The Telecommunication Regulator of Cambodia (TRC) is calling all mobile phone operators to attend a meeting next week in order to reconsider the costs for within- and across-network calls, after disputes over bonus promotions in Cambodia’s crowded telecoms market.
TRC director Mao Chakrya said that for the meeting on Thursday next week he would discuss the “cost base” of phone calls to which all operators’ representatives agree on, in order to avoid having costs below the agreed price.
“We do not know yet about the cost base, but … we will not allow the operators to operate below the cost base,” he said, adding that “this is not correct, and operators must have regulations”.
In an effort to tackle price disputes between the mobile operators and to set minimum tariffs, the Ministry of Economy and Finance and the Ministry of Posts and Telecommunications signed the Inter-Ministerial Prakas Number 232 on Minimum Tariffs of Mobile and Fixed Telephone Services and Interconnection Fees in December 2009.
According the prakas, the minimum cost of calls within a network is 4.5 US cents per minute.
The minimum tariff for cross-network calls is 5.95 cents.
In response to suggestions that the Ministry of Posts and Telecommunications could affect free market competition in the Kingdom, Mao Chakrya said the using operation cost, which is below the cost base, would lead to companies losing profits and lead to failures.
“We defend the benefits of the people, it is the duty of the TRC,” he said.
Thomas Hundt, CEO of telecom operator Smart, said there’s no official indication of a meeting yet, but that does not mean the meeting is not taking place.
“I cannot give you any idea what could be the direction of the meeting, but I think the public opinion which you can see everywhere is speaking a … strong language, the public, the consumers are not happy,” he said.
The Post reported earlier this month that the TRC had issued warning letters to mobile operators Beeline and Smart over their recent advertisements, saying they violate 2009’s inter-ministerial prakas 232.
Earlier this week Smart sent text messages to its customers, saying “due to Prakas 232 we are presently not allowed to provide any call bonuses.”
According to Anthony Galliano, CEO of Cambodian Investment Management, [the consolidation in Cambodia’s mobile sector] “was a matter of natural selection and will result in a solid and sound group of survivors.
“As the market narrows down to a healthy three operators of significance, expectations are that pricing will be more competitive and consumers will be offered even more attractive packages. The three will scramble for market dominance and thus this should lead to even cheaper rates,” he said.
Galliano said that the regulators, however, may continue to attempt to stabilise pricing at a level they are comfortable with, which puts everyone at the same level.
While not the best scenario for consumers, “it will likely lead to a more financially sound industry, something severely lacking in the past”, he added. “The key differentiation factors will be marketing, coverage, and quality of service rather than price.”