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Cambodia & Laos Telecommunications Report Q1 2014 - New Study Released

Recently published research from Business Monitor International, "Cambodia & Laos Telecommunications Report Q1 2014", is now available at Fast Market Research


Boston, MA -- (SBWIRE) -- 01/06/2014 -- Following the exit of VimpelCom from the Cambodian market, there are fears that the company may also choose to withdraw from Laos as well. Both countries have a relatively well-developed mobile sector, but declining ARPU levels, slowing growth opportunities and intense competition are having negative effects on operator revenue. VimpelCom has reported net losses for its South East Asian operations over the past year and a half, partly as a result of subscriber losses and low spending. Prior to VimpelCom's exit, Thaicom's Cambodian unit filed for insolvency and merged its operations with Mobitel.

The region is becoming less attractive for mobile operators and we expect further withdrawals and consolidation to occur over the next year. The Cambodian and Laos fixed-line industries are still expected to experience growth at least until the end of our five-year forecast period to 2017, but mobile substitution is becoming an increasing threat, especially when operators step up their rural expansion plans. The mobile-over-fixed substitution is also likely to play out in the broadband segment, considering the lower cost associated with mobile broadband products and services.

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Key Data

- Release of new data from regulators has led to some revisions in forecasts for Cambodia, while Laotian projections remain mostly unchanged. 2013 ARPU for Cambodia faces downside risks from potential price wars, with recommendations from the International Telecommunication Union (ITU) that the minimum call prices could be lowered.
- LTE services have been made available in Laos, and Cambodia could follow suit in the next few years. However, we do not expect this to provide a significant boost to the overall broadband market due to a lack of demand and consumers' low purchasing power.

Key Trends And Developments

In May 2013, all mobile operators agreed with the Telecommunication Regulator of Cambodia (TRC) to stop offering excessive free calls aimed at increasing their market shares. They have also agreed to set a minimum price of US$0.045 per minute for on-net calls and US$0.0595 per minute for off-net calls. BMI expects the new consensus to improve ARPUs and margins for operators.

Russia's Vimpel Communications (VimpelCom) announced on April 19 that it has sold its entire indirect stake in Sotelco (branded as Beeline Cambodia) to its local partner Huot Vanthan. The possibility of exiting Cambodia was flagged up in late 2012 as part of VimpelCom's plan to focus on its more profitable businesses. The divestment chimes with BMI's view that the Cambodian telecoms market has long lost its lustre and Laos could be next to follow.

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