MOBITEL has launched Cambodia's first digital Global System Mobile (GSM) telephone

service. The coverage area will initially only include metropolitan Phnom Penh, with

coverage due to expand to Kompong Speu and Sihanoukville soon.

Global "roaming" capabilities - allowing callers to receive and place calls

from outside Cambodia - are not being offered now, but MobiTel says that Singapore

and Hong Kong will be first on-line.

Costs per telephone unit range from between $440 and $900.

Trial users say they are pleased with the service, not so much because it is flawless,

but because it is better than the what is currently available on the market for calling

in Phnom Penh.

"We already had a few hundred bookings before being activated," says MobiTel

general manager Iain Williams, though he warned potential customers not to expect

too much from the nascent system.

"People come in expecting the world. We can only give them half of that,"

he says. "Metropolitan Phnom Penh will be truly covered well - pretty much within

a 10-kilometer radius outside the city."

Nationwide service will be introduced incrementally. "We have the equipment

for Kompong Speu and 20-30km beyond that and plan to have a satellite link to Sihanoukville

in the next couple of months," he says. "We would like to expand to Siem

Reap and Battambang in the next year."

Customers will also have to wait for an international "roaming" service.

GSM systems generally allow a user to take a handset abroad and place and receive

calls using their regular number.

"Once the technical side is figured out, Singapore and Hong Kong will not be

a problem," Williams predicts. "Our 'A-list' is ASEAN, but Vietnam does

not want a roaming service for political reasons. With others it is a bilateral process."

He says he hopes to have agreements with the UK, France and Australia within a year.

Unit costs range from between $440 for a Motorola D628 and $900 for a Nokia 8110,

plus a $60 connection fee.

With outgoing local call rates of 23 cents per minute, MobiTel is aiming to make

money from usage rather than telephone sales.

Samart, by comparison, charges 17 cents a minute for outgoing calls, but its telephones

are more expensive.

Three free options - caller identification, call forwarding and voice mail - will

be offered by MobiTel. "We see it as a differentiator," Williams says.

"The services will increase air-time and contribute to the general sanity of

the market."

The options will be particularly necessary once the roaming service is introduced,

preventing travelers from being saddled with hefty bills for international calls

- which will be charged to the MobiTel customer, not the caller.

Within Cambodia, however, incoming local and international calls on MobiTel are free.

The MobiTel project is slated to cost $50m eventually, with $13m already invested.

MobiTel is the brand name of Cam GSM, a joint venture with the Ministry of Posts

and Telecommunications and Royal Millicom. The latter is a joint venture between

the Royal Group and Luxembourg-based Millicom International Cellular, which holds

a majority stake in the venture.

"It is a small market, but it will grow," says Williams of Cambodia. "We

do not expect to make a profit for four to five years. The group strategy is to target

developing countries and be the first with quality mobile phones. They are the cars

of the future."

Williams won't say how much MobiTel has spent on advertising, but concedes that the

glitzy 60-second spot now showing on Cambodian television is the most expensive ever

produced here.

A frequently-quoted market analyst, who tried the Mobitel system for two weeks, says

he is pleased with the service. "They are not doing a Mickey Mouse job like

everyone else. The lines are clear and the connections are good." He says that

calls to other MobiTel phones are good and land-lines are not a problem, but notes

that connections to Camtel and Shinawatra are still sketchy.

Whatever system, no matter how sexy, will still be tempered by the parameters of

Cambodian telecommunications, and seemingly endless bottlenecks in the connection

network.

"People think we will solve all of their problems. We will be no different due

to factors beyond our control," warns Williams. "But we can control what

is coming into us."