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Logo of Phnom Penh Post newspaper Phnom Penh Post - Mobile leaders welcome rates edict

Mobile leaders welcome rates edict

091214_08
A Star-Cell worker explains calling plans to a customer in Phnom Penh last week.

New entrants remain tight-lipped on new mimimum tariffs for mobile-phone calls set by the government last week, but biggest players say it will help restart development of networks

It is high time for us to think about quality, coverage area and ... our customers.

Cambodia’s most established mobile-phone providers have welcomed a move by the government to set new minimum tariffs and end a price war that they say has kept the sector from developing.

Newer entrants to the increasingly competitive telecoms market, however, remain tight-lipped about the pricing rules announced Wednesday that set a minimum charge of US$0.045 per minute for calls within an operator’s network and $0.0595 for calls across networks, saying they have yet to evaluate how the regulations will impact their operations.

Simon Perkins, chief executive officer of Hello, one of the top four operators by users and an early entrant to the sector, has long been a supporter of minimum pricing and said that stability in the sector will enable operators to return to investing in network expansion and quality improvements.

Perkins could not be reached for comment, but Hello’s chief financial officer, Phillip Wong, called the prakas, or edict, “an excellent piece of work” at its unveiling last week.

“The prakas is excellent for operators, excellent for the government, which has shown clear leadership, and hopefully, it will be good for the people who will see better quality,” he said.

Metfone Managing Director Nguyen Duy Tho said the Vietnam-backed service provider, which is competing with market leader Mobitel for top spot among the Kingdom’s operators, was unfazed by the new rules.

He said that ending the price war was crucial for the development of the sector, as it will enable operators to focus on network quality and service offerings rather than only pricing.

“Price is an important consideration, but it is not everything,” he said. “Now, it is high time for us to think about quality, coverage area and take care of our customers.”

Neither Smart Mobile Chief Marketing Officer Kirill Mankovsky nor Beeline General Director Gael Campan would comment on the regulations, both saying they had yet to analyse the likely impact.

But both Smart Mobile’s WOW tariff and Beeline’s Boom plan – the latter the target of accusations of price-dumping by Mobitel – appear to be in violation of the new pricing structure.

Smart’s WOW tariff allows users to make free calls for up to 30 minutes each day for those who top up with $5 or more of credit.

Beeline’s Super Zero tariff charges users only for the first minute of any calls they make of up to 15-minute’s duration within the Beeline network.

Calls across networks on the plan are charged at $0.06 per minute, above the new minimum, but the company’s Boom plan allows calls within and across networks to be charged at $0.05 per minute, which Mobitel maintains gives the company an unfair advantage in a bid to erode the market share of more-established service providers. However, Beeline ended the promotion for new users and said most existing users have already switched to the newer Super Zero tariff.

Operators and the government previously had a long-standing agreement that calls across networks would cost $0.0595 per minute, including a $0.0465 per minute charge to the owner of the network and taxes and transfer fees. However, an argument arose over whether that agreement was binding.

Beeline is currently defending itself against legal action by Mobitel, which in addition to the price-dumping claims, is accusing the provider of using Mobitel’s prefixes to disguise calls made across networks.

Mark Hanna, chief financial officer at Royal Group, which owns Mobitel after buying out its joint-venture partner last month, was travelling and could not be reached for comment.

However, the company is understood to be largely in favour of the minimum tariff, with sources in the sector claiming that the Ministry of Posts and Telecommunications’ intervention followed intensive lobbying by Mobitel to help it preserve market share and protect its sizable investment in the telecoms sector.

Sources within Mobitel, Hello and Metfone say new competitors have been unfairly benefiting from the infrastructure investments made by older operators, and have been able to offer cheaper services due to lower maintenance fees and equipment costs.

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