The three operators, Lao Telecommunications Company (LTC), Enterprise of Telecommunications Lao (ETL) and Star Telecom Co Ltd, made the decision to cut both mobile and fixed line links with Beeline after it was found to be offering special promotions which infringe regulations agreed upon last week.

According to LTC Deputy Director General Mr Chanthavone Sosamphan, all four telecom operators had agreed on October 6 to stop offering special promotions such as free call credit and messaging services.

Deputy Minister of Posts and Telecommunications Mr Padapphet Sayakhot confirmed yesterday that the ministry had acknowledged the agreement.

“The ministry did not order them to disconnect with Beeline. However, the four operators had agreed among themselves to cut the connection if an operator broke the regulation,” he said.

Mr Chanthavone said that at present LTC has only cut off its mobile phone link with Beeline, while ETL Director General Mr Khammouane Xomsihapanya said his company has cut off both mobile phone and fixed line connections with Beeline.

Star Telecom Chairman Mr Oulaha Thongvantha said “How long the disconnection lasts is dependent on VimpelCom's progress of improvement.”

Beeline customers can currently only access services on the Beeline network.

“We will have an urgent meeting between the four operators next week to find a solution,” Mr Padapphet said.

In August, the ministry ordered telecom companies in Laos to stop offering special promotions such as free call credits, sim cards and messaging services, so they could increase their profits.

Over the past two years, increased competition and special promotions have resulted in reduced call service charges and offers of free call credits and cash prizes that have caused revenues to fall.

LTC reported in February that its revenue for 2010 fell short of their target by more than 19 percent. It received about 733.3 billion kip (almost US$91 million) in revenue before tax last year, which was about a 17 percent decrease compared to 2009.

ETL reported that income for 2010 fell by about 8 percent compared to the previous year. It received about 422 billion kip (almost US$53 million), which was about 90 percent of the target.

The drop in revenue was attributed to growing competition in the telecom sector between the four telecom providers, which had been jostling for larger market shares by offering reduced service fees, product costs and free call time.

The tax contributions of telecom operators to national revenue also dropped.

Mr Padapphet said tax contributions by the telecommunications sector was about 1.6 trillion kip (US$199.2 million) last year, down from over 1.93 trillion kip (almost US$240.3 million) in 2009.

As a result, the ministry aims to enforce stricter regulations on telecom operators and ensure fair marketing campaigns are used.

(Source: Vientiane Times)