P HNOM Penh's clogged telephone networks are likely to further deteriorate unless

authorities take firm steps to properly regulate telecommunications, according to

industry sources.

Two of Cambodia's three cell phone operators report a surge of customer complaints

in recent months, most of which involve problems in dialing between mobile networks

and between land lines and mobile phones.

"It's a mess," said one industry source who requested anonymity. There

are too many networks for the number of available customers. No-one is making a profit,

so no-one can reinvest to increase the capacity of their networks," he said.

"What we have in Cambodia is a free-for-all - effectively there is no regulation

of the industry. There is no planning and no coherent policy and the result is simply

chaos.

"We have three mobile networks, two radio-loop networks and land lines but the

[interconnections] between these are simply inadequate to deal with the volume of

traffic," the source said, adding that mobile operators continue to sell new

hand sets with little regard to their system's carrying capacity.

"The result is congestion and irate consumers who spend around a thousand dollars

for a hand set which doesn't work."

Other industry sources agreed that Cambodia was over-serviced with telephone providers,

a situation which had led to a duplication of facilities without the advantages offered

by economies of scale and which required greater trunk capacity between networks.

"The setting up of telecommunications in Cambodia has not been properly thought

through. The subscriber base here cannot support any more than two networks efficiently,

but we have a market free- for-all," one source said.

"It's only a matter of time before the whole thing falls over. And there's no

real excuse for it, because Cambodia has a whole world of experience to draw on."

Under-Secretary of State for Post and Telecommunications (MPTC) Koy Kim Sea said

communication difficulties were the result of two major factors: inadequate capacity

to switch calls from one system to another and the lack of regulation to ensure the

smooth operation of existing services.

"People will not like it, but I have to blame my own ministry," he said.

"We haven't planned... very well - we just left things to market forces. But

we recognize the need for tighter regulation now, we are working on the problem and

things should get better over time."

A spokesman for Camtel - Cambodia's longest established mobile operator - agreed

the problems were caused by a lack of coordination, but denied his network was oversubscribed.

"We are nowhere near the full capacity of our system," he said.

"The problems of congestion are caused by land-line users. Seventy percent of

traffic on our network is taken up by people calling our mobiles from fixed phones.

"Those users pay by the call, not by the minute and the money goes to either

the Ministry of Posts and Communication or the operators of fixed phones. The calls

consume our capacity, but we get no payment for them."

He said the congestion problems of recent months had emerged as people begun to realize

that fixed phones were cheaper for making calls.

"What we find now is that people are making more calls on fixed phones while

they use their mobiles for receiving. Our revenue is really suffering because even

though callers use our network capacity, we are not paid for incoming calls,"

he said.

However, mobile operators are hoping for an agreement with the MPTC that will both

increase profitability and reduce congestion. One proposal, which operators hope

will be adopted early next year, would see the MPTC charge fixed phone calls by the

minute while mobile networks will be paid 5 cents a minute for every call they receive.

In theory, the plan should result in a reduction of calls from fixed phones moving

through the mobile networks, thereby reducing congestion

The mobile operators are also talking about sharing revenues from calls between the

various networks, but to date no agreement has been reached.

In any event, industry insiders are predicting a tough 1997 for Cambodia's existing

mobile companies as they confront continuing operating loses and the entry of new

players into an already over-serviced market.

Starting in February, 10,000 new fixed lines - installed by the Japan International

Cooperation Agency (JICA) - will come on-stream, while a new mobile system is scheduled

to begin its operation early in 1997.

The release of the new lines is expected to eat into the expected sales of mobile

phones, further reducing mobile operators' profitability in the future.