THE owner of Cambodian mobile provider Star-Cell announced yesterday it had written down the firm’s value by more than US$100 million and had “no goodwill” related to its operations in the Kingdom.
In a mobile market that it said was characterised by fierce competition and high churn rates, Star-Cell’s Sweden-based owner, TeliaSonera AB, said it was made clear in the first quarter of 2010 that its “ambition related to the Cambodian market had to be reviewed”.
After reassessing its worth in the most recent quarter, the company announced it had reduced the book value of Star-Cell by 678 million kronor (US$103.4 million).
“After the writedown there is no goodwill related to the Cambodian operations as per September 30, 2010,” it said in a third-quarter statement released yesterday.
Goodwill is generally defined as the value of a firm beyond its tangible assets. This could include factors such as the value of a brand name or the company’s reputation.
After the writedown there is no goodwill related to the Cambodian operations.
Star-Cell launched in Cambodia in October 2007, according to the GSM Association, and was acquired in 2008 by TeliaSonera along with an 80 percent stake in a company called Spice Nepal.
The move marked TeliaSonera’s entry into one of the world’s most crowded markets, which many believe is now ripe for consolidation.
Although nine companies operate in Cambodia, experts have said the market is only large enough to support four or five.
TeliaSonera said yesterday Star-Cell was positioned seventh in the Kingdom’s market as of September 30, with 503,000 subscribers for the third quarter. The report did not detail on what basis subscribers were measured.
This marked a drop in market position when compared to TeliaSonera’s 2009 annual report, which claimed that Star-Cell was Cambodia’s fourth-largest operator.
The report did not provide details of Star-Cell’s future operations or separate financial statements for the company. Cambodia-based officials did not return a request for further comment yesterday.