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Laos - Telecoms, Mobile, Broadband and Forecasts

Laos - Telecoms, Mobile, Broadband and Forecasts

Lao mobile market finds new impetus in aftermath of the Beeline dispute

Note: This report has been updated with newly available statistics (May 2013), resulting in the revision of tables and forecasts.

The telecom sector in Laos still has issues to address. The rate of regulatory reform continues to be well behind wider industry development, even for a developing economy like Laos. The delays in reform have the potential to derail the good progress already made if the process is not speeded up. An insight into this situation was provided in 2011 with the effective isolation of the local Beeline business by the other three mobile operators, Lao Telecom, ETL and Unitel. The Ministry of Post and Telecommunications (MPT), acting in its regulatory role, took the side of the three operators in the dispute. After a long stand-off Beeline was finally reconnected by the other operators. It was clear however that the underlying issues had not been resolved.

On a business front it is fair to say the business is booming on the back of a strong local economy. In the last five or six years there has been a noticeable shift in the economic and social outlook for Laos. After a number of decades of having to struggle with a poorly performing economy and a commercial environment that was in desperate need of reform, there is now positive news being reported on many fronts for this nation of just over six million people. Most importantly, a significant number of hydro-electric power projects and mining ventures have become reality, with more set to come on line, and even more possible projects are in the pipeline. Laos is finally moving forward in what might be described as a confident fashion. At the same time there has been progress in the strengthening of both the national telecommunications infrastructure and its regulatory regime, although this has not always gone smoothly. One of the major challenges has been the effort to attract more foreign investment into the sector and this remains tightly linked to reform of the regulatory regime.

The building of the country's infrastructure continues to be a priority. By early 2013 fixed-line teledensity was still low at around two telephones per 100 people, with limited growth occurring in that segment of the market; over the last decade or so, however, the Lao mobile market has been moving forward in a sustained fashion in what had become a highly competitive market. But, as already noted, the market ran into problems in 2011/2012 that resulted in a major setback not just to Beeline but to the overall market. By early 2013, after overcoming the lost momentum, the market seemed to have to have largely sorted itself out. (However, the available statistics were contradictory.) Mobile penetration had passed 90%, the annual growth rate was holding up well. A particularly strong performance by Unitel, the military-owned operator that has been reinvigorated by the formation of a joint venture with Vietnam's Viettel, has seen this operator take over number one position in the country's mobile market. In the meantime, Beeline's subscriber numbers had declined dramatically, although it was suggested that the operator was concentrating on higher value customers.

Internet services in Laos continue to lag. This remains a major concern in terms of the overall social and economic development of the country. The good news is that the 2011/2012 period saw a boom in mobile broadband internet services, although it has been hard to get reliable statistics on this part of the market. The expansion of internet and especially broadband into the provinces and the rural areas is high on the government's list of development priorities.

While more foreign investment is needed to boost the telecom sector, the government must also be judicious in selecting and licensing new operators to ensure that it gets the best value out of the investment. The joint venture formed by the government with Thai company Shinawatra back in 1996 let the five-year period of market exclusivity granted to Lao Telecom pass without any serious attention to infrastructure building. When the market was finally opened up to competition in 2002, foreign capital finally started to flow. The mobile phone market took off in early 2003, with the number of subscribers increasing sevenfold in the two years following.

Market highlights:

The mobile market in Laos was in disarray following the Beeline crisis in 2011; however, by 2013, the market appeared to be back on a more positive path;
Mobile penetration had reached 90% coming into 2013; this was up from 65% two years earlier;
The market certainly became more competitive following Vietnam's Viettel forming a joint venture with the military-owned Lao Asia Telecom; the operator had been rebranded Unitel;
After Vimpelcom acquired Millicom's 78% stake in Tigo, the operator rebranded as Beeline also brought more vigorous competition to the market place;
With competition really heating up, among other things this put considerable downward pressure on ARPU, setting the scene for the battle that subsequently took place;
Beeline was denied interconnection by the other mobile operators for a lengthy period in 2011 after a reported agreement on pricing and promotions broke down;
Following a protracted standoff running into 2012 Beeline was finally able to resume normal service after a settlement was negotiated;
By early 2013, the market seemed to have rebounded from the setback caused by the Beeline crisis and had regained momentum;
The low penetration and sluggish development of internet services continues to be a problem for both the local telecom industry in particular and the country in general, especially given how crucial online access is to national growth.
Mobile broadband internet services were providing some positive news in the market place, however.

Table 1 - Laos key telecom parameters 2012 - 2013
Category | 2012 | 2013 (e)
Fixed-line services:
Total number of subscribers1 | 112,000 | 116,000
Total number of fixed subscribers (e) | 60,000 | 75,000
Mobile services:
Total number of subscribers | 5.8 million | 6.6 million
(Source: BuddeComm)
Notes: 1 these figures include Wireless Local Loop (WLL) subscribers

This report provides an overview of the trends and developments in the telecommunications markets in Laos.

