This report provides a comprehensive overview of the trends and developments in telecommunications, broadcasting and pay TV markets in Cambodia, Laos, Myanmar, Thailand, Vietnam. Subjects covered include:
Market and Industry Overviews
Major Players (fixed and mobile)
Mobile Voice and Data Markets
Internet, VoIP, IPTV
Broadband (FttH, DSL, cable TV, wireless)
Convergence and Digital Media
Continuing to overshadow the fixed-line segment of the market, Cambodia’s flourishing mobile market passed the one million subscriber milestone in late 2005 and was continuing to grow at a healthy annual rate of 25% into 2006. In the meantime, fixed-lines languished at around 40,000 subscribers. Given the booming mobile market, it is surprising to find other sectors of the market in the doldrums. Internet penetration remains particularly low, with the services on offer being notably expensive in comparison to other countries in the region. As its efforts are directed towards building up its telecommunications infrastructure, the country continues to struggle with the legacy resulting from years of civil war and instability. Ongoing political problems in the period since the end of the war have made it hard to put the necessary administrative institutions in place. This has had a major impact on the telecom sector which remains in need of serious regulatory reform and a general strengthening of the regulatory role. For a period, the absence of a properly functioning government saw all infrastructure projects involving international aid suspended and government funded projects were also constrained, with a corresponding impact on foreign investor confidence. This had a negative effect on the telecom sector.
After years of struggle to build up its economic base, Laos has finally found some good news in the form of the giant Nam Theun 2 hydro project, the Oxiana gold and copper mine at Sepon and a number of other mining ventures. The challenge now is for Laos find some economic equilibrium, allowing it to focus more attention on building its national infrastructure, including telecommunications. With a low fixed line teledensity of less than three telephones per 100 people by early 2006, the country has been looking for more foreign investment to boost the telecoms sector. The Lao Telecom joint venture formed by the government with the Thai company, Shinawatra, in 1996 was not initially a success. Lao Telecom wasted the five year period of market exclusivity and the real impact occurred when the market was opened up to competition in 2002. Foreign capital started to flow into the sector, although not as much as the government would have liked. The mobile phone market finally took off in early 2003, the number of subscribers increasing sevenfold in just 2 years. The Lao telecom sector still has many issues to address. Despite the recent rapid opening up of the market, the regulatory progress continues to lag behind market development and has the potential to derail the progress already made if reform is not speeded up.
Operating in an economy where change is very slow, Myanmar’s telecommunications sector continues to be dominated by the state-owned monopoly telephone service provider, Myanmar Posts and Telecommunications (MPT). The country is battling both grave economic problems and a troubled political climate. Soaring inflation continues to be a major problem. Reaching a rate of 60% in 2002, inflation had settled back to about 25% in 2005. The country’s centrally planned economy is plagued by weak fiscal and monetary management, resulting in major economic imbalances, which will not be easily or quickly resolved. These problems, combined with an overarching lack of transparency, have naturally frightened off foreign investment. In the meantime, the country’s telecommunications is characterised by what can only be described as stunted development. The telecom sector is indicative of the overall state of the national economy. Myanmar’s official economic data is not considered reliable, making actual growth rates difficult to ascertain. However, it is reasonably evident that fixed telephone line penetration remains a lowly 1%, mobile services are prohibitively expensive and limited, and Internet access continues to be problematic, being severely restricted in its availability to the general public. The government has simply been unable to help the struggling MPT to generate any serious level of capital investment in telecoms infrastructure.
Despite some economic uncertainty and questions about the government’s progress on a range of national projects, Thailand’s telecom sector has been exhibiting a lot of energy. Over the last four or five years, the country’s mobile telephone market in particular recorded particularly strong annual growth rates. By early 2006, mobile penetration was approaching 50%. The subscriber levels reached represented an eight-fold increase since 2000. The country has certainly been seeing the benefits of a liberalised market. However, a feature of the government’s telecom reform efforts over the last five years has been a general tardiness in implementing key changes. Of special note has been the slowness in establishing the country’s new regulator, the National Telecommunications Commission (NTC), which finally came into being in late in 2004 - a long time after the enabling Telecommunications Act was adopted as law in 2000. Having now become operational, the NTC was concentrating on getting up to speed and was unlikely to have an immediate impact on the market in the short term. Although, there were promising signs observed about the medium term prospects. Delays have also occurred in the restructuring and ultimate privatisation of the state-owned telco giants, TOT and CAT. Whilst Internet has been popular in Thailand for some years now, broadband access had been languishing. In 2004/2005, however, the number of broadband subscribers suddenly increased more than tenfold. Broadband penetration remains low at less than five subscribers per 1,000 people.
Reflecting the self-conscious style of a centrally-planned economy, Vietnam set itself some ambitious targets for the expansion of its telecommunications infrastructure. Initial efforts to fast-track the expansion of the national network had their shortcomings. But the introduction of a limited level of competition into the telecoms market, combined with a generally improved economic climate, has seen some vigorous growth in the sector. The expectation that Vietnam will win accession to the World Trade Organization (WTO) in 2006 has also created a positive climate for the telecom sector to expand. The country’s mobile market has been especially dynamic, growing at an annual rate of more than 50%. The strong growth was likely to continue, building on the 10 million mobile subscribers (penetration 11.5%) in the country by March 2006. At the same time, the country’s fixed line subscriber base has also been continuing to expand and has passed 13 million for a teledensity of over 15%. And despite the government’s cautiousness about the Internet (and occasional news reports indicating serious problems with human rights issues), this segment of the market has been gaining a strong foothold. Internet user penetration was running at a healthy 14% by end-2005. Increased foreign investment remains the key to expansion. The continuing strong government involvement in the telecom sector, however, still raises major questions about its commitment to deregulation and liberalisation. Again, the WTO commitments will be important in this regard.