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Mobile merger plans

DIGITAL Star Media is in talks to acquire mobile operator Excell for an undisclosed amount, a move which is expected to bring some long-awaited consolidation to the Kingdom’s overcrowded telecommunications sector by month’s end.

Digital Star, which operates under its Emaxx brand and has announced plans to operate a fourth-generation mobile service by next year, aims to acquire Excell, the smallest of Cambodia’s eight mobile operators and the only one to employ CDMA2000 technology, company officials said yesterday.

Ministry of Posts and Telecommunications statistics show more than 99 percent of domestic mobile subscribers use GSM technology, but Digital Star Chief Operating Officer Frank May said CDMA allows for a faster transition to 4G, among other advantages, which will be crucial as data services grow in popularity.

“Data is growing exponentially,” he said. “So it is a good acquisition from our point of view.”

Digital Star is conducting due diligence, and “the final acquisition will be completed by the end of the month”, he added. He declined to specify the price of the deal, citing a non-disclosure agreement.

May said Digital Star will obtain Excell’s 28 cellphone towers and will continue expanding the network and its capabilities going forward. Partly through tower-sharing agreements, Digital Star aims for a presence in all 24 provinces by mid-2012, he said.

He touted what he saw as the numerous advantages of CDMA, including a longer signal reach than GSM. May said CMDA, which is used in bellwether markets like the US and China, is more cost effective when upgrading to or expanding 4G service as well.

May cited the development of Cambodia’s telecom industry as integral to attracting much-needed foreign investment to the country. Digital Star’s efforts to grow the Kingdom’s 4G capability were aiding that pursuit, he said.

“Things are on the move and changing in Cambodia. And they’re changing for the better.”

Others in the industry said they doubted May’s claims about the viability of CDMA2000, though.

Hello Chief Executive Officer Simon Perkins hailed the planned acquisition as a good thing for the crowded mobile sector, but questioned whether CDMA would gain traction in Cambodia.

CMDA technology does not use SIM cards, and Cambodian mobile users are well known to hold multiple SIMs at any given time, he said, adding there were fewer CDMA handsets available given the global predominance of GSM.

CDMA “just doesn’t have the scale to make sense for use from a consumer point of view”, Perkins said.

Still, he said CMDA could offer a viable strategy for a company focused largely on data services. Regardless, the adoption of 4G technology was still some ways off, and present 3G speeds were more than adequate for domestic consumers, he said.

“I’m not going to lose any sleep about having to build 4G networks for another five to 10 years,” he said.

Another rival, qb CEO Alan Sinfield, claimed GSM was a much more versatile technology, adding that in the battle between CDMA2000 and GSM for market supremacy, GSM had come out on top.

Therefore, it made little sense to him to buy a CDMA company, even if to expand a network.

“Let’s not even debate it. Game over. CDMA lost,” he said.

However, May claimed his strategy was competitive and that Digital Star would outlast many peers as consolidation in Cambodia’s mobile market plays out. “Whoever’s left standing, we will be one of them,” he said.

Excell Chief Executive Officer Biloliddin Salakhiddin uulu declined to comment yesterday.

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