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Lao Telecom services not impacted by marketing regulation
Lao Telecommunications Company (LTC) services will not be affected by the government's recent regulation and crackdown on telecom marketing.
In August, the Ministry of Posts and Telecommunications ordered telecom companies operating in Laos to stop offering special promotions to attract more customers such as free call credits, sim cards and messaging services.
“The regulation is good for all operators because it has increased their profits,” LTC Deputy Director General Mr Chanthavone Sosamphan said recently at a thank you party for the company's dealers and partners.
Over the past two years, increased competition and special promotions have resulted in reduced call service charges and offers of free call credits and cash prizes that have caused revenues to fall.
“The tax contributions to national revenue also dropped,” Mr Chanthavone said.
LTC reported at the company's annual meeting in February that revenue for 2010 fell short of their target by more than 19 percent.
The company received about 733.3 billion kip (almost US$91 million) in revenue before tax last year, which was about a 17 percent decrease compared to 2009.
About 248.16 billion kip (almost US$31 million), or 39 percent of the company's 2010 revenue, was paid in taxes, which was just over 70 percent of the planned figure and a drop of around 8.6 percent compared to 2009.
Enterprise of Telecommunications Lao (ETL) reported at its annual meeting that income for 2010 fell by about 8 percent compared to the previous year.
It received about 422 billion kip (almost US$53 million), which was about 90 percent of the company's target, and contributed about 72 billion kip to national revenue, or 3.2 percent less than in 2009.
The drop in revenue was attributed to growing competition in the telecom sector between the four telecom providers that are jostling for larger market shares by offering reduced service fees, product costs and free call time.
Laos's two other telecom companies are Star Telecom and VimpelCom Lao Co Ltd.
Posts and Telecommunications Deputy Minister Padapphet Sayakhot said tax contributions to the national coffers by the telecommunications sector were only about 1.6 trillion kip (US$199.2 million) last year, a large decrease from the previous year.
Mr Padapphet said tax contributions amounted to over 1.93 trillion kip (almost US$240.3 million) in 2009.
As a result, the ministry aims to enforce stricter regulation of the telecom market and ensure fair marketing campaigns are used. The ministry expects taxes paid by telecom companies to exceed 1.8 trillion kip this year.
LTC is budgeting for about 839.4 billion kip in revenue this year, of which about 272.9 billion kip will go to tax contributions.
ETL expects earnings to reach 453 billion kip (US$56.4 million) this year and to pay over 79 billion kip (almost US$10 million) in tax.
vientiane times
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