Norway's Telenor is selling its majority stake in nation's leading fintech mobile pay platform. Image: Facebook

YANGON – The Telenor Group has agreed to sell its majority share in digital financial service provider Wave Money to a consortium led by Myanmar tycoon Serge Pun’s Yoma Strategic, the latest divestiture in the Norwegian telecom giant’s retreat from the crisis-torn country.

The companies entered an agreement for Telenor to sell its 51% controlling share of the mobile payment platform for US$53 million to a Yoma Strategic subsidiary, a January 17 statement announcing the transaction said. The deal, which values the firm at $104 million, is still subject to approval by the Central Bank of Myanmar, which is now controlled by the military junta. 

The consortium led by Singapore-listed Yoma Strategic is understood to include Myanmar internet service provider Frontiir and Taiwanese venture capital firm WTT Investment, according to industry sources. The announcement did not identify the new investors apart from Yoma Strategic, but Telenor confirmed that WTT Investment and Frontiir are part of the acquiring consortium.

The sale marks a next major step in Norwegian state-owned Telenor’s exit from Myanmar. Attracted by then-president Thein Sein’s political and market reforms nearly a decade ago, the multinational invested more than a billion dollars in building Myanmar’s telecoms and mobile money infrastructure.

After the transaction, Yoma Strategic will take over as Wave Money’s controlling shareholder. Launched in late 2016, Wave Money is a leading provider of money transfer and digital payment solutions in the country. It processed a total of $8.7 billion in remittance and payments, which represented around 12% of Myanmar’s GDP, in 2020.

“We have worked in partnership with Yoma Strategic to ensure that anyone from anywhere can digitally send and receive money, make contactless and secure payments in-stores or online using the market leading mobile Wallet App of Wave Money,” said Lars Tellmann, head of financial services at Telenor, in the statement.

The Norwegian company said it is confident that Yoma has “the commitment and vision to take Wave Money forward to the next level of driving financial inclusion,” he added.

Yoma CEO Melvyn Pun, who is also Wave Money’s chairman, said the deal “reinforces Yoma Strategic’s desire to build a strong financial and technology ecosystem” in Myanmar over the long term.

Wave Money processes the lion’s share of Myanmar’s foreign remittances. Image: Twitter

The conglomerate has been hit by Hongkong and Shanghai Hotels’ post-coup suspension of an ambitious $130 million real estate joint venture, while other business partners including German retail giant Metro and British education brand Dulwich have ceased to operate or pulled out of the deal.

While Telenor first decided to exit Wave Money in 2020, its rapid sale from the e-wallet reflects a wider loss of foreign investor confidence under the coup regime. In June 2020, Alibaba’s fintech affiliate Ant Financial sought to invest $73.5 million for a minority stake in Wave, but now the new investors are paying just $53 million for a 51% majority share. 

The Chinese tech giant backed off from its investment after the coup, amid broad setbacks to Myanmar’s incipient digital economy and rising repression of financial transactions. The junta’s internet blackouts were estimated to have cost the economy $3 million in 2021, according to Top10VPN, a UK-based digital privacy and internet research group.

The deal was announced as the coup nears its one-year anniversary and as the junta heightens restrictions on access to the internet by censoring websites and apps. 

The military regime has recently increased the floor price of mobile internet data by imposing a 15% tax on data revenues and introduced a new tax of 20,000 kyat (US$11) on the sale of new SIM cards, making it harder for consumers to evade state tracking.

Ongoing banking and cash problems have also hit the prospects of online payment systems, experts say. 

“Prolonging the financial crisis would also reverse the longer-term trend away from cash toward electronic payments [except in high-end stores], implying less access to credit, fewer savings, lower investment and lower economic growth over the long-run,” says the Independent Economists of Myanmar (IEM) in an August 2021 report about the post-coup banking crisis.

Rights groups and activists are alarmed by attempts by the junta’s enhanced efforts to monitor financial flows and have raised related concerns about the suitability of Wave Money’s new controlling investors.

After media reports indicated a deal was in the offing earlier this month, activist group Justice for Myanmar accused Telenor of endangering Myanmar people’s lives by selling its controlling stake.

“No sign of human rights due diligence in sale of Wave Money share to Yoma Strategic,” the activist group commented online, adding that there’s a “high risk” for the junta to access personal data, including of financial transactions, to use against journalists, activists and others.

A man uses the internet with a mobile phone in front of Telenor’s cheap sim card advertising in Yangon on September 26, 2014. Photo: AFP / Ye Aung Thu

That said, companies led by Serge Pun are seen as relatively more transparent than most in Myanmar. Yoma Bank and First Myanmar Investment, for example, have the fourth and fifth-highest disclosure scores in the 2020 Pwint Thit Sa corporate transparency report out of 260 companies surveyed.

The Ayeyarwaddy Farmers Development Bank (A Bank) – which is backed by Thailand’s Kasikorn Bank to develop digital services – is, by comparison, ranked 28th.

Activist concerns arise partly from the importance of digital channels for donations to the National Unity Government, an underground government set up by elected and ousted lawmakers primarily from detained leader Aung San Suu Kyi’s National League for Democracy (NLD) party.

The NUG launched a “Victorious Spring” online lottery last August with the aim of using 70% of the revenue for employees who participated in the Civil Disobedience Movement, a nationwide protest against the coup and regime, and 30% as resistance rewards.

The sales went live on August 15 and a total of 50,000 lottery tickets sold out within an hour, earning the parallel government 100 million kyat (around $60,000). Asia Times understands that the NUG is finalizing its maiden budget, which will amount to hundreds of millions of dollars.

Criticism about Wave Money’s sale underscores foreign investors’ dilemma of whether divestment in Myanmar can be done in a responsible way, which also applies to Telenor’s stalled and controversial bid to sell its telecom business to M1 of Lebanon.

NUG Finance and Investment Minister Tin Tun Naing told media last year that the underground government would have preferred Telenor to stay on as the mobile network’s operator. Other multinationals that have announced their exits from the country, including Adani of India and Metro of Germany, have yet to indicate buyers of their assets.

The NUG has asked foreign investors to decide whether they are doing more good than harm by staying and operating. It has also recently warned national business lobby group the Union of Myanmar Federation of Chambers of Commerce and Industry (UMFCCI) against legitimizing the junta through engagement.

So far, Wave Money appears to have retained public trust. As of August 2021, MytelPay, Easy Pay and MPT Money are on the CDM’s list of boycotted entities, along with Asian Green Development Bank, two military-owned banks and four state-owned banks, according to the IEM report seen by Asia Times.