Millicom to tango in Lao mobile market

Three local telecom companies has been offering fixed and mobile phones in Laos, but now the fourth competitor, a Swedish, has entered the mobile business with some trendy new services.
     “Text messages (SMS) and voice messages are special services offered only by our company,” said Mr Ronny Melander, the Swedish General Manager of Millicom Lao Company, Tango.
     According to Melander, customers can send voice and text messages by mobile, which is cheaper than making a phone call.
     “The mobile signal is sometimes not good, but the special services are the opposite,” said Mr Chen Zhi Mine, Administration Manager of Tango. “It means that communication will never stop.”
     Melander said that the company focuses only on mobile services because it is a popular phone market, now quickly catching up with fixed phone services. He estimated that there would be about 200,000 mobile users by 2006.
     Tango’s first service will start in February or March 2003. It will be offered in Vientiane municipality, Luang Prabang and Savannakhet provinces. Then the company will expand to Khammuan and Vientiane provinces.
     In January 2003, Millicom has completed installation of 16 base stations in the capital, two stations in Savannakhet and two in Luang Prabang.
     Melander told reporters that Tango has invested about US$ 10 million for the first phase and plans to cover the country within three years.
     “We do not know when we can get the capital back because investment depends on markets,” he stressed. “We will invest about US$ 100 million over the next ten years.”
     He explained that Laos has about 5 million people, which is is not a big market but it is big enough for four companies. Milicom believes that telephone use will grow quickly in the future due to competition between providers.
     “Who will win the competition depends on customers. They will decide who is the best because they are the bosses,” he said. “The competition will also bring the service cost down.”
     Tango, which is the Swedish Millicom International Cellular, is entering a joint venture agreement for 20 years. After that it will see what should be developed. Telecommunications are infrastructure, so they take a long time and a large investment, he added.
     While the telecom companies are competing for customers, there are many telephone shops booming along the roads.
     “There are now more than 18 mobile shops in Saylom, Sisavath and Hasady villages in Vientiane,” said a Sisavath villager. “Many mobile shops are being built now.”
     There are many brands of mobile available including Nokia, Siemens, Philips, Ericson and Motorola.
     “The best sales are in Nokia brand. It covers 70 per cent of mobile sales,” said an owner of a mobile shop in Sisavath village. “I am selling about 50 to 70 mobiles a month costing between US$ 120 and US$ 350 each.”
     A Nokia mobile phone cost US$ 1,700 when the Lao Telecom company first introduced it in 1995. The price is now down to just over US$ 100.

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