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Japan's KDDI, Sumitomo eye US$2.0b Myanmar telecom deal

Japanese mobile carrier KDDI said Thursday that it planned to link up with trading house Sumitomo in a deal to invest about $2.0 billion in developing wireless networks in Myanmar, as the country opens up after years of military rule.

TOKYO: Japanese mobile carrier KDDI said Thursday that it planned to link up with trading house Sumitomo in a deal to invest about $2.0 billion in developing wireless networks in Myanmar, as the country opens up after years of military rule.

The move will see the Japanese giants pair up for a joint venture with state-owned Myanma Posts & Telecommunications (MPT).

The tie-up would invest 200 billion yen ($2.0 billion) over a decade to boost phone networks in a country where only about 10 per cent of the 65-million strong population has access to mobile phones, KDDI said, one of the lowest rates in the world.

The business, KDDI Summit Global Myanmar (KSGM), would upgrade the domestic carrier's existing network and expand mobile coverage, the spokesman said.

"KSGM is expected to make an investment of about 200 billion yen over the next 10 years, and most of it will be used for developing the network," he added.

Myanmar, formerly known as Burma, was left impoverished after decades of economic mismanagement under military rule, as well as years of Western sanctions imposed in protest at the government's dire human rights record.

Foreign investors are now spilling into the resource-rich country following a series of dramatic political and economic reforms since military rule ended in 2011.

Myanmar desperately needs investment to drive its much-anticipated economic revival, after the installation of a nominally civilian government.

Unlike its Western allies, Japan maintained trade ties and dialogue with Myanmar during junta rule, saying a hard line could push it closer to China.

Nissan is among the Japanese firms investing in Myanmar with plans to set up vehicle production in the country, while All Nippon Airways said last year it would acquire a 49 per cent stake in a Myanmar airline.

Last summer, the airline restarted direct flights from Tokyo to Yangon after a 12-year hiatus, pointing to the rising number of business travellers and tourists headed to the country.

Japan has pledged "all possible assistance" to kick-start the economy, with Prime Minister Shinzo Abe pushing the expertise of Japanese firms -- particularly for infrastructure building -- during a visit last year.

Japan is part of the Thilawa project -- a 2,400 hectare (6,000 acre) site that will include a port and industrial park, which is expected be up and running in 2015.

Tokyo has also pledged to extend new loans to the long-isolated nation to help upgrade power systems and boost rural development.

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