Mobile Operators in Cambodia

Mobile operators are keen to invest in Cambodia because they see a lot of potential for growth. With a mobile penetration rate of just 25 per cent, there are still many Cambodians who do not have phones and this provides a unique opportunity.

According to the government, the number of mobile phone users in Cambodia increased by nearly 15 per cent in 2008 reaching 3 million users by year’s end. The government expects to collect around $30 million in revenue in 2009 as a result of expanding domestic demand for mobile phone services. Collected revenue in 2008 was $28 million.

The Ministry of Posts & Telecommunications (MPTC) has granted 11 network licences to date (March 2009), eight of which have commenced operations with three more preparing to enter the market. Those already operating are: Hello GSM (TMIC), Mfone (Camshin), QB (Cadcomms), Star-Cell (Applifone), Excel, CamGSM, Metfone (Viettel), and Smart Mobile (Latelz).

Luxembourg-based Millicom International via its CamGSM unit is Cambodia’s largest mobile phone operator with 55 per cent of the market. Thailand’s Shinawatra operates Camshin which is in second position with a market share of 18 per cent. Telekom Malaysia International Cambodia (TMIC) is close behind with a 15 per cent share.
TMIC launched its new brand identity ‘Hello’ in November 2007. The company has seen the number of its subscribers almost double during the past 12 months and is now Cambodia’s third largest operator.

To meet the needs of its growing number of subscribers, Hello has announced the launch of the new prefix number 081. Customers using the new prefix will still receive the same benefits as existing customers using the provider’s 015 and 016.

In February 2009, the company launched an unlimited international roaming package. This is Cambodia’s first unlimited roaming package and will cut the cost of going online through a mobile when travelling outside Cambodia. The Daily Unlimited Data Roaming Plan is aimed at the small segment of business and government travellers who travel throughout the region and wish to use the internet overseas.

TMIC is investing $150 million in Cambodia to upgrade network capacity and add 500 new Base Transceiver Stations (BTS) for coverage in rural and provincial sites.

New operators
Smart Mobile became service provider number eight in March 2009. Smart Mobile has a Russian parent company, Latelz, which is 100 per cent owned by Timeturns Holdings ? a Cyprus based company created by shareholders for managing and operating GSM/UMTS operators around the world. With Cambodia’s telecommunications sector growing so quickly, Smart Mobile is confident it can capture a significant share of the market and is investing heavily in infrastructure. “Smart Mobile is very excited to offer its services to mobile users in Cambodia,’ said the company’s CEO, Mr. Thomas Hundt. ‘We intend to be highly competitive with our pricing, service packages and promotions, and will also bring a fresh modern approach to customer service - one that focuses on living what we call the Smart life.

“Smart Mobile has designed a new high-tech, community-minded Smart Store in the heart of Phnom Penh that is open to anyone,” adds Mr. Rattana Um, Smart Mobile’s Corporate Counsel and Spokesperson. “It’s the Smart Mobile goal to make quality mobile technology accessible to customers across Cambodia and make the Smart life available to everybody.” At the cutting edge Smart Store on Monivong Blvd, Phnom Penh, consumers will be able to learn about Cambodia’s newest mobile service provider and its offering, to subscribe to Smart Mobile, to add services out of Smart Mobile’s service portfolio and to receive support. Inside are free internet and gaming kiosks and a large video screen set up for multi-media presentations- including seminars on ‘Smart living’ or game contests. There is also a stage designed to feature local artists, and a T&C coffee shop where customers can relax and take it all in. Gracing one wall of the store is a tribute to local Cambodian art and design and a ‘green’ booth is set up to focus on local organisations that are pitching in to help the environment and the community.

A ninth company may join the ranks in 2009. Sotelco, the Cambodian subsidiary of Russia’s VimpelCom has signed a contract to build a GSM network in Cambodia with China’s Huawei Technologies. As part of this new framework agreement, Huawei will deploy a nationwide GSM mobile phone network for Sotelco over the next five years. “Companies of VimpelCom Group are always committed to delivering their customers the broadest choice of superior mobile products and services, the best coverage and unparalleled customer service,” said Gael Campan, General Manager of Sotelco. “Sotelco selected Huawei for this key rollout project because of its expertise and proven track record in delivering quality mobile phone networks. Huawei’s technological expertise will help us deliver an excellent mobile experience to our customers.” VimpelCom has pledged around $200 million to be spent on its Cambodian network in the first three to four years following its commercial launch.

