ICT Development in Lao P.D.R, 2008

ICT Development in Lao P.D.R: Current Status

Xayluxa INSISIENGMAYDirector, Radio Spectrum Management DivisionDepartment of Telecommunications and the InternetNational Authority of Posts and TelecommunicationsTelephone: 856 21 218897 Email: [email protected]

International Symposium on Communications and Information Technologies 2008October 21-23, 2008Vientiane, Lao PDR

Contents:

I. IntroductionII. National Agency responsible for ICTsIII. ICT and DevelopmentIV. Market Structure and ownershipV. Global TrendVI. Telecommunication Sector performanceVII. ChallengesVIII. Conclusion

“If the world is serious about achieving the Millennium Development Goal of halving the number of people living in extreme poverty by the year 2015, ICT must figure prominently in the effort. Everyone – governments, civil society,

and private sector businesses – has a vital stake in fostering digital opportunity and putting ICT at the service of development.”

Kofi Annan, (Ex) UN Secretary-General

Extract from the foreword of the UNCTAD E-Commerce and Development Report

I. Introduction

Country Profile

• Population: 5.6 mill. (2005)(80% live in rural areas)

• Area: 236,800 Km2• Provinces: 17• Districts: 139 • Poorest district: 47• GDP: US$ 4.8 bill (2008)• GDP per Capita: US$850 (2008)• ICTs:- Fixed line: 2.14% (2007)- Mobile: 26.35% (2007)- Tele-density: 28.5% (2007)- Internet: 0.12% (2007)- Radio coverage: 80% - TV coverage: 60%

Development Vision• “New Economic Mechanism” – in 1986• In 1990s national economy grew at an

average rate of 6.3%• Annual growth during 2000-06 was 6.5%• In 2007 the growth reached 7.5%• The Government’s objective is to maintain

the rapid economic growth, meet the MDGs by 2015 and escape from LDC status by 2020

Source: http://www.un.org/ecosoc/docs/pdfs/Lao%20PDR.text.pdf

Recent Economic Growth• During the first six months of 2007/2008 FY , the GDP grew at a rate of 7.9% (8% predicted)

• Service sector grew by 9.9% (7% predicted)• For the 2008/2009 FY, the government will maintain the macro-economic targets at thesame level as in 2007/2008, i.e.

GDP shall grow by 8%agriculture 3.4%industry 1.58%services 9.9%

Source: Vientiane Times, July 9 2008, p.19

Development Vision

2005: Eradicate Poverty by half, Stop opium cultivation

2010: Fundamentally eradicate poverty,

Stop slash and burn cultivation

2020: Out of LDC status

2015: Achievement of MDGs

Source: http://www.rtm.org.la/General%20RTM.php#RTM9

II. National Organization for ICT

National Organization for ICT• Authorité Nationale des Postes et des

Télécommunications or National Authority of Post and Telecommunication (ANPT)

• ANPT created by the PM Decree No.375/PM of 22nd October 2007 and replaced Department of Posts and Telecommunications/MCTPC

• ANPT is a organization under the Prime Minister Office, dealing with policy, strategy and its implementation and administrative issues on Post, Telecommunications and ICT in Lao PDR

Organization Chart of NAPT

Minister to PMOHead of ANPT

Deputy Head ANPT

Department of Administration

Department ofPlanning &

Cooperation

Departmentof Telecommunications and the

Internet

Departmentof Posts

Institute of Posts & Tele

communications

Policy and regulations

• NAPT is responsible for both the policy-making and regulatory function for telecommunications and ICT sectors

• Telecommunication Act was passed and entered into force in 2001

• Telecommunication sector policy 2004• Telecommunication sector policy 2007

(draft)

Policy and regulations• Telecommunication market

– Government has stake in all the operators– Based on ASEAN Framework Agreement on

Services, for value added services the new entry can only take place through a joint venture with Lao service provider or acquisition of existing operators

– Under BTA with the US, Lao PDR has made commitments to provide unrestricted market access and full national treatment for the whole range of basic fixed and mobile (on a facilities basis or by resale, through any means of technology) as well as value-added telecommunications services

III. ICT and Development

ICT’s contribution to GDP• By their very nature, ICTs serve the society in a

way no other industry does, firstly as fast growing industry by themselves generating employment and wealth, and secondly as enablers of social and economic activities.

• ICTs and Telecom sector account for a significant percentage of the GDP in several developed and developing countries. However difficulty arises in assessing the impact of ICTs in terms of direct and indirect benefits, because differences exist in defining the goods and services covered under the ICT sector. The contribution is normally far more then assessed.

