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Logo of Phnom Penh Post newspaper Phnom Penh Post - Slide continues for mobile providers

Slide continues for mobile providers

THE latest third-quarter results for Cambodia’s struggling mobile phone sector showed the situation for many continues to go from bad to worse.

First TeliaSonera, the parent company of Star-Cell, wrote down more than US$100 million of goodwill on its Cambodia operations. Then at the end of last month Axiata did the same to the tune of $15.7 million for its subsidiary Hello.

Meanwhile Vimpelcom, the operator of Beeline, continued to struggle over the same period, according to financial results. Posting quarterly results that were “below expectations”, Beeline said it was confident that its Cambodian business “will be on track by the end of the year”.

So far this year, however, Beeline has increasingly struggled. Recording just $3.5 average revenue per user in the first quarter, already a staggeringly low rate even for Asia, Beeline’s ARPU was down again to just $3.2. By comparison, in Kyrgyzstan the firm generated $5.6 per user and $4.1 in Uzbekistan, the next lowest performers for Vimpelcom.

This data suggests that Cambodia’s fickle mobile-phone users continue to switch between operators for the best deals, leaving firms here amongst the lowest revenues per user in the world.

As a result, profitability for most companies in the sector remains a distant dream.

More worrying perhaps for Beeline – and certainly more confusing for the market – are the companies user numbers which showed a near-4 percent decline in subscribers, but which contradict official government data.

Beeline reported in its official results that it had some 505,000 users in the third quarter, which represented a decrease on the 525,000 users announced for the second quarter. However, the Ministry of Posts and Telecommunications reported that Beeline had less than half this number of active SIM cards in the second quarter at just 256,542 users. The ministry has not released third-quarter figures.

Just how bad are Beeline’s user numbers? Well, we don’t know. Socheata Nhem, head of public relations at Beeline, declined to discuss the discrepancy yesterday and General Director Gael Campan was unavailable for comment.

Whatever the real scenario, Beeline was sixth in the mobile market during first quarter, according to government figures, and seventh in the second quarter. It’s another sign Beeline is struggling in Cambodia’s hyper-competitive mobile phone sector. And looking at third-quarter figures released by other firms, it is certainly not alone.

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