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Thaicom considers leaving Laos
The Lao government may have to find a new business partner for the Lao Telecom Company in the near future, as Thaicom is considering halting its operations in the country.
Newly appointed Thaicom CEO Ms Suphajee Suthumpun said last week that the company was considering pulling out of the mobile phone business in Laos and Cambodia because of bleak prospects and cut-throat competition.
“We are pondering many alternatives, including pulling out of there. The decision on this matter should be made soon,” she said, as quoted on the Total Telecom website on Thursday. “We may get rid of them, keep one of them, or keep both; it's all possible.”
Thaicom holds a 49 percent share in Lao Telecommuni-cations Co., while the rest belongs to the Lao government. Lao Telecom was established in 1996, and is one of four cell phone service providers in Laos.
Poor business performance is one of the main reasons Thaicom is considering winding up its operations in the neighbouring countries.
The weak performances of Lao Telecommunications Co. and Cambodia's Mfone Co have been a drag on earnings at Thaicom, whose satellite business performance has been steadily improving, according to the Total Telecom website.
Lao Telecom has joined with Thai and Cambodian cell phone service providers to reduce airtime service fees for their cell phone subscribers in the three countries since early this year, hoping to attract more customers and improve business.
However, according to the TeleGeography website, Thaicom's revenue from telephony services in Laos and Cambodia from April-June, 2011, was 274 million Thai baht (US$9 million), down by 26.7 percent compared to the 374 million Thai baht in the second quarter of 2010, due mainly to lower revenues per minute of usage due to competitive factors.
In particular, Mfone faces a price war versus seven operational cellular rivals in Cambodia (eight until the merger of two companies earlier this year). Lao Telecom is also facing increased competition, despite making a 12.7 percent year-on-year increase in subscribers for the year ended June 2011 and currently ranking number one in market share.
According to a report from the Bangkok Post, Th aicom reported a second-quarter net loss of 24.56 million baht, narrowing from a loss of 155.16 million baht in the same period last year. Consolidated revenue in the second quarter was 1.86 billion baht, up 26.5 percent from the first quarter. Of total earnings, 1.461 billion baht came from satellite service, 274 million from mobile phone businesses in Cambodia and Laos, and 127 million from broadband Internet and media.
Ms Suphajee said Thaicom's improvement was due to a 35.1 percent increase in iPSTAR broadband satellite service and a 17.6 percent jump in broadband and media earnings.
vientiane times
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