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LAO Telecom / Shin Satellite Wireless Satellite, Laos

Key Data

Laos, a small country in Asia (population of under 6 million), is playing the catch-up game in terms of telecoms technology. The telecommunications market in Laos is fairly undeveloped as the country has one of the lowest telecom penetration rates in Asia – just 5% for fixed and mobile telephones combined. The mobile telecommunications sector is actually bigger than fixed as it accounts for over 65% of subscribers. The take-up figures are healthier in the capital Vientiane since businesses demand fast and efficient telecommunications systems for voice communication and data – here the penetration rate is around 25%.

Outside the major cities the situation is vastly different, as there are many villages and townships and a large percentage of its residents are scattered in mountainous and heavily forested rural areas. There are few or no basic telephone services, whether fixed or mobile and a waiting list for fixed lines of between three and five years. Currently, many rural areas are serviced by solar-powered microwave stations which are often non-functional during the rainy season when conditions are overcast much of the time.

Lao Telecom Company (LTC) hopes to expand the number of lines and also to improve the reliability. But competitiveness is the key to the market for LTC; they have to monitor things on a daily basis since Thailand is just across the Mekong River. Any change in the market in Thailand could affect LTC's business, since people could simply cross the bridge to make a cheaper call.


Lao Telecom Company (LTC), a major cellular operator, has a strategy to deploy GSM services in outlying areas as a substitute for fixed telephony services. LTC is 49% owned by Thailand's Shin Satellite and dominates business lines across fixed, mobile, Internet and broadband services. Driven by consistent profits such as its Q1 2004 net profit of 47%, LTC has undertaken a number of projects to expand the reach of telecommunication services. To reach rural subscribers, LTC has embarked on an innovative project to use satellite as a backhaul network to carry voice and data traffic from GSM (450MHz) and CDMA (800MHz) networks into remote parts of the country. First deployment occurred in Laos in July 2004 and already provides over 100,000 people with reliable telephony services.

Trunking is provided by Shin Satellite's IPSTAR network, with Lao Telecom the first to use the service in this way. Shin Satellite offered to use its IPSTAR Mobile Trunk over Satellite solution based on the combination of SHINSAT IPSTAR Service and Memotec's CX Multiservice Access Gateways. Memotec is providing its suite of GSM backhaul products to SHINSAT for performing the interface adaptation between the BTS/BSC digital interface and IPSTAR modem Ethernet interface. Memotec's CX Gateways allow Shin Satellite to use its unique IPSTAR service for GSM backhaul and to rapidly deliver wide cellular coverage with a considerable cost advantage. The goal is that IPSTAR would provide more than 85% coverage of Laos's rural area within a year at one-third of the cost when compared to conventional terrestrial infrastructure.

After a successful trial period of IPSTAR services in Bangkok, LTC approved and recommended the IPSTAR solution to be deployed over the entire country. By the end of 2004, over 58 BTS were deployed with a forecast to add an additional 105 BTS in 2005. Memotec will enable a reduction on the bandwidth requirements on the IPSTAR transponder by up to 40%. Memotec's solution was chosen thanks to a unique combination of GSM vendor transparency, cost effectiveness and quality of the solution.

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The IPSTAR GSM backhaul solution is made possible by the combination of two technologies:

  • The high bandwidth efficiency of the IPSTAR IP based backbone, which improves the economics of using satellite transmission
  • Memotec's GSM ABISXTENDER processing which adapts the BTS TDM interface to the IPSTAR modem Ethernet interface and MF–TDMA technology, while at the same time reducing bandwidth requirements and thus costs


In February 2007 the Information and Communications Technology (ICT) minister of the Thai government set up an 18-member select committee (from ICT and the Justice Department) to consider the possible government buyout of Shin Satellite. A proposal will be ready by mid-2007. Shin Satellite is effectively controlled by Temasek Holdings of Singapore.

The process will also include a gauge of public opinion by means of a survey of 20,000 to 30,000 people nationwide about whether the buyout of the satellite company is appropriate. An investigation by the Commerce Ministry and the Department of Special Investigation into foreign holdings in Kularb Kaew, an entity Temasek set up to buy the Shin shares, is still continuing. Shin Satellite was founded in 1991 by Shin Corp with a 30-year concession to operate satellite services under a build-operate-transfer contract.


In June 2006 Lao Telecom awarded a contract to Ericsson for the expansion of its GSM (TDMA (time division multiple access) based) (900/1800MHz) network in four provinces in the central region of the country. The contract included core and radio network equipment, and covers a comprehensive range of telecommunications services including network deployment and radio network optimisation, and will be implemented by April 2007.

"The Lao Telecom CDMA2000 1X (450MHz) network was completed in October 2006, allowing superior network quality, performance and coverage."

The Lao Telecom CDMA2000 1X (450MHz) (code division multiple access) network was completed in October 2006, allowing superior network quality, performance and coverage in the capital Vientiane, and the Vientiane, Xaisomboun and Bolikhamxai provinces.

The network capacity has also been increased to meet its fast growth of subscribers, allowing it to support more than 70,000 subscribers. Lao Telecom's strategy is to cover the country with CDMA technology as quickly as possible but as CDMA is rolled out to make use of the older TDMA technology by taking mobile phone coverage further out into uncovered areas. Therefore the company will run a GSM (TDMA) and CDMA based network.

The company has said it is in no hurry to implement 3G technology. Laos Telecom provides the best rural coverage of all four of Laos’s mobile telecoms providers (Lao Telecom, ETL, LAT and Millicom). There are about 561,000 mobile subscribers in Laos today, equivalent to 9% of the population.