CHAPTER 2: ANALYSIS OF VIETTEL'S BUSINESS ENVIRONMENT IN LAOS
2.2. Micro-environment analysis – Porter’s 5 Forces Model
2.2.1. Overview of the telecommunications industry in Laos
In nearly a quarter of a century of innovation, reform, opening up and integration (since19986), the face of road traffic in Laos has made great progress. The current domestic road system with a total length of about 31.2 km has given people and international visitors access to all important points in the country and can go to neighboring countries in all directions. ODA aid and loans from foreign countries and international financial institutions. Accordingly, the north-south direction connects the South (Guangxi, Guangdong...) and southwest (Yunnan) China and Myanmar with Cambodia in southern Laos and east-west, connecting Vietnam in the east with Thailand and Myanmar in the west. The road system in Laos connected to countries in the greater Mekong subregion (GMS) contributes greatly to laos' socio-economic development and enhance its international standing.
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Although there have been many improvements compared to the past, the transport system, electricity, and water system in many localities in Laos, especially in rural and mountainous areas, is still quite sketchy and does not meet the living and production needs of the people.
Relying on the aid of the World Bank and other countries, the Lao government has begun to build modern telecommunications infrastructure based on the 19 89 9th Flagship Plan with the help of the International Telecommunications Organization (ITU). After the installation of Fujitsu FETEX 150 switches, year 1994 at the main centers, the national switching system of Laos reached 55% digital form. Shanghai Bell's equipment is deployed in several provincial centers. After being supplied by Alcatel and installed in 1994, 1995, the transmission axis was built between Vientiane and LuangPrabang in the north, Paksane and Thakhek in the central and Savanakhet and Pakse in the south.
In 2008, Plessey Asia Pacific Pty Ltd. was contracted to expand the micro- transmission network, phase 1 was completed between 20 09, phase 2 was completed in year 2010.
Thailand's Shin Satellite has provided Lao Telecom with a Thaicom satellite- powered backbone system connecting Vientiane to five provinces, with hubs in LuangPrabang, Savanakhet, Bokeo, Xiengkhuang and Champasack. However, so far, the service has not officially been put into operation.
In November2008, Thailand's TTI company was contracted to upgrade the micro- triple axis from Vientiane to the southern regions of the country under a $5 million project.
The German-funded rural telecommunications project was started in 1994 and ended phase 3 at the end of 2 10. Phase 3 has an investment capital of about 2.7 million USD and provides services in 30 districts. The German government has also approved a
$4.9 million cost for phase 4 and phase 4 that has begun to be underway. Phase 4 is the final part of a $17 million project from German aid to Laos' telecommunications industry.
In2011, StarTelecom in Laos cooperated with Viettel Vietnam and Viettel Cambodia to complete the construction of the Vietnam-Laos-Cambodia axis network using wavelength optical channeling (DWDM) technology with a total capacity of
400Gb/s connected to many border crossings to facilitate economic development and for people in the region including Laos.
The international switchboard was set up at Vientiane in 1987 under Australian aid. In addition to the micro-triple connection to Thailand, all traffic to and from Laos over a long period of time is via satellite channels. Much of this traffic is transferred through Australia's Telstra network. After 1996, traffic was transferred through more providers. The main change in the international market is the emergence of VoIP services.
In year 2002, both Lao Telecom and ETL began offering prepaid VoIP cards even though the majority of VoIP traffic was illegal and illegal.
With German aid, Laos has been involved in a fiber optic cable project from Shanghai to Singapore that runs through Vietnam, Laos, Thailand and Malaysia (China- Singapore Cable – CSC). The participating representative is ETL with a design capacity of 2.5Gb /s, the cable uses Synchronous Digital Hierarchy technology (SDH) and transfers traffic between East and Southeast Asian countries based on the Droit de Passage principle (DDP) and provides connections to other main cable systems.
It can be seen that the network and telecommunications infrastructure of Laos today has improved much compared to before, but it is still quite sketchy and disproportionate to develop a modern and dynamic telecommunications market.
2.2.1.2. The demand of the Lao telecommunications market
With a population of over 7 million people, Laos is a market with great demand for instant food items, cereals, plastics, sanitary porcelain products and especially telecommunications-related services. However, compared to other countries in the ASEAN region, the development of the telecommunications sector in Laos is still in the beginning stages, consumption is still low and limited mainly in big cities. The reason is that the intellectual level, the population is not large, the purchasing power and income of lao people are not high. Besides, Laos also lacks experts in this field, the school offers specialized courses in information and communication technology in Laos currently very few, the schools most do not meet international standards.
Starting from 2008, with the emergence of foreign joint venture providers, the proportion of people with access to telecommunication services such as the Internet and 17
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telephone increased significantly. Along with the rapid growth of the economy, Laos' demand for telecommunications services tends to increase rapidly, requiring suppliers to adopt new technologies to satisfy the needs of the people.