Viettel ? Vietnam’s Ministry of Defence-run telecoms unit ? officially launched its Metfone service in Cambodia in February 2009. The company immediately gained more than 500,000 subscribers in the Kingdom by distributing free SIM cards, and is launching a major drive to tap Cambodia’s rural market and bring schools online. At the opening ceremony, Viettel’s General Director, Hoang Anh Xuan presented H.E. Im Sethy, Cambodia’s Minister of Education, Youth and Sports, with $5 million to help the country to install free broadband internet transmission lines in 1,000 of the country’s schools. The project will be implemented over the next five years. Viettel says it has installed 1,000 transmitter stations countrywide and 5,000 km of fibre optic cable, covering all 24 Cambodian provinces and cities. The company plans to install additional transmitter stations and cable in order to extend its coverage to Cambodia’s islands.

Applifone, known under the brand name Star-Cell, is a private GSM mobile operator in Cambodia. The company was established in 2006 and commercially launched in 2007. In order to increase its coverage to all 24 provinces, Star-Cell recently teamed up with Ericsson to introduce solar-powered base stations to Cambodia. The satellite transmission feature provides affordable mobile-network coverage in remote areas where other transmission solutions are unavailable. Denis Ryabtsev, Chief Marketing Officer at Star-Cell, says: “Ericsson’s solar-powered site with satellite transmission will make a significant difference. It enables us to expand cost-effectively into rural areas, connect people for the first time, and offer affordable services that improve quality of life.” Since its commercial launch, Star-Cell has extended its services to most areas of Cambodia.

Funding to Boost Telephone Services in Rural Cambodia
Poor families in four of the poorer provinces of northern and north-western Cambodia ? Banteay Meanchey, Otdar Meanchey, Preah Vihear, and Pursat ? will benefit from a $2.6 million grant to increase access to telecommunications services signed by the World Bank, acting as administrator for the Global Partnership on Output-Based Aid (GPOBA), and the Royal Government of Cambodia.

Up to 52,000 poor households or 260,000 Cambodians are expected to benefit from the scheme, through improved telecommunications network coverage and the installation of public access points where people will be able to make and receive telephone calls on a regular and reliable basis.

“Ensuring access to telecom services to all people in Cambodia and bridging the digital divide is one of the priorities of this government,” said H.E. Chin Bunsean, Secretary of State of the Ministry of Post and Telecommunications of Cambodia which will oversee implementation of the project. “It’s time that the people in rural areas are able to benefit from the same services, at the same quality and prices that the people in the cities have been enjoying for so many years.”

Despite improvements in telecommunications services and an increase in the number of telecommunications companies, rural access is still a challenge in Cambodia. The National Institute of Statistics estimates that only one in six rural households owns a phone, compared to over 30 per cent of urban households. Rural and remote communes tend to be less commercially attractive to service providers because of higher operating costs and lower average revenues per user.

The GPOBA grant will provide a one-time capital subsidy for the provision of telephone services in locations that would otherwise be considered commercially unviable. Potential service providers will be selected competitively through an open bidding process. They will be free to use any technology, but must provide full network access and service at a quality and price similar to the rest of the network in Cambodia. The winning service provider will be the qualified bidder who offers the required services in the target areas for the lowest subsidy, and will sign a performance - or ‘output’-based contract with the government. In line with the output-based approach, most of the GPOBA subsidy will be paid only after the services have been delivered and verified by an independent agent.

“By making telephone services available to poor households in remote rural villages, the GPOBA project will help to improve access to markets and economic opportunities in some of Cambodia’s poorest provinces,” said Mr. Qimiao Fan, World Bank Country Manager for Cambodia.

The GPOBA project will draw on funds from the Australian Agency for International Development (AusAID) and the Swedish International Development Cooperation Agency (Sida).