|Issue:||Asia-Pacific II 2003|
|Topic:||Convergence of Networks in Lao PDR|
|Title:||Director General, Department of Posts and Telecommunications|
|Organisation:||Ministry of Communication, Transport, Posts and Construction (MCTPC)|
Mr Phommathansy Palami is the Director General of the Department of Posts and Telecommunications, Ministry of Communication, Transport and Construction located in Vientiane, Lao PDr He served previously as his country’s Managing Director State Enterprise of Posts and Telecommunications Lao and as Deputy Director for the Department of Posts and Telecommunications. Mr Palami earned a Bachelor of Sciences, EE and a Master of Science, EE from the Ecôle Polytechnique of the University of Montreal in Canada and trained under UNDP/FRANCE TELECOM in France. Mr Palami is the current President of the National Federation of Karate of Lao.
Laos is lacking trained people and financial resources and depends heavily upon foreign cooperation to develop its ITC sector. Nevertheless, Laos is working to leave behind its Least Developed Country status. Laos depends upon land links with neighbours for its communications links to the world. The advent of IP for voice and data has distorted the local telecom market. The official operating companies are losing market share to IP service ‘pirates’ and have been steadily losing ground with their international telecommunications traffic settlements.
The lack of trained people in all sectors hampers rapid change and development. Consequently, Laos relies on foreign cooperation, for both specialists and consultants as well as for financing, soft loans and financial grants. In spite of its technical, financial and human resource problems, the Government of Lao PDR is making great efforts to narrow the digital divide among Asian countries and to no longer be classified as a least developed country (LDC) by the year 2020. Current Situation in Telecommunications Four operating companies share Laos’ telecom market. Two of the operators are 100 per cent state owned; they have, respectively, market shares of 8.7 per cent and 2.5 per cent. The two private companies have market shares of 83 per cent and 5.8 per cent – the larger ‘private’ company is a joint venture between the Lao Government, which owns 51 per cent and SHENINGTON of Thailand with 49 per cent. The telecom networks consist of optical fiber, radio microwave and GSM mobile links. A point-to-multipoint system provides basic communications to the country’s remote, low population density areas. A total of 80 per cent of the population of Lao PDR have access to telecommunications facilities. The networks are fully digitalised and serve 210,000 customers in seventeen Provinces of which 70,000 have fixed-line service and 140,000 mobile phones. All major cities have a local fixed-wire local cable network. These are connected to each other either by radio microwave systems or by optical fiber cable. At the moment there are 4,600 internet users, who can obtain linkage speeds of up to 512 Kbps. Sources of Convergence Lao PDR is on its way from being a landlocked to being a land-linked country. Being landlocked has implications, which lead to cross boarder networking and infrastructure. The New Economic Mechanism and Investment Law has contributed considerably to facilitate these developments. The land linkage strategy has been applied for power supply links to Thailand as well as to the information infrastructure. This article takes a look only at the telecom sector. Convergence of networks in the broader sense of IT, broadcasting and other media, film, music and suchlike, is currently under discussion in Laos. What we experience most strongly at the moment is the pressure from the growing and quickly changing telecom market in a country where regulatory issues are still under discussion and where VoIP (voice over internet protocol) represents a threat, particularly for incumbent operators. It is well understood that telecom technology is the driving force of changes in all sectors of daily life and business. On the other hand, new, currently peripheral business has an impact on development of newer technologies. Consequently the whole of telecommunications will change and require a new infrastructure. Networks and Services The classic telecommunication networks, divided into cable, switching and transmission networks still exist providing voice, data and also for some years internet communication. The mobile networks provide voice communication only. In rural areas voice and fax services are the single applications. Mobile networks are available in all bigger cities. In rural and remote areas point-to-multi point transmission systems allow basic communications services. With the increasing availability of services, the operators need to revise their long-term investment plans. More over the operators are forced to interconnect, which requires the implementation of a sound regulatory institution and framework. IP Communications At the moment, there are six Internet service providers (ISP) that operate in the country’s market. Of these ISPs, only two are owned by the existing network operators. There is also an ‘unlicensed market’ in some cities and in remote areas, which takes advantage of the system and routes national and international communication traffic through the networks of the established operators. The fact is, voice over IP (VoIP) has changed and is still changing the whole telecom sector in Lao PDR Communications Policy and Regulation The Lao National Assembly adopted its Telecommunications Act in April 2001. Since the processes of the legislative sector are time consuming, only a draft of a Sector Policy Statement exists at this time. The Statement and subsidiary legislation, such as decrees and regulations, have not yet been finalised. With the help from a variety of contributors, the Ministry is working on that issue and hopes to complete the Sector Policy Statement and Decrees needed to regulate the telecom law’s provisions and put them into effect. Based on the existing telecommunications law, the Ministry is currently developing and preparing draft regulations for the different telecom sectors and, as well, to inaugurate the requisite regulatory body. The regulations for the Information and Communication Technology (ICT) sector will focus upon the need to broaden public access to services and to keep the real cost of service provision as low as possible. In addition, the question of establishing and maintaining linkages with neighboring countries, especially in the greater Mekong sub-region, will be considered. The full range of today’s technologies will be included in the overall regulatory processes taking into account the current state of ICT development in the world and in the country. IP Communications and Convergence Since there are four telecom operators providing services to customers in Lao PDR, competition is the driving force for improvements in all sectors of the telecommunications industry. As a result, the consumer profits from better and quicker services. The operators are not only forced to provide better services, but also to revise their medium and long-term strategy. The extensive use of IP-based communications has adversely affected the revenues from settlements in recent years. The operating companies, owners of fixed and mobile networks with large scale financial investment and obligations, have had to reduce their tariffs to meet the competition despite their declining revenue. Consequently, the operators have had to streamline their operational activities and quality of service and focus on their core business. To allow the sector to stabilise, the operating companies will require a certain freedom to operate within the new policy framework that the future regulator will be in charge of applying. The network structure in Lao PDR will change to reflect the impact upon the market of the increased IP-based communications. Traditional cable, switching and transmission networks are being challenged by the new IP-based technologies. The evolution of the country’s networks will undoubtedly lead, eventually, to a single fully converged network infrastructure. The introduction of wireless systems will enable the operators to link the semi-urban and remote areas of the country in an efficient and inexpensive manner. Computers and IP are already changing Lao PDRs’ economy. Since both have found their way into the country, business opportunities have increased and private lives of users have changed for the better in many ways. Improved educational opportunities are among the advantages that ICTs are making possible. Competition is the driving force for all business development and expansion in a market economy. Inexpensive and fast communication facilities are regarded as an important precondition for developments within a competitive economy. Conclusion At times unexpected fast developments in both the technical and institutional environments of the telecommunications market have had an impact on the regulatory processes in Laos. The biggest challenge for the Lao Government is to foster the further development of ICT markets and applications. It is the declared goal of the Lao Government to do this in a manner that will help to broaden socio-economic development and hence, poverty alleviation. The government considers the telecom operators to be the driving force in this context. The damaging impact upon investments of the excessively low tariff rates, of unlicensed services, of traffic piracy and the like, will have to be rectified by way of new regulations for the sector. The Ministry of Communications regards the need to pave the way towards fully converged networks and towards the improved delivery of services to all of Laotian society throughout the country as a high priority issue.