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Telecoms sector tax contribution set to rise
The National Authority of Post and Telecommunications (NAPT) expects taxes paid into the national treasury by the telecoms sector to exceed 1.8 trillion kip this year - up from 1.6 trillion kip last year.
“However the newly adjusted contribution forecast is below the 2 trillion kip initial target,” said NAPT Vice President Mr. Padapphet Sayakhot last week.
The contribution target for the telecoms sector was lowered as a result of the 2010 contributions falling to 1.6 trillion kip, a decrease from more than 1.7 trillion kip in 2009.
The drop in tax revenue is attributed to the growing competition over the last 12 months, which has seen large telecom providers jostling for a greater market share.
“But we expect taxes paid by the sector to rise to about 5 trillion kip in 2015,” Mr. Padapphet said.
Mr. Padapphet believes tax contributions will increase by 2015 because operators will have completed their service improvement and network expansion projects.
“By that time the sector will have about 5 million customers,” he said.
Laos currently has four telecommunication companies - Lao Telecommunications Company (LTC), Enterprise of Telecommunications Lao (ETL), Star Telecom and the Millicom Lao Company.
ETL now has over 985,000 mobile phone customers, more than 18,000 fixed line phone customers and about 3,500 internet customers.
LTC has more than 1.5 million mobile phone customers and Star Telecom now has about 1.3 million to 1.4 million customers.
The four companies are now busy improving their networks and competitiveness. The main focus of competition has been to offer reduced service and product fees and free call time.
Competition for market share is heating up and all companies are offering cheap services in a bid to attract more customers. However the reduction in service fees has impacted on the companies' revenue earnings and therefore their tax contributions.
Until the mid-1990s, Laos had only two telephone companies. Then, in 1995, LTC signed an agreement with the government to become the only supplier of telephone services for the next five years.
When the contract expired in 2000, ETL was established. Millicom Lao, which provides only mobile phone services, came into operation in 2003 and Star Telecom was launched in 2008.
Star Telecom is a joint venture between Lao Asia Telecom State Enterprise, which opened in 2002, and Viettel Global of Vietnam.
vientiane times
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