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Logo of Phnom Penh Post newspaper Phnom Penh Post - Phone revenue to rise: Govt

Phone revenue to rise: Govt

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090317_15.jpg

State revenues from telecommunications are expected to hit $30m this year, government says, but opposition questions method of collection

BLOOMBERG

A mobile phone shop in Phnom Penh. Phone revenues are expected to climb on the back of increased coverage.

GOVERNMENT revenues from the telecommunications sector are set to increase in 2009 on the back of expanding domestic demand for mobile phone services, Minister of Posts and Telecommunications So Khun said Sunday.

"We expect around $30 million in revenue this year as the number of phone companies and users in Cambodia are increasing year on year," he told the Post, adding that revenues stood at around $28 million in 2008. "Currently there are about 4 million mobile phone users in Cambodia."

The government earns revenue from phone operators by charging them an annual fee to use various frequencies within the country. So Khun said the ministry had so far licensed 11 telecom operators, eight of which are in full operation with three more still preparing to enter the market.

"I think that revenue from the telecommunications sector may increase in the coming years, but it is unlikely to exceed $30 million, as there are no more available frequencies," he said.

Cheam Yeap, a lawmaker for the ruling Cambodian People's Party, said that he hoped to see an increase in telecommunications revenue but warned that the current financial crisis could have unpredictable effects on the industry.

"I believe that telecoms revenues will increase if there is strong confidence in the sector, but it will otherwise be hard to estimate the upcoming growth."

Opposition concerns

But Sam Rainsy Party lawmaker Son Chhay was sceptical of any talk of an increase, saying the government granted mobile licences to companies in a disorderly manner that cost the country millions in lost revenue each year.

Telecoms revenues will increase if there is strong confidence in the sector.

"I believe that the ministry should be able to collect revenue of at least $150 million per year from this sector because in 1995, when phones were used in smaller numbers than they are now, they were receiving an income of $47 million," he said Monday.

Son Chhay added that the government did not have a central system to monitor the volume of mobile calls made in Cambodia and that yearly operation taxes were calculated on the basis of the operators' own figures.

"The companies pay in accordance with the information they provide, which results in a loss of income for the government," he said.

He added that the government would face a serious shortfall in revenues for 2009, having increased its total expenditure by 28 percent on last year, from $1.37 billion to $1.75 billion.

Keat Chhon, minister of economy and finance, said early this year that the government depended on income it received from tax collection to respond to the necessary budget increase. However, Pen Simorn, general director of the Custom and Tax Levy Headquarters, has announced in an annual conference recently that income from tax in January and February 2009 decreased by 30 percent compared with the same period last year.

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