LAOS Population (million): 6.6 Households (million): 1.2 GDP (USD billion): 7.9 Rural population: 80%

Total Area: 236,800 Km2 Mountain: 70% Province: 17 District: 139

Source 1: WFP Lao PDR, CFSVA Community Survey, 2006

SUBSCRIBERS Wireless Total subscribers (Dec 2012): 5,861,000

89.4% Population penetration

92.3% Average penetration in region 73.4% Average penetration in GDP per cap decile

Broadband Total subscribers (Dec 2012): 75,000 6.2% Household penetration

24.8% Average penetration in region 2.1% Average penetration in GDP per cap decile

Wireline Total PSTN lines (2012): 151,200 12.5% Household penetration

61.8% Average penetration in region 12.9% Average penetration in GDP per cap decile

TELECOM SERVICES Service Providers

Lao Telecoms Company (LTC or LaoTel)

51% Lao Government; 49% Shinawatra

� 900 MHz GSM, and will have 1800 MHz in future

� 450 MHz CDMA for WLL and 800 MHz CDMA for mobility

� Fixed lines, Mobile telephone, Wireless Local � Loop and Internet Service, International

telephone � Fixed and international gateway facilities

ETL (Enterprise of telecommunications Lao 2000)

100% State owned � Owns aid assets from pre-LTC days � Fixed and mobile (900 MHz GSM planned) � Fixed lines, Mobile telephone, Internet service � Operates CSC cable connections to Vietnam and

Thailand Millicom Beeline 78% Millicom: 22%

Lao Government � 900 MHz GSM; 1800 MHz GSM in near future � Prepaid Mobile telephone, Internet Service and,

International telephone Lao Asia Telecom Lao military � GSM network owned by Lao military Sky Telecom Lao Government key

shareholder � CDMA 2000 1x EV-DO for WLL

Planet � internet provider Unitel � officially opened 16th October 2009

� Internet Service Provider (ISP) � Fixed lines, Mobile telephone

Connection Points and Interface

Boten (to China) 2 x GE Friendship Bridge 1 (to Thailand) 5 x GE Friendship Bridge 2 (to Thailand) 2 x GE Dansavanh – Lao Bảo (to Vietnam) 5 Gbps SDH Namphao – Cau Treo (to Vietnam) 5 Gbps SDH Vernkham (to Cambodia) 2,5 Gbps SDH

ETL

35%

LTC

34%

UNITEL

16%

BEELINE

15%

Market Share

ETL LTC UNITEL BEELINE

INDUSTRY INTELLIGENT Telegeorgraphy

Bandwidth continues to grow (CAGR 2007-2011 ~62%) …. but usage levels are low (2011, ~1Gbps)

Broadband Subscriber (exclude 3G/4G Mobile broadband subscriber) forecast by 2016 low (<100k) …

Business Monitor International BMI View : The Cambodian and Laotian telecoms markets are similar in several ways. Both countries have a relatively well-developed mobile sector, although prepaid subscriptions are the norm, resulting in low ARPU levels. Their fixed-line industries are still expected to experience growth at least until 2016 but mobile substitution is becoming an increasing threat, especially when operators step up their rural expansion plans. The mobile-over-fixed scenario is also likely to play out in the broadband segment, considering the lower cost associated with mobile broadband products and services. Key Data

• Cambodia's mobile subscriber forecast has been upgraded following new data. We expect about 30mn subscribers by 2016, although the actual number would be lower in light of inactive subscriptions and multiple SIM ownership.

• We expect muted growth in both Cambodia and Laos' fixed-line market due to the substitution threat from mobile services. We forecast their fixed-line penetrations to reach 5.1% and 2.6% in 2016 respectively.

• Adoption of fixed broadband services is forecast to remain slow in light of a lack of network coverage and high cost barriers. By 2016, the fixed broadband penetration rates are expected to reach 0.9% and 4.5% in Cambodia and Laos respectively.