Distribution of population and GDP by income group

Income group

Number of economies, 2006

GDP per capita USD, 2006

Population, 2006

Population %, 2006

Total GDP %, 2006

High 57 35 496 1 030 624 15.7% 75.8%

Upper-middle

39 6 514 816 121 12.5% 11.0%

Lower-middle

55 2 062 2 295 478 35.0% 9.8%

Low 52 669 2 408 914 36.8% 3.3%

World 203 7 439 6 551 138 100% 100%

Source: ITU, Trend in Telecommunication Reform 2007

ICT and Development• Well developed ICT infrastructure is the key to rapid

economic and social development of a country. • A number of ITU studies over the past several

decades have analyzed the relationship between the growth of ICT, particularly telecommunication services, and the economic growth and found that a direct link exists between a country’s telecommunication penetration and the GDP.

• According to a study, ICT diffusion accounts for up to 90% of the increase in human development index.

• Although, the link does not explain the correlation or cause and effect relation, it does establish its vital importance for accelerating the economic growth.

Distribution of major ICTs by income group, 2006

38.50%

41.40%

36.40%

25.40%

21.70%9.81%

9.30%

10.90%

16.70%

11.30%

7.40%

11.02%

15.50%

34.60%

53.40%

69.80%75.83%

3.34%1.10%

10.00%12.30%5.80%

36.70%

41.90%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Population Fixed lines Mobilesubscribers

Internet users Broadbandsubscribers

Total GDP

HighUpper-middleLower-middleLow


Asia-Pacific’s share of the global total for various services, 2006

10.90%

9.50%

5.40%

4.10%

2.40%55.50%

37.80%

43.20%

30.60%

28.30%BroadbandSubscribers

Internet users

Fixed lines

Mobile subscribers

Population

Developing Developed


39.2%

40.1%

48.6%

41.9%

57.9%

• In individual countries, some measurements of ICT would be included in their respective capital equipment accounts while others might be classified as Information services. Direct impact of ICT in comparable economic terms cannot be measured without a globally accepted definition. Developed nations have reached a consensus on this issue. Developing countries have not.

• However, there is no denying the fact that ICTscontribute directly and indirectly to the economy in terms of revenue and employment. Their impact on economy can be measured by their contribution to the GDP. Indirect benefits accrue by the use and application of ICTs in other economic sectors and for social activities by the resulting efficiency and productivity increase.

ICT’s and Socio-economic Development

Telecommunications revenue and GDP

• Comparative Indicators of Lao PDR and the East Asia/Pacific Region

Total Telecommunications Revenue (% of GDP)

2000 2001 2002 2003 2004

Lao PDR 1.5 1.5 1.5 1.4 1.6

East Asia and Pacific Region

3.2 3.5 3.7 3.7 3.6

Source: World Bank

• As of December 2007, the Telecommunications revenue has increaseddramatically and accounts for approximately 3% of GDP

Impact of Liberalization on Economies

• Liberalization of economies. Globalization, WTO negotiations on liberalization of basic telecommunication services, followed by privatization, competition and independent regulators have paved the way for rapid growth of ICT sector, so much so, that it is also anticipated while going forward that a major part of the GDP of the country would be contributed by the ICT sector.

Relationship between ICTs and MDGs• For bridging the digital divide, it is imperative to put ICT

firmly in the service of development. • Communication infrastructure, computer availability,

Internet access and availability of alternative access, e.g. through cable, satellite and digital TVs and availability of content in the local language are basic issues.

• The digital divide among households appears to mainly depend on two factors, viz. income and education. This fact also establishes a direct relationship between ICTsand MDGs that move us forward in reducing poverty or conversely increasing income and increasing education.

• In fact, ICTs may be applied to all fields of human endeavour and management, to enrich the society through enhancement of capacities at all levels: individuals, organizations, governments, global partnerships.

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

2006 2007 2008 2009 2010 2011

US$

milli

ons

GamblingAdultTVVideoImagesMusicGames

Global mobile entertainment revenues

Source: Informa.

IV. Market Structure and ownership

Telecommunications/ICTs Market Telecom Operators/ISPs OwnershipEnterprise Telecommunication Lao (ETL)

Re-established in 2000 - 100% Government of Lao PDR

Lao Telecommunication Company (LTC)

Established in 1996- 51% Government of Lao PDR - 49 % Shinawatra Int’l Co., Thailand

Star Telecom Established in April 2008- 51% GoL (through LAT which is 100% MoD)- 49% Viettel Global (Vietnam State owned operator)

Millicom Lao Co. Ltd (Tigo) Established in 2003- 22% Government of Lao PDR- 78% Millicom Int’l Cellular (Sweden)

SKY Telecom Co., Ltd (SKY) Established in 2005- 30% Government of Lao PDR - 70% Skytel & Net Co., Ltd, Thailand

Planet Online Established in 1997- Leading private ISP, Australian owned company

Telecommunications/ICTs Market

Telecom Operators/ISPs Technology/ServicesEnterprise Telecommunication Lao (ETL)

- PSTN (Fixed line), GSM900/1800, GPRS, ISP- Dial up, ADSL, HIL, VPN

Lao Telecommunication Company (LTC)