Subjects covered include:

Key statistics;
Market and industry overviews;
Major operators (mobile and fixed);
Regulatory environment;
Mobile market;
Internet market, including broadband;
Scenario forecasts (mobile, internet, fixed-line subscribers).

1. Executive summary
2. Key statistics
3. Country overview
3.1 Background
3.2 Economy
3.3 WTO accession
3.4 Lao-US relations
4. Telecommunications market
4.1 Overview of telecom market in Laos
4.1.1 The Beeline case
4.1.2 Background to development
4.1.3 International assistance
4.1.4 Scenario forecasts
5. Regulatory environment
5.1 Background
5.1.1 Telecommunications Act 2001
5.1.2 Master plan for telecommunications
5.1.3 National Authority for Post and Telecommunications (NAPT)
5.2 Ministry of Posts and Telecommunications (MPT)
5.3 New telecommunications law
5.4 Other regulatory developments
6. Fixed network operators in Laos
6.1 Lao Telecom
6.1.1 Background
6.1.2 Changes in corporate structure
6.2 Enterprise of Telecommunications Lao (ETL)
6.3 Unitel (formerly Lao Asia Telecom)
7. Telecommunications infrastructure
7.1 National telecom network
7.1.1 Overview
7.1.2 Fixed-line statistics
7.1.3 Optical fibre network
7.1.4 Forecasts fixed-line market - 2015; 2020
7.2 International infrastructure
7.2.1 Terrestrial cable links
7.2.2 Asian Development Bank Backbone Telecommunications Network
7.2.3 Proposed satellite system
8. Internet
8.1 Overview
8.2 Internet statistics
8.3 Forecasts internet services - 2015; 2020
8.4 ISP market
8.5 Public internet access
8.6 Top level domain name
9. Broadband market
9.1 Overview
9.1.1 Broadband statistics
9.2 WiMAX
9.3 VoIP telephony
10. Mobile communications
10.1 Background
10.2 Mobile statistics
10.3 Forecasts mobile services - 2015; 2020
10.4 Third Generation (3G) mobile services
10.5 Long Term Evolution (LTE) / 4G services
11. Major mobile operators
11.1 Lao Telecom
11.1.1 Possible listing of LTC
11.2 Enterprise of Telecommunications Lao (ETL)
11.2.1 Proposed IPO
11.3 Beeline (formerly Tigo)
11.4 Unitel (formerly Lao Asia Telecom)
11.5 Sky Telecom
11.5.1 Background
12. Broadcasting market
12.1 Overview
13. Notes on scenario forecasts
14. Related reports
Table 1 - Laos key telecom parameters 2012 - 2013
Table 2 Country statistics Laos 2012
Table 3 Telephone network statistics 2012
Table 4 Internet user statistics 2012
Table 5 Mobile statistics 2012
Table 6 National telecommunications authority
Table 7 Laos' GDP real growth rate 2006 - 2014
Table 8 Fixed-line operators' subscribers and market share September 2012
Table 9 Fixed lines in service 1995 - 2014
Table 10 WLL (fixed) subscribers 2004 - 2012
Table 11 Fibre network by operator 2012
Table 12 Forecast fixed line subscribers and penetration rates 2015; 2020
Table 13 Internet users 1998 - 2014
Table 14 Fixed internet subscribers 1999 - 2013
Table 15 Households with internet connection 2005 - 2012
Table 16 Internet bandwidth capacity 2002 - 2013
Table 17 Forecast internet subscribers 2015; 2020
Table 18 Internet subscribers by operator September 2012
Table 19 Fixed broadband subscribers 2002 2014)
Table 20 Overview of broadband/household subscribers 2012
Table 21 Fixed broadband subscribers by access type 2010
Table 22 Active mobile-broadband subscribers 2009 - 2012
Table 23 Mobile subscribers, annual change and penetration 1995 - 2013
Table 24 Mobile operators, subscribers and annual change 2012
Table 25 Mobile subscribers and market share by operator 2012
Table 26 Mobile services sector estimated ARPU 1998 - 2012
Table 27 Forecast mobile subscribers 2015; 2020
Table 28 Lao Telecom's mobile subscribers and annual change 1995 - 2012
Table 29 ETL's mobile subscribers 2003 - 2012
Table 30 Beeline's mobile subscribers 2005 - 2012
Table 31 Beeline's mobile ARPU 2011 - 2012
Table 32 Unitel's mobile subscribers 2005 - 2012
Table 33 Key broadcasting statistics 2011
Chart 1 - Fixed-line operators market share September 2012
Chart 2 - Fixed lines in service - 2005 - 2014
Chart 3 - Internet users - 2005 - 2014
Chart 4 - Fixed internet subscribers 2005 - 2013
Chart 5 - Fixed broadband subscribers - 2008 2014
Chart 6 - Active mobile-broadband subscribers - 2009 2012
Chart 7 - Mobile subscribers and annual change - 2006 - 2013
Chart 8 - Mobile subscribers and market share by operator 2012

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