Logo of Phnom Penh Post newspaper Phnom Penh Post - Beeline books $500m charge after overestimating market

Beeline books $500m charge after overestimating market

Beeline books $500m charge after overestimating market

120315_07

VimpelCom, the Netherlands-based parent company of Cambodian mobile operator Beeline, booked an impairment charge of US$527 million on its operations in Cambodia and Vietnam, according to a 2011 company report.

{jathumbnail}

The impairment, or revaluation of VimpelCom’s assets in the two Southeast Asian countries, highlighted the company’s over-valuation of the markets, which it entered in mid-2009.

Intense competition among Cambodia’s eight active operators, as well as the government’s willingness to continue issuing operating licences, had led to the company’s over-estimation, Tokyo-based Sullivan & Frost analyst Marc Einstein said yesterday.

“They have by far the deepest pockets of any operator in the [Cambodian] market, and they probably thought they could just fight it out. But that’s not the case,” Einstein said.

As of November, Beeline had 630,000 subscribers, an increase of 100,000 since July, according to numbers obtained by the Post.

The operator had lost subscribers between March and July of last year, the Post reported.

Given the operator’s backing, Beeline might remain in the Cambodian market for now, Einstein said.

“They’re probably not in a rush to leave, but they have operations all over the world that they could be paying attention to,” he said.

Beeline, along with Mfone, qb and Excell, were the Kingdom’s four smallest operators with 1.45 million subscribers among them in November, according to numbers obtained by the Post.

Excell subscribers have remained flat since early last year at 40,000, and qb added 10,000 customers between July and November with 90,000, the numbers showed.

Metfone, Cellcard, Hello Axiata and Smart Mobile account for more than 90 per cent of the Cambodian market by subscriber numbers with about 13.5 million subscribers, although analysts have said the numbers are inflated.

Insiders said the market should see substantial merger and acquisition activity in 2012.

Beeline general manager Gael Campan declined to comment.

MOST VIEWED

  • Proof giants walked among us humans?

    For years a debate has waged about whether certain bas relief carvings at the 12th-century To Prohm Temple, one of the most popular attractions at the Angkor Wat Temple Complex in Siem Reap province, depicted dinosaurs or some rather less exotic and more contemporary animal,

  • New US bill ‘is a violation of Cambodian independence’

    After a US congressmen introduced bipartisan legislation that will enact sanctions on Cambodian officials responsible for “undermining democracy” in the Kingdom, government officials and the ruling Cambodian People’s Party on Sunday said they regarded the potential action as the “violation of independence and sovereignty

  • Long way to go before Cambodia gets a ‘smart city’

    Phnom Penh, Siem Reap and Battambang will struggle to attain smart city status without adopting far reaching master plans, according to officials tasked with implementing the program. The brainchild of the Association of Southeast Asian Nations (Asean), the smart city program seeks to link up

  • Japan bank buys major stake in ANZ Royal Bank

    Japan's largest bank acquired more than half of ANZ’s shares in Cambodia on Thursday, according to a statement from Kith Meng’s Royal Group. Japan's JTrust Bank, announced that they had acquired a 55% of stake in ANZ Royal Bank. According to a Royal Group