Laos remains a country with an underdeveloped infrastructure, particularly in rural areas. It has a basic, but improving, road system, and limited external and internal land-line telecommunications. Recently, the country has faced a persistent current account deficit, falling foreign currency reserves, and growing public debt.
The Internet penetration rate was of only 34% in 2018, less than half the continent’s average rate. The system is based upon a radiotelephone network to communicate with remote areas. The fixed-broadband penetration is very low due to dominance of mobile platforms. In recent years there was a strong boost in mobile broadband penetration but it is still low compared to other Asian markets, and mobile broadband Internet services have expanded thanks to 4G services.
Laos has had mixed success in the roll-out of infrastructure and delivery of services to the general population. Fixed broadband penetration is still limited, especially because of the limited number of fixed lines. Until 2023 growth is expected to continue but overall market penetration will remain extremely low. On the other hand, the mobile sector has been going through a difficult period, because the operators are now working in an environment where the regulator is keeping a tight hold on pricing and there is little room for effective competition. Nevertheless there has been an accelerated expansion of mobile broadband services due to the launch of 4G services. The National Authority of Post and Communication (NAPT) is the regulatory body for the telecommunications, directly controlled by the Prime Minister Association Office of Laos.
The government of Laos, one of the few remaining one-party communist states, began decentralizing control and encouraging private enterprise in 1986. Economic growth averaged more than 6% per year from 1988-2008, and Laos’ growth has more recently been amongst the fastest in Asia, averaging nearly 8% per year for most of the last decade, but has declined over the past year and is expected to be around 6.8% in 2017, according to the IMF.
Laos’ economy is heavily dependent on capital-intensive natural resource exports. The economy has benefited from high-profile foreign direct investment in hydropower dams along the Mekong River, copper and gold mining, logging, and construction, although some projects in these industries have drawn criticism for their environmental impacts.
The government appears committed to raising the country’s profile among foreign investors and has developed special economic zones replete with generous tax incentives, but a limited labor pool, a small domestic market, and corruption remain impediments to investment. Laos also has ongoing problems with the business environment, including onerous registration requirements, a gap between legislation and implementation, and unclear or conflicting regulations.
Lao Telecommunication (aka “Lao Telecom”) is a comprehensive telecommunications service provider in Laos. Its network covers all provinces throughout the country. It is the leading telecom operator offering a comprehensive range of services. Established in its current form in 1996, the company is a joint venture between the Lao government, holding 51% of shares, and investors from Thailand, Shenington, which hold 49% for a 25 year term. Lao Telecom services include PSTN (fixed line), GSM (Mobile phone), CDMA(fixed wireless telephone), International Call (IDD & VOIP), and Internet service (dial up, Board Band & wireless internet, Fiber to Home, lead line, 2G,3G & 4G LTE).