to the calamity by intensifying its educational programs in digital literacy.
During the period when Daw Aung San Suu Kyi was State Counsellor (2016–21), Telenor competed with the MPT for being Myanmar’s leading telecom provider. As a result of a crushing victory in the 2015 elections, Daw Aung San Suu Kyi became the de facto head of the civilian part of the government. As such, she engaged in a drawn-out, mostly hidden,power struggle with the military, which remained in control of key levers of power. In this period, the government was unable to follow up its digital revolution. Telenor and the other telecom providers tried in vain to get the government to write new rules and regulations for its thriving business, which made huge earnings, but sometimes existed in a regulative limbo.
While Myanmar has seen fierce competition among the four telecom providers, one company dominates social media – or indeed the whole internet. This is Facebook, which created a Burmese-language version of its application well before the country’s digital revolution.
At a time when the price of SIM-cards was affordable only for a tiny elite, Facebook established itself as Myanmar’s standard gateway to the internet and retained that position when smartphones and SIM-cards became cheap enough for everyone to buy.
Google and other browsers are hardly used in Myanmar. People access the internet through Facebook.
By contrast to the four telecom providers, Facebook has not established any office in Myanmar and has not invested in the country. It runs the whole Myanmar operation from an office tower in Singapore. The government in Nay Pyi Taw therefore has no leverage over it.
For a people oppressed by an illegitimate government, this has proven an advantage. When realizing the extent to which its services had been used in the 2016–17 hate campaign against the Rohingya, Facebook could shut down military-controlled accounts and increase its capacity for removing content that violated its community standards, without any risk of military retaliation against the company. Again, after the military coup, Facebook could shut down accounts controlled by the new junta, while remaining open to non-violent opponents of General Min Aung Hlaing’s new military regime.
Today, Facebook remains the main gateway to the internet in Myanmar, although many people have removed postings that are critical of the regime and are cautious of what they post. People use VPN when they browse the internet and have learnt to use encrypted applications when sending messages to friends and contacts. Myanmar’s military has not managed to control the internet and mobile communications the way the Chinese Communist Party does in China.
After the coup, the military authorities ordered shutdowns of the internet in certain areas and time periods. However, this backfired since banks and other companies, and the government itself, depend just as much as everyone else on the internet and Facebook. Attempts to replace Facebook with the Russian VKontakte (VK) have so far been futile. People and institutions who are banned from Facebook may, however, use VK instead, and get someone to post links from Facebook to what they have published on VK. The military government has banned the use of VPN. People must therefore be careful not to carry smartphones with VPN apps when they pass through checkpoints or are in contact with the police.
Telenor representatives have claimed that the company had no other choice after the military coup than to sell its Myanmar assets. Telenor executives may earnestly have felt there was no choice. Yet, in principle, the company had three options.
One was to do what the three other telecom providers did: remain in place and quietly follow the orders received from illegitimate military authorities. This would have meant handing over user data when asked, allowing secret monitoring of individual users, or depriving them of their IP addresses. Telenor felt it could not do this without violating its core values or EU sanctions. In the first two weeks after the coup, Telenor opted for transparency. Each time the military authorities ordered it to remove some IP-addresses, it made known through its website that it had been ordered to do so. Then, on 14 February 2021, the military authorities instructed Telenor to stop this practice. Telenor went public also with this order,and then remained silent. This created an unbearable situation for the company. It began to look for ways out. On 8 July, it announced that it had decided to end its operations in Myanmar and sell its assets to the Lebanese M1 Group.
The second option was resistance. Telenor could have closed its business and erased all user data, accepting the cost this would have represented for its 750 employees, its customers, and shareholders. Apparently, the possibility of a closedown came up in discussions with representatives of the junta, who made it clear that this would not be tolerated and backed up the prohibition with threats. Key company executives were prevented from leaving Myanmar. Armed soldiers entered company headquarters. Next, when the military brutally clamped down on peaceful demonstrators in Myanmar’s towns and cities, Telenor feared for the lives of its employees and began looking for a buyer.
If Telenor had stood firm and refused to abide by orders from the junta, it would have gained immense respect from the people of Myanmar, who as late as November 2020 had secured a new landslide victory for Aung San Suu Kyi’s party, the National League for Democracy (NLD). Now Aung San Suu Kyi was in house arrest, and has since received several jail sentences.
If Telenor had chosen to resist, it might have been invited back into Myanmar at some point in the future, when the people bring a new civilian government to power. The downside of the choice to resist was the risk that Telenor employees would face arrests, prison sentences, or even torture. Telenor has experienced military coups before, in Bangladesh, Pakistan and Thailand, but was unprepared for the extreme brutality of the Myanmar military in repressing the massive popular protests after the coup.
This forms the background for the third option: Telenor chose to sell its Myanmar company at a fire sale price to someone with a lesser claim to morality and who did not risk any EU sanctions. A sales agreement was reached with the Lebanese M1 group, which later resold 80 percent of its shares to the Shwe Byain Phyu group.
Telenor’s user data were considered an essential part of the value transferred to the new owner: IP addresses plus records with date and time for every user’s communication history (but no content). The prospect that Telenor’s user data might fall in the hands of the military authorities led to a complaint from 474 Myanmar based civil society organizations to the Norwegian contact point for the OECD. A dialogue facilitated by the contact point is still ongoing.
