Search

Search form

Logo of Phnom Penh Post newspaper Phnom Penh Post - Beeline books $500m charge after overestimating market

Beeline books $500m charge after overestimating market

Beeline books $500m charge after overestimating market

120315_07

VimpelCom, the Netherlands-based parent company of Cambodian mobile operator Beeline, booked an impairment charge of US$527 million on its operations in Cambodia and Vietnam, according to a 2011 company report.

{jathumbnail}

The impairment, or revaluation of VimpelCom’s assets in the two Southeast Asian countries, highlighted the company’s over-valuation of the markets, which it entered in mid-2009.

Intense competition among Cambodia’s eight active operators, as well as the government’s willingness to continue issuing operating licences, had led to the company’s over-estimation, Tokyo-based Sullivan & Frost analyst Marc Einstein said yesterday.

“They have by far the deepest pockets of any operator in the [Cambodian] market, and they probably thought they could just fight it out. But that’s not the case,” Einstein said.

As of November, Beeline had 630,000 subscribers, an increase of 100,000 since July, according to numbers obtained by the Post.

The operator had lost subscribers between March and July of last year, the Post reported.

Given the operator’s backing, Beeline might remain in the Cambodian market for now, Einstein said.

“They’re probably not in a rush to leave, but they have operations all over the world that they could be paying attention to,” he said.

Beeline, along with Mfone, qb and Excell, were the Kingdom’s four smallest operators with 1.45 million subscribers among them in November, according to numbers obtained by the Post.

Excell subscribers have remained flat since early last year at 40,000, and qb added 10,000 customers between July and November with 90,000, the numbers showed.

Metfone, Cellcard, Hello Axiata and Smart Mobile account for more than 90 per cent of the Cambodian market by subscriber numbers with about 13.5 million subscribers, although analysts have said the numbers are inflated.

Insiders said the market should see substantial merger and acquisition activity in 2012.

Beeline general manager Gael Campan declined to comment.

RECOMMENDED STORIES

  • Breaking: PM says prominent human rights NGO ‘must close’

    Prime Minister Hun Sen has instructed the Interior Ministry to investigate the Cambodian Center for Human Rights (CCHR) and potentially close it “because they follow foreigners”, appearing to link the rights group to the opposition Cambodia National Rescue Party's purported “revolution”. The CNRP - the

  • Rainsy and Sokha ‘would already be dead’: PM

    Prime Minister Hun Sen on Sunday appeared to suggest he would have assassinated opposition leaders Sam Rainsy and Kem Sokha had he known they were promising to “organise a new government” in the aftermath of the disputed 2013 national elections. In a clip from his speech

  • Massive ceremony at Angkor Wat will show ‘Cambodia not in anarchy’: PM

    Government officials, thousands of monks and Prime Minister Hun Sen himself will hold a massive prayer ceremony at Angkor Wat in early December to highlight the Kingdom’s continuing “peace, independence and political stability”, a spectacle observers said was designed to disguise the deterioration of

  • PM tells workers CNRP is to blame for any sanctions

    In a speech to workers yesterday, Prime Minister Hun Sen pinned the blame for any damage inflicted on Cambodia’s garment industry by potential economic sanctions squarely on the opposition party. “You must remember clearly that if the purchase orders are reduced, it is all