Lao Telecommunications Company (M-Phone)

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In October 1996, Lao Telecommunications Company (LTC) was granted a 25-year concession to operate telecommunication projects in Lao. The concession included the operation of a Digital GSM mobile phone network, a public switching network (PSTN), a public telephone network, an international telephone service, and a paging network. As part of the agreement, the mobile joint venture between Shinawatra International and the Lao government created in 1993 was transferred to LTC. The company was set up as a joint venture company between the state-owned Enterprise des Telecommunications de Lao (51%) and Shinawatra International, a subsidiary of Thai group Shin Corporations (49%). Shinawatra International later sold its operations in Laotel to another subsidiary of Shin Group, Shin Satellite. In 2007, Shin Satellite PCL sold its 49% share in Lao Telecommunications, to Asia Mobile Holdings for US$200mn. The concession agreement consisted of two separate contracts. Under the first one, Shinawatra was committed to develop telecommunications services in the country; the second one was to establish Lao Telecommunication Co. as a joint-venture company to operate the telecom services. The company committed to invest US$100 million over the first five years of the concession period to create a modern telecommunications network. As part of that expansion, the company had to expand the fixed network by 3,000 connections in 1997 and reach to total of 20,000 by 1998. The company also agreed to establish a mobile phone network and payphone service. The joint venture was not granted exclusive rights. If Lao Telecommunications Company failed in implementing any project or could not accomplish its task, the government was enabled to award telecommunications projects to other companies. The total value of all the contracts was US$398.4 million. As of December 2006, Laotel had a total of 391,000 mobile and fixed line subscribers. From the 2005 Annual Report - As at 31 December 2005, the Group’s share of LTC’s capital expenditure contracted but not recognised in the financial statements is USD 5 million or approximately Baht 205 million (2004 : USD 17 million or approximately Baht 675 million). (WB: So total investment for the year should be about US$10 million).