KDDI Corp. and Sumitomo Corp. signed an agreement Wednesday with the state-run Myanmar Posts and Telecommunications to jointly operate a mobile phone service in the Southeast Asian country.
The partners plan to invest ¥200 billion over 10 years building up the telecom infrastructure in the country, where only 15 percent of the population has access to mobile phones.
The Myanmar government has said it hopes to raise the cellphone access ratio to 80 percent by 2016.
"We have entered what could be called the last rapidly growing market," said Yuzo Ishikawa, senior vice president of KDDI, at a news conference in Tokyo. "With our telecommunications infrastructure, we hope to greatly contribute to the development of Myanmar's economy."
The joint venture will combine the Myanmar telecom company's customer base and existing network infrastructure, with marketing and technological expertise as well as funds to be provided by KDDI and Sumitomo, according to the two companies.
Ishikawa said he hopes to capture the largest market share in the Myanmar market within several years.
KDDI will be the first Japanese mobile phone operator to enter the country's telecommunications sector after it opened up its telecom market to foreign capital last year.
Norway's Telenor and Qatar's Ooredoo obtained mobile operating licenses following an international bid last June. They plan to begin offering services this fall.
Ooredoo said it aims to invest up to $15 billion within 15 years. Telenor has not disclosed details of its plans, other than to say it aims to cover 60 percent of the population in the first year and 95 percent in the following five years.
Seeing no further room for strong growth in Japan, KDDI and Sumitomo, a trading house, are setting their eyes on emerging economies.