Yet, Telenor has liberated itself from its legal responsibility for what its former company does. Telenor’s dishonourable sale has damaged the reputation of Telenor and Norway in Myanmar and other countries.
However, this has two upsides. First, it saved Telenor’s employees from losing their jobs and from likely arrests and possible torture. The military might well have adopted harsh measures if Telenor had chosen open resistance. Second, and perhaps more importantly, the sale helped preserve a situation – at least for the time being – where Myanmar’s population can choose between the services of four independent telecom providers. To the extent that people realize the need to take care of their security by using VPN and encrypted applications, people may continue to benefit from the digital services that Telenor helped establish.
The military junta’s ability to control or monitor digital communication remains limited. Myanmar is not digitally isolated, like North Korea, and it has no Chinese firewall.
Six questions to Telenor
Telenor is a private shareholder company, registered on the stock exchange. The Norwegian government owns a majority of shares but has a tradition for refraining from any interference in what a shareholder company does. Responsibility rests with the Board, which is elected at the Annual General Meeting.
The latest General Meeting was held on 11 May 2022 as a hybrid event, where shareholders could choose between attending physically or virtually. As a shareholder, I decided to attend physically and submitted six questions in advance to the company leadership. Very few other shareholders turned up physically, and those who took part through their computers or smartphones remained silent throughout the meeting. All of us voted digitally on each agenda point, and all votes went in the direction recommended by the Board.
Myanmar was not an independent agenda point, but Chair of the Board Gunn Wærsted and CEO Sigve Brekke spoke at length about the painful and extremely difficult decisions they had been forced to take in Myanmar. They covered several of the questions I had submitted, and also allowed follow–up questions, and answered them as well.
My first question was: What measures had Telenor undertaken before the military coup to reduce the risk that sensitive user data would end up in wrong hands? Were they stored in a way that made it possible to quickly erase them?
The answer was that Telenor had standard procedures but was surprised, first by the coup and then by the Myanmar military’s brutality when facing public protests. I did not get any specific answer to the question of whether or not Telenor had prepared a contingency plan for erasing user data. However, we know that the data were not destroyed.
My second question was: Was monitoring equipment from the German company Ultimaco Safeware imported to Myanmar? If yes, was it sent back to Germany or handed over to the buyer?
CEO Sigve Brekke could not confirm the brand name and emphasized that Telenor had not activated the new equipment. In a reply to my follow-up question, he confirmed that the equipment had been imported and handed over to the new owner.
My third question was: Which procedures had Telenor established for how to protect its employees in the case of a coup?
CEO Sigve Brekke replied that measures had been implemented immediately after the coup. The company leadership had contacted all employees individually every day to enquire about their situation and do what could be done to care for their security.
My fourth question was: Which measures has Telenor undertaken since the coup to help its customers communicate securely with their mobile telephones?
CEO Sigve Brekke said the company had warned its customers that they could not expect to communicate securely unless they used VPN and encrypted messaging services. He was, moreover, under the same impression as me that, after the coup, people in Myanmar quickly learned to use VPN and encrypted messaging.
My fifth question was: Does Telenor recognize a moral, if not legal, responsibility for what the buyer of Telecom Myanmar does with the user data after the completion of the sale?
Chair of the Board Gunn Wærsted replied that Telenor no longer holds any responsibility. The main responsibility for what happens to the user data rests with Myanmar’s military authorities. Gunn Wærsted emphasized, however, in her report to the General Meeting that Telenor will continue its dialogue with Myanmar stakeholders, facilitated by the OECD contact point in Norway.
My sixth and last question was: Will the Telenor Board take the initiative for an independent review of Telenor’s reactions to the coup and its handling of the situation afterwards?
Gunn Wærsted said that an internal review is already ongoing, with a view to learning from Telenor’s experience with an extremely difficult and tragic situation.
Telenor’s successful rollout of telecom services in Myanmar from 2013 onwards made a momentous contribution to Myanmar’s digital revolution. Telenor can be proud of its role in opening Myanmar’s society to local, national, and international communication, and of its attempts to stimulate digital literacy.
In a global comparative perspective, Myanmar’s communication revolution is an extraordinary case of rapid social change. Myanmar’s digitalisation started from a low point of development and happened more quickly than in almost any other country in the world. It coincided with a promising transition from military dictatorship to a constitutional, semi-democratic regime. The transition ultimately failed, however, and gave way to a new military dictatorship and today’s deep economic, social, health and political crisis.
Telenor’s decision to go public with orders received from the new junta in the first two weeks after the coup, is praiseworthy. The later decision to sell the company to a buyer with different kind of values, and hand over all user data to that buyer, has damaged Telenor and Norway’s reputation. The user data may be used as a basis for arresting, mistreating, and sentencing democratic opponents of the military junta. On the other hand, Telenor’s decision to refrain from open resistance is likely to have protected its employees and secured access to useful telecom services for Telenor’s customers after Telenor itself left the scene.
Telenor’s painful experience in Myanmar needs to be carefully studied and examined not only for the sake of Telenor or Myanmar but also as part of a global deliberation about business ethics in vulnerable societies under authoritarian regimes. An internal learning process in the Telenor company is not enough. Telenor’s board should invite an external review by an independent research group, recruited internationally. Telenor should make its files available to the research group and allow it to conduct systematic interviews with all main stakeholders.
- Stein Tønnesson is an Asia Researcher at the Peace Research Institute Oslo (PRIO).