Tough business competition derails ETL's listing plan
Tough business competition derails ETL's listing plan
Lao cell phone operator ETL remains unable to set a date for listing on the Lao Securities Exchange since postponing its IPO last year, according to its top official.
“We cannot list on the market now due to prevailing market conditions,” Managing Director of the state-owned enterprise, Mr Khammuan Xomsiphanya, told Vientiane Times yesterday.
He made the comment following a report that CAT, a Thai state-owned telecom operator, had indicated its intention to invest in Laos as part of plans to expand its business into Laos and Asean before the Asean Economic Community comes into being in 2015 .
Mr Khammuan said the telecom business in Laos had been experiencing strong competition. This was posing a major challenge for ETL in its plan to sell 30 percent of the government's share in the enterprise to public investors and list on the Lao stock market.
“I cannot say when ETL will be listed on the stock market,” Mr Khammuan said, adding that Laos has too many telecom operators for the small population of 6.4 million people.
He said government officials discussed the possibility of a merger of ETL and Lao Telecom, in which the Lao governments hold a 51 percent share with an overseas investor. This would create better conditions for telecom operators to compete in the market.
“I cannot give an answer about whether these two companies will merge as reported, because it is up to the government,” Mr Khammuan said. However, he admitted that officials were discussing the merger as one of the options for listing on the stock market.
Lao Telecom Deputy Director Mr Phoukhong Chithoublok said yesterday he knew of the discussions about the merger so that listing could ahead. However, he did not think any conclusion would soon be forthcoming.
“The government has not made it clear whether the two companies should merge so we have no plan to list on the stock market.”
Mr Phoukhong said Lao Telecom would be ready to implement government policy on business operations as it is the major shareholder.
The Ministry of Post and Telecommunications earlier this year hosted a meeting for telecom operators in Laos to discuss and set a minimum price for cell phone call rates as part of efforts to help the companies make a profit amid growing competition.
Observers say the intervention of the authorities aims to create opportunities for telecom operators to list on the stock market.
However, telecom companies have had trouble enforcing the price agreement as the policy restricts their ability to fulfil their marketing policy and strategies.
vientiane times
