Executive SummaryCambodia’s flourishing mobile market continues to play an overwhelming role compared with the country’s fixed-line market.
With the number of mobile subscribers having passed 900,000 in early 2005, fixed-line subscriber numbers remained at around 40,000.
Internet penetration remains particularly low, with the services on offer being notably expensive in comparison to other countries in the region.
As its efforts are directed towards building up its telecommunications infrastructure, the country continues to struggle with the legacy resulting from years of civil war and instability.
Cambodia’s general elections in July 2003 turned into a stalemate with the incumbent, Hun Sen, failing to win the two-thirds majority required to form a government.
In the absence of a functioning government, all infrastructure projects involving international aid were suspended and government funded projects were also constrained, with a corresponding impact on foreign investor confidence.
The stalemate was resolved in July 2004.Laos - With the giant Nam Theun 2 hydro project now proceeding and the Sepon gold and copper mine now in operation, the tiny economy of Laos has been given a major boost after years of struggle.
Hopefully the country will now find some economic equilibrium, allowing it to focus on building its national infrastructure, including telecommunications.
With a low fixed-line teledensity of just under two telephones per 100 people by early 2005, the country has been looking to foreign investment to boost the telecoms sector.
The joint venture formed by the government with the Thai company, Shinawatra, in 1996 was not initially a success, Lao Telecom really only having an impact once the market was opened up to competition in 2002.
Mobile phone services finally took off in early 2003, the number of subscribers increasing sevenfold in just 2 years.
The Lao telecom sector still has many issues to address.
Despite the recent rapid opening up of the market, the regulatory progress continues to lag behind market developments.Myanmar’s telecommunications sector continues to be dominated by the state-owned monopoly telephone service provider, Myanmar Posts and Telecommunications (MPT).
The country’s telecommunications is characterised by what can only be described as stunted development and this in turn reflects the wider problems of the country and its economy.
Myanmar’s official economic data is not considered reliable, making actual growth rates difficult to ascertain.
As Myanmar struggles with its chronic political problems a fresh round of soaring inflation has hit the country.
Fixed telephone line penetration is still less than 1% and mobile services are limited and prohibitively expensive.
Internet access continues to be problematic, being severely restricted in its availability to the general public.
The country’s centrally planned economy is plagued by weak fiscal and monetary management, resulting in major economic imbalances, which will not be easily or quickly resolved.
These problems, combined with an overarching lack of transparency, have naturally frightened off foreign investment.
The government has simply been unable to help the struggling MPT to generate any serious level of capital investment in telecoms infrastructure.
Thailand’s telecom sector has certainly been exhibiting a lot of energy.
Over the last four or five years, the country’s mobile market in particular has been recording strong annual growth.
By early 2005, mobile penetration was approaching 45%.
The subscriber levels reached represented a seven-fold increase since 2000.
The country has definitely been benefiting from a liberalised market.
However, a feature of the government’s telecom reform efforts over the last five years has been a general tardiness in implementing key changes.
Of special note has been the slowness in establishing the country’s new regulator, the National Telecommunications Commission (NTC), which finally came into being in late in 2004 – a long time after the enabling Telecommunications Act was adopted as law in 2000.
Having now become operational, the NTC was not likely to have a big impact on the market in the short term.
There have been similar delays in the privatisation of the state-owned telco giants, TOT and CAT.
Whilst Internet has been popular in Thailand for some years now, broadband access had been languishing.
In 2004, however, the number of broadband subscribers suddenly increased six-fold.
Broadband penetration remains low at less than two subscribers per 10,000 people.
Vietnam set itself some ambitious targets for the expansion of its telecommunications infrastructure.
Initial efforts to fast-track the expansion of the national network had their shortcomings.
But the introduction of a limited level of competition into the telecoms market, combined with a generally improved economic climate, has seen some vigorous growth in the sector.
The mobile market has been especially dynamic, growing at an annual rate of more than 60%.
The strong growth was likely to continue, building on the 5 million mobile subscribers in the country in early 2005.
Some analysts expect the total number of mobile subscribers will exceed 21 million by 2008.
At the same time, the country’s fixed-line subscriber base has also been continuing to expand and has passed 6 million for a teledensity of over 7%.
And despite the government’s cautiousness about the Internet, this segment of the market is gaining a strong foothold, with Internet user penetration now estimated at a healthy 8%.
Increased foreign investment remains the key to expansion.
The continuing strong government involvement in the telecom sector, however, still raises major questions about its commitment to deregulation and liberalisation.