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Price rules pulled due to election

The government in May held back on implementing widely unpopular rules that would have raised the price of mobile phone calls so as to not upset consumers – and potential voters – just months ahead of the national election, according to Cambodia’s independent telecommunications regulator.

“Before the election this happened, but the government and the minister of telecoms said you have to delay this because it’s just before the election. You cannot put this floor price and regulation to the operator,” Lay Mariveau, first member of the Telecommunication Regulator of Cambodia (TRC), said yesterday.

The floor price was introduced in 2009 to prevent the demise of telco operators in what is considered an oversaturated market. It sets a minimum charge of 4.5 cents per minute for calls made within a network and 5.95 cents per minute for calls made between different networks. But it was often flouted by operators, who charged much lower and sometimes zero rates through enticing promotions.

The TRC tried to reimpose the rules in April in an agreement signed by all but one operator – Smart mobile – to abide by the laws governing the market intervention. But after an outcry from consumers, the Ministry of Posts and Telecommunications ordered the telecom regulator to withdraw it just weeks later, citing the need to consult with operators to see if the rules were appropriate.

It was that outcry, so close to the election, that caused the withdrawal, according to Mariveau.

In retrospect, it’s easy to see why such a move made sense. According to government statistics, there were 19 million mobile phone subscribers in 2012 (with a population of close to 14.6 million, many users have more than one mobile phone). Though the numbers aren’t broken down by age, many of those subscribers were likely eligible to vote.

Neither the former minister of posts and telecommunications, So Khun, or the new minister, Prak Sokhon, could be reached for comment to confirm the alleged logic behind the withdrawal.

This week, more than four months after the July 28 poll, which the ruling Cambodian People’s Party won by a slim margin in the face of widespread allegations of voter fraud, the floor price was reinstated – unchanged from the attempt in April.

Political analyst Kem Ley critiqued the timing of delaying the imposition of price rules, saying that the government needs to change “from the benefit of the government to the benefit of the consumer”.

Opposition Cambodia National Rescue Party whip Son Chhay was more incensed.

“If you are serious about the country and you are the government you don’t produce that policy and then delay it for the purpose of gaining support, for the benefit of the election,” said Chhay, whose party is still boycotting parliament over poll results.

Chhay added that the government’s claim that reinstating the rules would generate more revenue through taxes was false, as the mechanisms to set up collection were not yet in place.

Like Chhay, Cambodian Economic Association president Srey Chanty was “confused” by the claimed economic benefits of the latest intervention this week.

“It’s a free-market economy, we are promoting that and then the government says you have to fix this price and the consumer is the loser,” he said.

Larger operators Mobitel and Smart could not be reached for comment yesterday.

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