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Logo of Phnom Penh Post newspaper Phnom Penh Post - Gov’t gives telecom firms time to digest new draft law

Gov’t gives telecom firms time to digest new draft law

The ministry of Posts and Telecommunications (MPTC) has postponed a two-day meeting with telecom firms to discuss a controversial draft law leaked to the Post last week, which details the government’s plan to assert control over the industry.

A representative from one telecommunications provider who wished to remain anonymous said the meeting, initially slated to take place yesterday and today, had been pushed back more than two weeks and is now expected to take place on August 14 and 15.

“We received notice of the postponed meeting to allow telecom firms more time to digest the draft law,” the representative said.

Deputy director general of the MPTC, Tol Gnac yesterday confirmed that the two-day consultative meeting had been delayed.

“My colleagues have told me that the meeting has been rescheduled,” Gnak said.

Gnak on Sunday returned from one-week trip to Australia where he said he met with the UN’s International Telecommunications Union (ITU) and Australian telecommunications authorities to discuss regulatory practice and security.

“They wanted to share telecommunications industry best practice with us and discuss the new challenges arising out of new technology and customer products,” he said about the weeklong trip, declining to discuss any details of the MPTC’s new draft law.

The 31-page confidential draft document, which was emailed to telecommunications firms last Wednesday, illustrates the government’s plan to re-balance the industry by scrapping existing licenses and issuing new ones.

The draft law states that the government can seize telecom company systems to maintain “the effective security, national stability and public order”, and also bans private companies from operating both retail and telecom infrastructure services in an effort to segregate and potentially nationalize the industry.

“Infrastructure and telecom network and other infrastructure that supports the telecom sector, need to be under the control of the Ministry of Posts and Telecommunications as according to the permanent regulation,” it states.

But separating infrastructure providers (cables, poles and antennas) from service providers (mobile phone and mobile internet data plans) either voluntarily or through legislation is not a new idea, according to Roy Vivek, a telecommunications analyst with global research firm, Ovum.

“There are cases where we have seen structural separation of operators in markets with ongoing problems of a competitive downstream retail market,” Vivek said, citing the example of Telecom New Zealand, a previously state-owned enterprise, which in 2011 separated its wholesale infrastructure business from its retail business.

“Network separation in telecom sector has been a taboo since there is a large degree of vertical coordination between services along the supply chain. There are clear cost synergies to be realised if services are provided to end user by a vertically integrated operator.”

But while the Cambodian government’s plan might help to stabilise the Kingdom’s hyper-competitive industry, which sees a constant undercutting of service pricing and smaller firms forced to lease infrastructure from rivals, a regulatory approach might not be the answer, Vivek said.

“I think infrastructure separation is an extreme regulatory step that may help to ensure fair competition where it affords greater freedom of choice for consumers in a market otherwise dominated by one operator. But, simply because a possible remedy is available does not mean it should always be applied,” he said.

“Structural separation should only be used when other regulatory options have first proved inadequate, and after a comprehensive cost/benefit analysis has been conducted. Structural separation may have profound effects on investment, valuation, and systemic operations, and would be an extremely difficult policy to reverse.”



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