PHONE operator Smart Mobile has left its tariffs unchanged despite a government edict setting minimum prices in the sector, saying it has “severe concerns and reservations” over the new pricing regulations.

Smart Mobile Chief Executive Officer Thomas Hundt also said the time frame for compliance with the government prakas, which was signed December 7 and took effect December 22, was unreasonable.

“Smart Mobile is currently conducting discussions with [the Ministry of Posts and Telecommunications] in regard to the prakas; however, Smart Mobile’s WOW offer remains valid unchanged until further notice,” he said.

“Besides Smart Mobile’s general severe concerns and reservations in regard to this regulation, a potential revision of Smart Mobile’s tariff plan does require significantly more time than granted with the prakas.”

His comments followed a Post article last Thursday that mistakenly said the company had dropped its free minutes offering from its WOW Tariff, which gives customers up to 30 minutes of free calls a day within the Smart Mobile network when they top up with $5 or more of credit.

Those who top up with less also get free minutes, but not as many.

That article came after Smart Mobile dropped reference to the free minutes from the pricing schedule published on its Web site. “From now on, you can enjoy great calling rates within the network and across network calls are charged at only 2 cents per 15 seconds,” the Web site now states.

Mao Chakrya, director general at the telecoms ministry, said last week that operators which fail to comply with the edict by the deadline risk the suspension or cancellation of their operating licences.

Into line
Most of the Kingdom’s nine operators were already in line with the minimum tariffs or have since altered their pricing structures.

Only Smart Mobile, qb, which is owned by CADCOMMS, and Beeline appear to have pricing structures at odds with the new directive, which bans free minutes and sets minimum tariffs of $0.045 per minute, not including taxes, for calls within a network.

It also makes binding a long-standing agreement setting the cost for across-network calls at $0.0595 per minute.

Special call promotions of up to one month are possible in which within-network calls can drop to 50 percent of the minimum tariff, but these require prior approval. source: the phnom penh post

A telecom price war that saw rates for callers plummet amid steep competition will cease, thanks to a government-directed floor that analysts say runs counter to the ideas of a free market.

An influx of companies into the country’s nascent phone market produced deep reductions in per-minute charges in recent years, with some rates offered as zero within networks.

The new policy now will not allow competitors to charge below $0.045 per minute within a network, nor $0.0595 for cross-network calls.

A government official said the price floor was the only way to stop an escalating problem, one that had already led to a dispute between the market leader, Mobitel, and a new competitor, the Russian operation Beeline. The price floor came after a series of directives failed to stop the competitive pricing.

Economic analysts said the new order will discourage investment and take away price benefits for consumers.

“To set a price is contrary to the free market, and makes consumers who used a lower price to lose benefit,” said Chan Sophal, president of the Economists Association of Cambodia.

Cambodia’s 1993 constitution says it will abide by a free market system, where buyers and sellers set prices.

The government should only intervene in pricing where people’s livings are concerned, Chan Sophal said.

The price measure could also contradict Cambodia’s investment law, which states that the government will not set prices on products or services for licensed companies, analysts said.

“Price intervention by the state is clearly contrary to the investment law,” said Ly Tay Seng, CEO of the HBS law firm and consultancy. “It will not only impact current investors, but also discourage investors who want to invest in the country.”

Telecommunications Minister So Khun rejected the criticisms, saying the state had a right to “stand as an arbitrator.”

“It is not about intervention, but to be as an arbitrator, to not let companies compete by killing each other,” he said. “They can compete on quality and coverage area.”

The new policy could not be frozen, he said, but the price might be adjusted following requests by operators. The ministry will meet with operators individually in coming months to find a better solution, he said.

Lim Sovanara, an economist for UNDP, said the time was not yet right for set prices. A price floor will benefit larger, established companies, keeping smaller one less competitive.

“If you want to mitigate the adverse impact on a certain segment of society, it is usually not the best to act on the price like this,” said Eric Sidgwick, a senior economist for the ADB. “Maybe you leave the price to go where it needs to go in the market, and you find an alternative mechanism to compensate those who are affected.”

Cambodia has more the 4 million phone users, amid a population of 14 million, a potentially lucrative tax base for the government, with much potential for expansion.

Senior officials at various smaller phone companies declined to comment, but staff members say they are preparing to set a new price in January. source: VOA news

ASENIOR telecoms official warned Monday that the government would begin enforcing a new pricing prakas, or edict, from today, and mobile providers remained tight-lipped about tariff changes.

Call-centre operators spoken to by the Post said changes were imminent, but that they had not yet been notified by managers.

The need for a pricing and marketing revamp throughout the sector follows a government inter-ministerial prakas announced on December 10 that gave operators 15 days from the date it was signed by Minister of Posts and Telecommunications So Khun and Minister of Economy and Finance Keat Chhun, December 7.

Mao Chakrya, director general at the Telecoms Ministry, confirmed the deadline and said the ministry would begin investigating operators for compliance this week.

“They need to comply from Tuesday, and we will be looking closely at what they do,” he said Monday.

