Search form

Login - Register | FOLLOW US ON

Logo of Phnom Penh Post newspaper Phnom Penh Post - Mobile phone revenues per user to decline

Mobile phone revenues per user to decline

Revenues per user in Cambodia’s mobile phone sector will drop sharply over the next five years, according to global research and consultancy firm Frost & Sullivan.

The company said the average revenue per user – ARPU, a key metric for the industry – would fall to US$3.68 in 2016 from $5.14 last year, as more and more lower-income Cambodians adopted the technology and  increased competit-ion drove down revenues.

“The indication is that things will get worse,” Marc Einstein, Frost & Sullivan’s industry manager for information and communications technologies in the Asia-Pacific, said.

“Profitability growth declines over time in this industry.”

Einstein said the trend could be one catalyst for consolidat-ion in the sector, as less-profitable firms sought to merge with stronger competitors.  

He noted that Frost & Sullivan’s figures were based on average revenue per SIM card, and not per person.

As many Cambodians use more than one SIM card, Einstein estimated the true ARPU figure might be 1.25 to 1.5 times higher than his listed projections.

Mobitel chief executive David Spriggs said ARPUs tended to decline as a company’s customer base grew, although this was usually offset by the overall growth of the market.

Spriggs agreed with Einstein, however, that intense pricing competition in the sector, as well as the specific demographic of new customers coming on line, had been the catalysts for ARPU declines in many markets. “It’s normal in markets where the penetrat-ion is driven by reaching out to lower-income customers that the average will go down,” he said.

Companies could be forced to consolidate, cut their costs or stabilise their pricing strategies in order to remain profitable in an environment with declining ARPUs, Spriggs said.

Hello Axiata marketing director Rozy Laxana agreed that average revenues per user would decline.

“Promotion-driven campaigns to attract new acquisit-ions and increase market share in a highly competitive marketplace will result in ARPUs declining further, fuelling the multi-SIM phenomenon to an even greater extent,” Laxana said.

She predicted Cambodia’s mobile operators would face higher churn rates and an increased cost of acquiring customers, leading to lower ARPUs across the board.

As a result, operators might find it more difficult to invest in new products and services, which could affect Cambod-ian consumers as a whole, she said.

Laxana said she expected local operators would look to the mobile-data area for new revenue streams.

Richer content and an increasingly tech-savvy consumer base had served to fuel growth in that part of the business, she said.

“This trend is also beginning to gain traction in Cambodia. At Hello, we have seen a tremendous uptake in our mobile data and BlackBerry services during the past year,” Laxana  said.

0

Comments

Please, login or register to post a comment

Latest Video

Turkish Embassy calls for closure of Zaman schools

With an attempted coup against the government of President Recep Erdogan quashed only days ago and more than 7,000 alleged conspirators now under arrest, the Turkish ambassador to Cambodia yesterday pressed the govern

CNRP lawmakers beaten

Two opposition lawmakers, Nhay Chamroeun and Kong Sakphea were beaten unconscious during protests in Phnom Penh, as over a thousand protesters descended upon the National Assembly.

Student authors discuss "The Cambodian Economy"

Student authors discuss "The Cambodian Economy"

Students at Phnom Penh's Liger Learning Center have written and published a new book, "The Cambodian Economy".