Key Trends & Developments

After more than one and a half years since the Ministry of Posts and Telecommunications of Cambodia announced in February 2011 that it was looking at the formation of a regulator, the ministry finally announced in September 2012 the establishment of the Telecommunication Regulator of Cambodia. In August 2012, Lao Telecommunications entered into a partnership deal with Thailand's state-owned telecoms operator CAT Telecom, reports the Lao News Agency. The deal is designed to offer international leased line services through multiprotocol label switching (MPLS). The networks of the firms are linked along common borders between the two countries, thereby offering services to link sites of business clients to branches and trade partners overseas through MPLS. Cambodia (Telecoms Rating score of 42.4) and Laos (41.4) were ranked 15th and 17th respectively in BMI's Asia Pacific Telecoms Risk/Reward Ratings. SWOT Analysis

Cambodia And Laos Mobile SWOT

Strengths • Mobile subscriber base in Cambodia and Laos continues to grow, with primarily new prepaid subscribers driving the growth.

• Both markets benefit from a healthy degree of competition. • Mobile markets play host to a large number of major international telecoms operators

including Thailand's Thaicom, Vietnam's Viettel, Malaysia's Axiata and Russia's VimpelCom.

• Demand for mobile value-added services is strong and expected to grow, a factor that bodes well for future 3G growth.

Weaknesses • The Cambodian and Laotian mobile sectors are dominated by prepaid users, which provide much lower levels of ARPU for the operators.

• Mobile penetration in rural areas remains patchy. • Cambodia's government has shown a willingness to intervene in the mobile sector, as

evidenced by the decision to shut down SMS services ahead of the 2007 elections. • Enforcement of regulatory policies remains a problem.

Opportunities • Inflated subscriber figures suggest that the markets still possess growth opportunities. • Much scope for investing in the development of next generation network technologies

and 3G services. • As the mobile data services sector develops in Cambodia and Laos, this will create

considerable opportunities for content providers. • Foreign investors continue to eye Cambodia as a potential investment destination

despite the overcrowded market.

Threats • Too much competition in Cambodia's mobile market could lead to price wars and, subsequently, heavily congested traffic, which in turn could result in deterioration of service quality.

• Threats abound for established mobile network operators with Cambodia and Laos having recently seen the arrival of new operators to their mobile markets.

• Slowdown in Cambodia's economy is affecting the income of middle- and lower income consumers.

Cambodia And Laos Wireline SWOT

Strengths • There is a strong recognition by the Cambodian and Laotian authorities of the need to develop fixed communications infrastructures.

• The Cambodian and Laotian wireline markets have provided investment opportunities for several major foreign investors including Vietnam's Viettel (in Cambodia and Laos) and Thailand's Thaicom (in Cambodia and Laos).

• Healthy competition exists in Cambodia's broadband sector, where a large number of service providers have emerged offering internet access via a range of technologies.

Weaknesses • The market for fixed telephone lines in both countries is starting to exhibit weak growth.

• Fixed-line market is dominated by state-controlled operators, Telecom Cambodia, Lao Telecommunications (in which the Laos government has a 51% stake) and Enterprise of Telecommunications Lao (ETL).

• Despite recent investments in alternative infrastructures - including WiMAX, broadband growth continues to be dependent on DSL.

• Extremely low fixed-line penetration rates limit the scope for DSL broadband growth. Opportunities • The privatisation of Telecom Cambodia, and the further privatisation of Lao

Telecommunications, could help to bring about increased investment revenues and the arrival of new skills.

• Internet penetration rates are extremely low, designating internet services as a market with major growth potential.

• Significant opportunities exist to develop a wide range of alternative broadband technologies, including WiMAX and fibre.

• Millicom Lao launched WiMAX services in 2008; the operator's new parent company, VimpelCom, is expected to extend its WiMAX network to a larger part of Laos' territory.

• The completion of a new high speed fibre optic cable connecting Cambodia to China's Yunnan Province should help to improve the quality of internet and telecoms services, and help to cut-prices, increasing the country's business competitiveness.

Threats • Fixed-line sector may enter a period of decline, with potentially negative consequences for ADSL growth.

• As the market for mobile data services grows, this could have potentially negative consequences for the growth of fixed broadband services.

• Demographic challenges to the growth of internet and broadband services, including low literacy levels and low GDP per capita, will take a long time to overcome.

• Errors made by the government in the allocation of wireless spectrum for the use of WiMAX could see one or two operators being removed from the market.