The new edict bars operators from offering calls within their networks below US$0.045 per minute, not including taxes. It also made binding a long-standing agreement setting the cost for across-network calls at $0.0595 per minute.

Special call promotions of up to one month are possible in which within-network calls can drop to 50 percent of the minimum tariff, but these require prior approval.

Companies change tariffs
Mobile-phone operator Star-Cell appeared to be treating the deadline seriously, terminating registration today for a special mobile-phone tariff offering $0.01 per minute for calls to other Star-Cell customers and $0.07 per minute across networks.

The promotion was due to run until December 31, though the operator said customers who had already registered would continue to receive the discounted calls.

The operator, which is owned by Applifone Co, has set its within-network tariffs at $0.05 per minute and across-network tariffs at $0.10 per minute, above the government’s new minimum tariff. However, off-peak calls between midnight and 7am are set at $0.025 and $0.08 within and across networks, respectively.

Star-Cell Marketing Director Chong Harth referred questions to Chief Executive Centre Tolga Gedikoglu, but he did not reply for a request for comment.

Mobitel has announced on its Web site a new tariff schedule from today, with calls within the network charged at $0.05 per minute and across network at $0.10.

The situation at qb is potentially more complex, with 300 minutes of within-network calls bundled in a $3 monthly package including voice, SMS and MMS, which works out at just $0.01 per minute for the voice calls alone.

Across-network tariffs are set at $0.10 per minute, and within-network calls over the monthly limit at $0.02 per minute.

A network centre operator said Monday that he had not been informed of any plan to change the tariff.

Farouq Abu Saleh, the chief operating officer at CADCOMMS, which operates the qb network, did not reply to an emailed request for information on the company’s pricing plans, and Director Ben Khudair could not be reached Monday.

Metfone, operated by Viettel, a subsidiary of the Vietnamese military, has two prepaid packages, both set above the minimum tariff.

Mfone is also in line with the new edict, aside from its off-peak calls between midnight and 7am, which are charged at just $0.024 per minute.
Excel charges $0.03 and $0.07 per minute for within- and across-network calls, respectively.

An Excel call-centre operator said Monday that prices were scheduled to change in the New Year, but added she did not have details at this stage.
A call-centre operator at Beeline said the company’s Super Zero tariff, which charges

users only for one minute for the first 15 of any call within the Beeline network, would finish at the end of the year to be replaced by new tariff packages.

However, he said the call centre had not yet been given details. Beeline no longer advertises the package on its Web site.

Beeline General Director Gael Campan said last week he was preparing a response and would release details at a later date. He could not be reached for comment Monday.

Thomas Hundt, chief executive officer at Smart Mobile, which allows users to make free calls for up to 30 minutes each day for those who top up with $5 or more of credit, said the company was not yet ready to release a statement.

A Smart Mobile call-centre operator spoken to by the Post said she had not heard of any impending changes. source: the phnom penh post

VIMPELCOM, owner of mobile operator Beeline, has extended phone coverage to two-thirds of people in Cambodia ahead of schedule, Gael Campan, general director of the company’s operations in the Kingdom, said Thursday.

“In May we made a commitment to cover 66 percent of the country’s population by the end of the year,” he said, adding that the company had passed that benchmark in mid-December, earlier than it had planned.

The Moscow-based firm has established a network of 429 mobile phone towers in 18 provinces, designed to handle “more than 1 million calls per hour”, said Campan, adding that the company intends to have some degree of mobile coverage in all provinces in the Kingdom by the second quarter of 2010.

Speaking Thursday at what he called “the core”, the centre of the firm’s technological operations in Cambodia, located near Takhmao in Kandal province, Campan declined to discuss the cost of these infrastructure investments, saying it would give competitors an unfair advantage.

Vimpelcom, the latest entrant to the Cambodian mobile market, has pursued rapid development for its Beeline brand in Southeast Asia, launching in May in the Kingdom and July in Vietnam.

In September the firm announced it had agreed to acquire Millicom SA’s 78 percent stake in Millicom Laos Co for about US$66 million, the latest addition to what it calls its “Southeast Asian cluster”.

Beeline is currently facing a lawsuit filed by competitor Mobitel with the Phnom Penh Municipal Court in August.

Viettel’s managing director, Nguyen Duy Tho, told the Post this week that the company has 2,400 base transceiver stations active and plans to have 3,000 in operation by the end of 2009 – one in every commune. source: the phnom penh post

As mobile-phone providers expand coverage into the farthest reaches of the Kingdom, experts and supporters of the technology are anticipating it will unlock productivity and economic growth across the country.

“People are using mobile phones to share information with customers and suppliers in a way that just hasn’t been possible before,” said John Brinsden, Acleda Bank vice chairman. “Disseminating information by phone helps people get better prices based on supply and demand,” he said.

Yang Sang Koma, the director of the Cambodian Centre for Study and Development in Agriculture (CEDAC), said the benefits were particularly obvious in rural areas.

“Mobile phones help people solve problems,” he said. “Certainly phones can be expensive, but farmers use them to gain knowledge about prices and markets, making back more money than they spend on their phones.”

