Internet Development in Lao PDR

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					ASEAN workshop on Measurement of Digital Economy
        September 19-20, 2002, Bangkok, Thailand

   Status of “E” development in Lao PDR

               Phonpasit PHISSAMAY
      Director of Information Technology Center
     Science Technology and Environment Agency
Country Background

• Geography:
   –   Area: 236,800 Km2
   –   70% of mountains and high plateaus
   –   1898 Km along the Mekong river
   –   18 provinces, 142 districts and 10,912 Villages
• Population
   –   5.2 million (2000)
   –   Growth rate 2.8 %
   –   Families are large (average 6 persons)
   –   85% lives in rural areas
• Economy:
   – The Lao economy is mainly based on agriculture, which employs over
     half of the work force and contributes over 50% of GDP
   – Annual per capital income of 290$ (2000) - LDC
   – 39 % of population lives in poverty
Telecommunication development

• Less than 4% of household have a telephone, Less than half of Laos’
  districts have fixed telephone service and only urban areas. There is a
  waiting list of 8,897 alone in Vientiane
• The GSM was introduced in1994, now the network is available in 9
  provinces, estimate that is less than 10% of population covered by
  mobile signal. In 2001, mobile subscribers accounted 1/3 telephone
  with the mobile density 0.25%. The subscribers grew by 75%
  between Jan-Sep 2001
• In year 2000 the M-Phone prepaid service launched, there were 5,402
  subscribers in 2001.
• The price still very expensive for both fixed line and mobile.
• In 2001, the sector has been open for competition
• The nation a faces immense technical and commercial challenges
  expanding telecommunications, due the most of population resides in
  rural areas, transport and electrical infrastructure are scare and
  income are low.
Internet development

• Lao PDR has been one of the last countries in Asian region to
  establish full Internet connectivity, Lao PDR has largely remained
  disconnected from transnational world of cyberspace.
• Government ministries make little use of the global network and the
  business sector has equally been slow to implement Internet related
  application, there are several reasons:
   • The most obvious one is the lack of infrastructure. Nonetheless,
      only a faction of existing PCs is actually connected to the
   • Few government officials use the Internet and If they do, it is
      mainly to exchange e-mail.
   • There is no clear policy and lack of ICT master plan.
The Market today (Internet development)

• LANIC has just certified 3 official ISPs license to Laotel, Lanexang
  and Champalao, also discussion on extending license to Globenet and
  Planet companies.
• At September 2001, they had around 2,900 subscribers with LaoTel
  controlling around three quarters of the market. Based on multiplier
  users, estimated around 9,000 users in the country. The users has
  increased from 1/10,326 in 1998 to 1/615 by September 2001
• Approximately 60 Internet café operate in Laos, with about 45 in
  Vientiane. The users at Internet café has grown by 50% if compared
  to the previous year.
How much does its cost (Internet development)

• The ISPs and Internet Café were independently setting the prices
  based on users demand and market competition. However most of
  them are targeting to foreigners and big companies customers, which
  are limited to Laotian who are not using the Internet for commercial
• The dial-up Internet pricing is relatively expensive for South East
  Asia region (1 $/h for ISP + 34 $ cent/h for Telephone charge).
• The wireless is 200 $ per month plus 2,500 $ for installation.
• Internet Café charge between $ 0.55 - $1.51 per hour
The Internet Users (Internet development)


                                              Government: 279 Users
                                              Local companies: 590 Users
                                              Local people:653 Users

                                              Foreign people: 1378 Users


•   The government does not extensively use the Internet or ICT. Not all
    ministries have Internet access and for those who, have, the access is also
    limited to a few Internet Account. The average number of PCs with Internet
    Access in each ministry is about 10-15 PCs.
The comparative    (Internet development)

   N/O     Description          Year 2000   Year 2001

    1           ISPs                2       6 = 1+3+2

    2       Internet Café           11         60

    3     Subscriber Users        1934        2900

    4     ISP Service Fees         2$/h      0.5 $/h

    5     Café Service fees       3 $/h      0.6 $/h

    6      User expenses        60$/month   30$/month

• There is little in the way of E-business, which the 5 reasons:
    • E-business are very new concepts, in the Lao PDR. Little is
      known about the culture and technology, therefore it is very
      difficult for business to identify the potential benefit.
    • Overall Internet access and the number of Internet users are too
      low to justify the investment required to establish and E-business.
      The only real feasible business endeavors related to tourism
    • There is a definite lack of expertise and experience. Local
      businesses that have web sites often use their sites only as
      advertisement tools
    • There is little need for local business to extend their operations.
      Market concentration is Local
    • In the country still lacking of Credit card system, E-banking, E-
      payment and cyber law.
E-business (2)

• Some initiatives related to E-business:
    • The ministry of Commerce has recently established the Trade
      Information Center, which also created portal website for trade
      promotion as well as organized the E-commerce seminar.
    • The National Tourism Authorities has also established the
      Tourism Information Center, which also provide the online
      information for promotion the tourism activities and business.
    • The ISPs also provide the E-business and e-commerce solution
      for some private companies such as design and hosting websites
      for them, including the money transaction.
    • The Information Technology Center has also regularly conducted
      seminars and training courses on e-commerce in Vientiane.
    • With the E-ASEAN framework, the national taskforce is also
      working out on cyber law and IAI.
IT Administrative bodies

Two main bodies:
1.   STEA was given approval by the PMO to implement the overall
     policy for monitoring and controlling IT in Lao PDR.
     • IT monitoring and Management (DST)
     • IT R&D (ITC)
     • Knowledge base capacity development (ITC)
     • Creation & Approval of IT Standardization (DST + ITC)
     • IP & Copy right (DST + DIP)
     • Consultant and Service (ITC)
2.   LANIC was given jurisdiction over matter regarding national internet
     • Monitoring and Management of Internet in Lao PDR
     • Coordinating with regional and Internet organization
     • Operate National Internet gateway, Government ISP (ITC)
IT development issues

1.   Lack of Coordination: Many areas of overlap and redundancies in current
     activities regarding IT development. There needs to be coordination system
     in place to manage resources, to minimize inefficiencies, and to maximize
     development output and benefits.
2.   Lack of Standards: There are virtually no IT standards. Both private and
     public sectors use several convention to integrate IT into their current
     organization structure (Character sets & software and Hardware for LAN,
     WAN and Intranet)
3.   Lack of IT knowledge Capacity : In the government is lack of expertise in
     areas relating to formulation, implementation, maintenance of National IT
     strategies and policies. In education institutes is a lack of resources and
     knowledge base for the integration and promotion of IT.
4.   Infrastructure: The current telecommunication infrastructure does not
     supported technologies for high-speed information access. The poor power
     supply, which suffers power failure and very bad voltage and frequency
5.   The low level of purchasing power buy computers by both private and public.
6.   Localization issues (Software in Lao platform, Content & book in Lao)

•   In country such as Laos, with so many pressing basic development needs, it is
    not surprising that attempts at establish Internet connectivity and E-business
    have been hampered by a general lack of skills and resource, Low levels of
    PC penetration, combined with poor telecommunication network with also
    slow the process.
•   The necessary initiatives:
    •    The urgent and greatest need in the country is for skilled professional
         and technical informatics experts to plan, design, install and maintain.
    •    National ICT policy and Master plan must be developed
    •    Create the environment for the experts, teachers and researchers in order
         to be coordinated and united.
    •    Promotion of IT education and localization
    •    Strengthen the Internet penetration and E-business opportunity
    •    Create government Intranet and e-government, e-society.
    •    Create the National Standard
    •    Promote the IT industry (Tax promotion and IP&copy right)
Thank you

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