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Telecoms ordered to end promotion offers

The government has repeated its call for the country’s telecom operators to end their alleged predatory pricing of mobile consumer plans, giving firms until the end of the month to change the terms of their promotions.

The Ministry of Posts and Telecommunications (MPTC) issued its warning following a meeting last Thursday between the ministry, regulators and representatives of the country’s major telecom operators.

Ministry officials claimed the promotional packages with some offering their customers to exchange up to $2 for $2,000 worth of on-network calls and data went against the principles of fair competition outlined in the Telecommunications Law.

According to the MPTC release, telecom firms have until March 31 to change their pricing, which officials deemed unsustainable and detrimental to the health of the industry.

Anthony Galliano CEO of Cambodian Investment Management, said the deep discounts offered by the competing telecom operators appeared aimed at increasing recurring subscriptions to raises average revenue per user ARPU without a material impact on profitability.

“The game plan appears to be to seduce the subscribers into phenomenal super deals, with a marketing strategy that prompts reoccurring renewals, thus increasing weekly and monthly subscriber ARPU,” he said.

Galliano noted that so far regulators have chosen a mostly hands off approach to the problem, while the Kingdom’s three biggest operators are able to protect their market share from less-established competitors.

“The leading three operators are protecting their market position against new entrants and will not measurably suffer at the margin,” he said.

“There is no imminent market disintegration, however, new players will unlikely gain any new ground in converting customers from the top three and effectively they therefore suffer the gravest consequences as result of the pricing competition.”

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