For every 10 percent increase in mobile teledensity, a measure of the number of phones per 100 people in a given area, there is a 0.7 percent growth in economic output in the area, according to Hamadoun Toure, secretary general of the International Telecommunication Union (ITU).

Although no studies have been done in Cambodia, as the Kingdom’s nine mobile-phone operators establish base transceiver stations across the country, they are driving mobile-phone demand in the most remote places.

Brinsden said he follows advancements in rural coverage closely as the bank prepares to launch mobile-banking services next year, potentially bringing more customers within reach of his bank.

New users are also saying that mobile phones have improved their financial well-being.

Duch Sokhom, the commune chief on Koh Rong Island, an hour’s boat trip from Sihanoukville, said his fishing-oriented village received only intermittent coverage from a base transmitter station (BTS) on another island, but that people were clamoring for phones to support their livelihoods.

“Life here is better than in the past,” he said. “No one forced mobile phones on the residents here; it’s just easier to contact other people, and it takes less time to solve problems.”

A fisherman on neighbouring Koh Rong Sanlen island said he almost immediately saw financial benefits through better access to market information after purchasing his first phone four months ago.

“In the past, middlemen met the fishermen at the docks, and I had to take the price they offered,” he said. “Sometimes I had fish, but no one showed up to buy, but now I can contact many people and get the best price for the fish, and also take it directly to them.”

Although his monthly phone bills approach US$15, he reckoned he more than offset the cost through higher profits.

On the same island, shopkeeper Pthan Thu Son also noted an increase in productivity after she went mobile. To stock her merchandise for sale, she used to close shop and travel to Sihanoukville every 10 to 15 days. “Now I call ahead to place my orders, and I can find the best prices,” she said.

“I give my money to a boat operator going to the market, and he comes back with goods for my shop.”

She said she also saves around $25 per trip by being able to search ahead for the best prices.

The greatest benefits from mobile phones tends to accrue to those in competitive sectors, or who had to rely on middlemen to get goods to market. For those enjoying a monopoly in an island-based industry, such as Koh Rong Sanlen’s lone boat builder and repairer Chia Sang, mobile coverage has had limited impact.

“Before, customers would come to me to repair their boats,” he said. “Now they call ahead and still come to me to repair their boats. I have no need for my phone.”

On September 3 this year, mobile-phone operator Metfone switched on a tower on military-controlled Koh Tang island, three hours by boat from Sihanoukville. In a strange twist, Metfone is operated by Viettel, a subsidiary of the Vietnamese military.

Its Cambodian counterparts saw an almost immediate practical benefit from Viettel’s arrival on the island.

“Of course it was difficult to communicate with boats and other headquarters before mobile phones, but it was especially hard for soldiers stationed here to communicate with family,” said military spokesperson Van Dy.

Centred atop the island’s highest point, coverage from the BTS extends some 50 kilometres over the open seas, according to Viettel technician Ouch Touch, who visits once a week for maintenance purposes.

Beyond voice
Those in range of the signal are already looking to move beyond making mobile-phone calls, seeking also to use their phones to access data over the Internet.

“We need the Internet,” said Duch Sokhom. “People don’t know how to use the Internet, but this is a human resources problem. People will learn very fast, like they did with mobile phones.”

Across in Sihanoukville, Viettel team leader Hour David was installing a broadband Internet connection in a restaurant. With packages starting at $20, he said it was still beyond the reach of most people in the region. “So far we sell the Internet mostly to foreigners and businesses like restaurants, although we are beginning to set up access for more university students,” he said.

Sihanoukville local Oaun Narm Koeu, who sells plaster for use in construction, said he had been logging in frequently to keep up to date on border tension with Thailand, where he sourced his materials. “I always check this information on the Internet, but I would be happier if I could get the Internet on my phone,” he said.

ACLEDA’s Brinsden said mobile phones have the potential to leapfrog broadband and fixed-line Internet in rural areas as people have already become accustomed to accessing information through mobile phones.

But providing mobile-phone coverage in remote areas is no easy task, and far from profitable. It cost around $150,000 and took 40 Viettel employees some 35 days to erect a tower on Koh Tang island and switch on the base transceiver station, according to Hoang Anb Tuan, Metfone’s director in Preah Sihanouk province.

With only 100 users on the island, a return on that investment is unlikely to be seen anytime soon. However, Managing Director Nguyen Duy Tho said the decision still made sense from a business as well as a social perspective.

“This is our business philosophy,” he said. “Some towers don’t make money, but technically they improve network quality and coverage.”

The company has 2,400 base transceiver stations currently active and plans to have 3,000 in operation by the end of 2009, one in every commune, he said, representing a significant investment.

The social benefits to users also had almost unlimited brand value, he added, citing the potential for the firm’s coverage off the south coast of Cambodia to save lives. “The tower may not make money, but if a fisherman, for example, is fishing near our tower and a storm hits, he can phone for emergency help,” he said.

“If you were me, would you install such a tower?” Source: the phnome penh post