- PSTN (Fixed Line), GSM900/1800, CDMA (WLL),ISP- 3G (WCDMA) service trial launched in July 2008- Dial up, ADSL, IP Star

Star Telecom - PSTN (Fixed Line)- GSM 900/1800

Millicom Lao Co. Ltd (Tigo) - GSM 900/1800, EDGE, WiMAX

SKY Telecom Co., Ltd (SKY) - CDMA2000 1X at 800/1900, WCDMA, Internet - Voice services planned to launch late 2008

Planet Online - Broadband Wireless Internet @ 700 MHz- ISP

ETL (25%)

LTC (63%)

LAT (2%)

MLL (10%)

Telecommunications/ICTs revenue

Revenue Shares, 2007

V. Global Trend

Growth in fixed lines, mobile & Internet, in billions, 1995-2006

0.0

1.0

2.0

3.0

4.0

5.0

6.0

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Fixed lines Mobile phones Internet connections

ICT Growth Trend

Source: ITU World Telecommunication/ICT Indicators Database

Broadband Penetration Trend

Source: digital. Life, ITU Internet Report 2006

Competition: International Trend

Competition is authorized in more than 60% of the countries in Basic and leased line servicesCompetition is authorized in more than 80% of the countries in Broadband and Mobile services

VI. Lao Telecommunications Sector Performance

Fixed network growth

33267 3923546897

67556

89661 90806 92151 94828

7915 1091818452

25538

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

2000

2001

2002

2003

2004

2005

2006

2007

lines

WLLfixed lines

Mobile subscribers

5031 18000 55200 89000

337875

657528

1009565

1478409

0

200000

400000

600000

800000

1000000

1200000

1400000

1600000

2000 2001 2002 2003 2004 2005 2006 2007

0

200000

400000

600000

800000

1000000

1200000

1400000

1600000

2000 2001 2002 2003 2004 2005 2006 2007

Mobile Fixed CDMA

Mobile vs. Fixed

0

500

1000

1500

2000

2500

3000

3500

4000

4500

2000 2001 2002 2003 2004 2005 2006 2007

Dail up ADSL Wireless

Internet access

Other Internet access

0

5001000

1500

20002500

3000

3500

40004500

5000

2003

2004

2005

2006

2007

lines

WirelessLeased linesHILIPStarADSL

Total number of Internet line

350 460 620970

2,538

4,271

5,238

6,624

0

1000

2000

3000

4000

5000

6000

7000

2000 2001 2002 2003 2004 2005 2006 2007

Telecommunications infrastructure• Backbone Optical Fiber

Cables are interconnected with China, Thailand and Vietnam.

• OFC to Cambodia and Myanmar have reached the borders

• Optical fiber networks are connected to 15 provinces and expanding to cover 90% of districts

• GSM networks are expanding to all districts

Targets 2007-2010

July2006

2007 2008 2009 2010

Lines 91,928+12,674

105,000 105,000 105,000 105,000

% 1.8% 1.9% 1.9% 1.9% 1.9%

Lines 837,218 1,077,000 1,292,000 1,551,000 1,861,000

% 14.9% 19.2% 23.0% 27.6% 33.2%

Lines 500 1,500 5,000 12,500 25,000Broadband % 0.01% 0.03% 0.10% 0.25% 0.50%

Mobile

Fixed

VII. Challenges

Regulatory issues

• Need a clear and adequate Telecommunication/ICTs policy on– Licensing to new entrants– Infrastructure sharing – Interconnection– Radio Spectrum– Universal Access

• Sector’s capacity-building

Utilization of ICTs Infrastructure

• ICTs infrastructure is well developed but not fully utilized– Lack of computer literacy– Lack of contents in local language– Limited availability of computers– High prices for connectivity and Internet access

Conclusion• Recognizing the dominant role played by ICTs in

globalization and in attaining the UNMDGs, the governments may seriously consider to create an enabling environment by putting in place suitable policy, regulatory and legal framework and fiscal incentives to encourage investment in ICT industry, network infrastructure keeping in mind the emerging new generation network and services, improve access to network for broadband services in rural areas by establishing Telecentres, Community Service centres, in the true spirit of the WSIS vision, principles and the plan of action.

• The countries should recognize the contribution of ICTs for sustainable socio-economic development and in achieving MDGs and accelerate the sector reform process for attaining rapid growth through private sector participation with Regulator providing a level playing field, creating an investor friendly climate, safeguarding consumer interest, to usher in open market competition leading to better quality of service to end-users at lower cost.

Thank you

a) to connect all villages with ICTsb) to connect all educational institutionsc) to connect all scientific and research centres;d) to connect all public libraries, museums and archivese) to connect all health centres and hospitals;f) to connect local and central government departmentsg) to adapt all primary and secondary school curricula to

meet the challenges of the Information Society;h) to ensure that all have access to television and radio

services;i) to encourage the development of content on the Internet;j) to ensure that more than half the world’s inhabitants have

access to ICTs within their reach.

Summit ObjectivesBy 2015