In the space of five years, mobile service operator Smart has gone from the proverbial new kid on the block to one of the most widely used providers in Cambodia’s hyper-competitive telecom sector.
Launched in 2009, Smart stormed onto the telecom market with its low-cost mobile call tariffs, which dramatically undercut its competitors’ $0.20 to $0.25 cents per minute call rates.
Through a series of infrastructure evolutions, partnerships with key global conglomerates and always with an unrelenting focus on Cambodia’s 16-to-25 age bracket, the local company has amassed a subscriber base of more than six million.
“We were the smallest when we started five years ago with only coverage in Phnom Penh and Siem Reap,” Smart chief executive Thomas Hundt said.
“Some of our competitors didn’t really take us too seriously back then, but we have proven differently with our game-changing tariffs and customer service.”
The early days were admittedly not so easy, according to the German-born 37-year-old. Like many startup companies, Smart spent the better part of its first three years just trying to break even.
“To deploy a network, significant investment is needed. But then if your network is empty it will not succeed. So what we did is we managed to utilise our network quickly through low and attractive tariffs and reached a decent network utilisation rate very fast,” Hundt said.
The fast uptake of Smart services in its formative years allowed the company to start investing profits back into its infrastructure and network – a technique that is still being used today.
In 2013, the company reinvested some $50 million of revenue back into its network, which then paved the way for Cambodia’s first 4G LTE network to be rolled out earlier this year.
More recently, under new Malaysian parent company, Axiata, which bought a 90 per cent share of Smart late last year, Smart reported record revenues totalling more than $85 million as of June 30.
“Telecoms is one of the fastest rotating businesses there is. Next-generation technologies come in every few years while the expectations of consumers changes constantly. More smartphones mean more data consumption. All that has to lead to more investment in your own networks,” Hundt said.
But the Smart story is not only about rapid financial and capital growth.
For Hundt, keeping Smart on the cutting edge of the telecom business in Cambodia has been paramount. In July, the company became an official reseller of Apple products, with November now earmarked for the long-awaited arrival of the iPhone 6 to the Cambodian market.
More recently, in August, the firm also announced a long-term partnership with Universal Music, which granted Smart exclusive rights to license, distribute and resell the US music giant’s content across the Kingdom.
“It’s a lifestyle now,” Hundt said about the Smart brand.
Smart and Universal teaming up marks the first time a global music production house has entered the Cambodian marketplace.
The deal, which was officially announced on September 10, could also spur an entirely new wave of appreciation for digital music content in the Kingdom where pirated CDs and DVDs have long held rank in the marketplace.
“So far, the only possibility of accessing this kind of good-quality music content in Cambodia has been by buying a fake DVD or CD,” Hundt said.
“The Universal partnership is also about helping to legalise music consumption. We have spoken to quite a few institutions who are broadcasting music . . . they all say they are happy to pay for the music and they acknowledge that music is not a free service.”
As part of the new partnership, Smart will offer call-back ringtones to all subscribers, music-streaming services via a mobile gateway, broadcast a weekly top-50 radio show and even give music lovers the opportunity to see their favourite artists perform in countries like Singapore.
“Certainly it is a commercial arrangement, so at the end of the day there is an aim to monetise it, but the aim is really to bring world-class entertainment to Cambodians and help them experience music,” Hundt said.
“In the long run we are also looking at ways to give Cambodian artists a platform to become an artist that is recognised regionally,” Hundt said, adding that a music television program has not been ruled out either.