Norway’s Telenor has written off its entire $782m investment in Myanmar but insisted it would remain in the country for now despite internet shutdowns, pressure on staff, and deteriorating operating conditions since a military coup in February.

The telecoms group said on Tuesday it had fully impaired its Nkr6.5bn investment in the south-east Asian nation, where it is seen as a cornerstone foreign investor, as it reported a first-quarter loss. The write-off will serve as the latest blow to business confidence in Myanmar’s economy, where output has plummeted during three months of civil unrest.

Sigve Brekke, Telenor chief executive, said he believed the Norwegian government-controlled company could still “make a difference” in Myanmar where it was the first telecoms operator to come out against a new security law.

“You should look at that as an impairment or writedown, not an exit,” he added.

Brekke said that Telenor faced a number of dilemmas in being in Myanmar including ensuring the safety of its employees and serving its 18m customers there when it has been ordered to shut down data networks.

On human rights, the chief executive said that its opposition to the new security law had not drawn a response from the military leaders. “This is the dilemma — how can we operate in a country with a military dictatorship without jeopardising our values? As it stands now, we think we are balancing that.”

The impairment pushed Telenor to a quarterly net loss of Nkr3.9bn, compared with net income of Nkr698m in the first quarter of 2020.

“This is not surprising,” said Romain Caillaud, a principal at Tokyo-based advisory firm SIPA Partners and associate fellow at ISEAS-Yusof Ishak Institute in Singapore. “The domestic context in Myanmar makes it very difficult — if not impossible — for Telenor to continue operating in Myanmar as per its global standards and commitments.”

Telenor, which operates one of Myanmar’s four telecoms companies, has suffered from General Min Aung Hlaing’s crackdown on communications and dissent since the military commander toppled Aung San Suu Kyi’s elected government after making ungrounded claims of election fraud.

The junta first ordered Telenor and other telecoms companies to block popular social media sites such as Facebook, before shutting off internet services every night and finally making them cut off most remaining mobile and wireless internet communications.

Since the coup, regime troops have killed 766 people and jailed more than 3,600, according to the Assistance Association of Political Prisoners, a human rights group.

The unrest has put Telenor in an uncomfortable position at a time when anti-coup campaigners have called for companies to withhold payments or investments that might benefit the Myanmar regime.

Telenor said in March that it would pay Myanmar’s state telecoms regulator its annual licence fee but registered what it called a “strong protest” against the regime’s crackdowns on mobile internet, the rule of law and human rights.

Since the coup, Japanese brewer Kirin and South Korean shipbuilder Posco have announced that they would quit joint ventures with military-backed partners in Myanmar. Total and Chevron, investors in the country’s main gasfield, have rejected campaigners’ calls to withhold tax payments to the military, which they said would break the law and put local staff in danger.

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