The sight of people glued to their smartphones is omnipresent across the Kingdom, proving that Cambodians are hungry for pictures, videos, Facebook and music. As usage habits mirror the possibilities that smartphones deliver, the surging appetite for data on mobile devices is the logical consequence of technological innovation.
The majority of phones sold in Cambodia, available for as low as $50, are 3G capable smartphones. Soon 4G phones running as low as $100 could enter the market. With the low price of these high-tech devices, the drive for data consumption has forced telecommunication companies to continuously invest in new technologies and hardware – and apparently in innovative content as well.
At least this is what Thomas Hundt, CEO of Smart Axiata, believes. According to him, Smart is the only company in Cambodia that facilitates the fastest mobile data available as of now, while providing innovative content for its customers too. The Demi Lovato concert last month impressively demonstrated this drive for innovation.
The concert, which brought in 30,000 fans, was the largest music event of the year. And all Smart subscribers can now stream the American singer’s songs – and more than 300 songs from another 50 plus artists – via the Smart Music application that is available free of charge until June. This opportunity to bring music to your phone, as well as to the stage, was made possible by Smart’s partnership with Universal Music Group --the largest music corporation in the world.
While Thomas Hundt implied that offering music legally was only the beginning of Smart’s ambitions in the field of paid content that combats piracy, he stressed that investing into mobile networks that can carry vast amounts of data streams is still the first priority for the company. After all, Smart is a telecommunication provider that guarantees the fastest internet access and best voice call quality to its more than 7.5 million active subscribers.
Ongoing investment into the network
Every mobile network starts with physical towers where 2G, 3G and 4G technology can be installed on. Currently, all 1,800 towers Smart erected over Cambodia carry 2G, the technology responsible for voice calls. Soon the entire network will provide 3G, the technology that allows decent data usage. According to Hundt, 75 per cent of the towers have already been upgraded with 3G.
“The network has to be expanded further to cater to the exponential growth in data traffic that is generated through smartphone use. Last year, our data traffic multiplied by four times,” he said, adding that it was important to explain the technical details of the different networks.
“The underlying technological challenge is managing the capacities on specific frequencies that individual technologies occupy. Data transmitted via 3G technology, for example, travels usually on 2,100 megahertz waves from the antenna to the user’s smartphone. The higher the frequency, the more data that can be typically carried. A high frequency results in a much smaller reach though, which is why when a user cannot access the fastest layer of networking with their smartphone, a slower technology on a lower frequency steps in,” he said.
To overcome this, he explained that telecommunication companies have to constantly invest, and reinvest, in an increasing density of their towers, into hardware and software upgrades.
“For a telecommunication company this means to constantly reinvest into the network, into faster technologies such as 4G,” he said.
Ongoing investments into existing and new technology are obviously very costly, which is why not all telecommunication companies can provide cutting-edge services and fast internet. In fact, Smart is the only provider of 4G LTE in Cambodia as of now, currently covering all major cities such as Phnom Penh, Battambang, Siem Reap, Kampong Cham, Takhmao and Sihanoukville. Smart will make 4G LTE available in all 25 provinces by mid-June while its 2G network covers more than 98 per cent of the whole country’s population. So far, Smart alone has invested more than 150 million USD since 2013 to build up the mobile infrastructure.
“We are here to stay and think long-term,” Hundt explained, adding that “when the market consolidates further, there will be three, maximum four, telecommunication companies in Cambodia remaining, considering the size of the population.”
The challenge of facilitating data with limited frequency availability
The key technology in providing the fastest possible internet that consumers already demand, and will demand even more in the future, is 4G LTE.
“[4G] technology is capable of using all the fragmented frequencies that are around. 4G is compatible with wave lengths of 700 or 800 megahertz and goes as high as 3,500 megahertz,” said Hundt.
Currently, many of these frequencies are not available however, which makes it hard for the technology to satisfy the surge in demand.
However, Hundt believes that there are several solutions to free up bandwidths to make 4G more accessible.
“In Europe, we already began years ago to migrate TV to digital and freed up the 800 megahertz frequency,” Hundt explained.
In Cambodia, many people still have analog TVs and switching to digital is something that has to be part of a broader plan, including making sure that new TVs sold on the market are able to receive digital signals, explained Hundt.
But bandwidth for fast mobile internet could be freed up immediately. “There are some players in the market that have been holding licenses for certain frequencies for years and never used them at all,” the Smart CEO revealed and added “these players have to give up the licenses so the government can give them to companies that actually use them.”
Pushing to reach the tipping point with content
Even though around 40 per cent of Smart’s revenue already comes from data and value added services, and up to 40 per cent of the 7.5 million Smart subscribers use data services, a majority of the users don’t see the vastness the Internet provides and the content it offers.
“Many users believe Internet and Facebook are the same thing. But Facebook is only a subset of the Internet, certainly used for photo, video and news sharing as well as for staying in touch,” Hundt explained and added that 70 per cent of all Facebook users in Cambodia chose Smart as the mobile Internet provider to connect to the social media application.
As one way to open up their customers beyond the limitations of Facebook, the company started its cooperation with Universal Music.
“We started to offer [music] in a broader manner such as through the Smart Music App for music streaming to provide alternatives for the use of mobile Internet,” Hundt said.
As the only provider of 4G LTE Internet, Smart is reaching the tipping point for when the data business will contribute to the majority of the company’s revenue.
“By the end of this year, or maybe early next year the latest,” Hundt said.