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Mobile Broadband Drives Growth in a lagging Laos telco market
After years of hesitancy, Laos has started to make significant progress in strengthening of its telecommunications infrastructure. As a result, it attracted more foreign investment into the sector and quickly saw the introduction of the latest telecom technologies. Although the regulatory role still resides within the ministry and is certainly not independent, there has been a growing appreciation of the role of the regulator in the telecom industry. The granting of accession to the WTO was an indication of progress in this respect.
Laos has had mixed success in the roll-out of infrastructure and delivery of services to the general population. Fixed line penetration in Laos remains relatively low via international comparisons. Fixed line penetration increased sharply from 1.7% in 2011 to 13.4% in 2014, however since then it has only increased marginally to 13.8% by 2016.
The provision of fixed internet services has been slow, this being a major concern in terms of the overall social and economic development of the country.
Internet penetration in Laos remains relatively low, however penetration has increased significantly over the past five years. Penetration increased from 8.8% in 2011 to 14.6% in 2014 and reached 19.5% by 2016. Fixed line broadband penetration is very low, although has grown strongly over the past five years from a very small base. Penetration has increased from 0.1% in 2011 to 0.8% by 2016. The market is forecast to reach between 5% and 8% by 2021.
The country’s mobile sector has been going through a difficult period. Although the mobile market had a long period of particularly sustained growth, especially after 2004/05, after peaking in 2011 mobile subscriber penetration in Laos has been declining. It declined from 66% in 2013 to 57% in 2016. The cellcos are now operating in an environment where the regulator is keeping a tight hold on pricing and open competition is in effect discouraged. A further problem emerging for the mobile operators is that network performance is deteriorating across the board. Unitel with 47% market share and Lao Telecom with 39% market share dominate the market.
In contrast there has been the rapid expansion of mobile broadband internet services on the back of the large scale launch of 4G services by the mobile operators. The introduction of fibre-based broadband, mainly in the rural areas is high on the government’s list of development priorities.
- Telekom Malaysia arranged to establish a new PoP in Laos in collaboration with the Lao National Internet Centre (LANIC).
- Comba Telecom is set to enter the domestic telecoms market and will hold a 25% stake in ETL through Jiafu Holdings.
- Despite the difficulties in the mobile sector, mobile broadband continues to expand at a rapid rate.
- Unitel launched a 4G service, thereby joining Lao Telecom into the 4G segment;
Companies mentioned in this report:
Lao Telecom (LTC), Thaicom, ETL, Unitel, Lao Asia Telecom, Star Telecom, Viettel, Beeline, Millicom, Vimpelcom, Planet Online, Sky Telecom, China-APMT.