Mobile-phone coverage in rural areas is providing a boost to local businesses, but although expanding networks costs a lot and earns little, it still makes sense for at least one player
Some towers don’t make money but technically they improve network quality and coverage."
As mobile-phone providers expand coverage into the farthest reaches of the Kingdom, experts and supporters of the technology are anticipating it will unlock productivity and economic growth across the country.
“People are using mobile phones to share information with customers and suppliers in a way that just hasn’t been possible before,” said John Brinsden, Acleda Bank vice chairman. “Disseminating information by phone helps people get better prices based on supply and demand,” he said.
Yang Sang Koma, the director of the Cambodian Centre for Study and Development in Agriculture (CEDAC), said the benefits were particularly obvious in rural areas.
“Mobile phones help people solve problems,” he said. “Certainly phones can be expensive, but farmers use them to gain knowledge about prices and markets, making back more money than they spend on their phones.”
For every 10 percent increase in mobile teledensity, a measure of the number of phones per 100 people in a given area, there is a 0.7 percent growth in economic output in the area, according to Hamadoun Toure, secretary general of the International Telecommunication Union (ITU).
Although no studies have been done in Cambodia, as the Kingdom’s nine mobile-phone operators establish base transceiver stations across the country, they are driving mobile-phone demand in the most remote places.
Hard sell done well
IT can't be easy being a mobile-phone operator in Cambodia, one of the world’s most competitive markets, with nine operators chasing just 14 million people. The Post tagged along last week on a sales push in the coastal resort town of Sihanoukville, where a vanload of chattering employees from Metfone took the trip from Phnom Penh to set up a sales kiosk in the coastal resort. The setup is a familiar one across the country, with bright advertising hoardings slung everywhere and music pouring from speakers to entice the locals in for a closer look. Interest was strong, with price appearing to be a key consideration. The hottest sellers were low-end mobile phones retailing for US$14 and $17, as well as the firm’s $25 Methome device, which looks like a landline but runs off a mobile network. Many customers displayed intimate knowledge of tariffs and handset prices, quickly spotting any change from the last promotional visit. Though many sales seemed to hinge on these price points, most customers also seemed to have a solid grasp of comparative network quality. Many more had an eye to the future, looking for advanced products and 3G connectivity. Plenty for the customers to think about, and the operators, too. JEREMY MULLINS
Brinsden said he follows advancements in rural coverage closely as the bank prepares to launch mobile-banking services next year, potentially bringing more customers within reach of his bank.
New users are also saying that mobile phones have improved their financial well-being.
Duch Sokhom, the commune chief on Koh Rong Island, an hour’s boat trip from Sihanoukville, said his fishing-oriented village received only intermittent coverage from a base transmitter station (BTS) on another island, but that people were clamoring for phones to support their livelihoods.
“Life here is better than in the past,” he said. “No one forced mobile phones on the residents here; it’s just easier to contact other people, and it takes less time to solve problems.”
A fisherman on neighbouring Koh Rong Sanlen island said he almost immediately saw financial benefits through better access to market information after purchasing his first phone four months ago.
“In the past, middlemen met the fishermen at the docks, and I had to take the price they offered,” he said. “Sometimes I had fish, but no one showed up to buy, but now I can contact many people and get the best price for the fish, and also take it directly to them.”
Although his monthly phone bills approach US$15, he reckoned he more than offset the cost through higher profits.
On the same island, shopkeeper Pthan Thu Son also noted an increase in productivity after she went mobile. To stock her merchandise for sale, she used to close shop and travel to Sihanoukville every 10 to 15 days. “Now I call ahead to place my orders, and I can find the best prices,” she said.
“I give my money to a boat operator going to the market, and he comes back with goods for my shop.”
She said she also saves around $25 per trip by being able to search ahead for the best prices.
The greatest benefits from mobile phones tends to accrue to those in competitive sectors, or who had to rely on middlemen to get goods to market. For those enjoying a monopoly in an island-based industry, such as Koh Rong Sanlen’s lone boat builder and repairer Chia Sang, mobile coverage has had limited impact.
“Before, customers would come to me to repair their boats,” he said. “Now they call ahead and still come to me to repair their boats. I have no need for my phone.”
On September 3 this year, mobile-phone operator Metfone switched on a tower on military-controlled Koh Tang island, three hours by boat from Sihanoukville. In a strange twist, Metfone is operated by Viettel, a subsidiary of the Vietnamese military.
Its Cambodian counterparts saw an almost immediate practical benefit from Viettel’s arrival on the island.
“Of course it was difficult to communicate with boats and other headquarters before mobile phones, but it was especially hard for soldiers stationed here to communicate with family,” said military spokesperson Van Dy.
Centred atop the island’s highest point, coverage from the BTS extends some 50 kilometres over the open seas, according to Viettel technician Ouch Touch, who visits once a week for maintenance purposes.
Those in range of the signal are already looking to move beyond making mobile-phone calls, seeking also to use their phones to access data over the Internet.
“We need the Internet,” said Duch Sokhom. “People don’t know how to use the Internet, but this is a human resources problem. People will learn very fast, like they did with mobile phones.”
Across in Sihanoukville, Viettel team leader Hour David was installing a broadband Internet connection in a restaurant. With packages starting at $20, he said it was still beyond the reach of most people in the region. “So far we sell the Internet mostly to foreigners and businesses like restaurants, although we are beginning to set up access for more university students,” he said.
Sihanoukville local Oaun Narm Koeu, who sells plaster for use in construction, said he had been logging in frequently to keep up to date on border tension with Thailand, where he sourced his materials. “I always check this information on the Internet, but I would be happier if I could get the Internet on my phone,” he said.
ACLEDA’s Brinsden said mobile phones have the potential to leapfrog broadband and fixed-line Internet in rural areas as people have already become accustomed to accessing information through mobile phones.
But providing mobile-phone coverage in remote areas is no easy task, and far from profitable. It cost around $150,000 and took 40 Viettel employees some 35 days to erect a tower on Koh Tang island and switch on the base transceiver station, according to Hoang Anb Tuan, Metfone’s director in Preah Sihanouk province.
With only 100 users on the island, a return on that investment is unlikely to be seen anytime soon. However, Managing Director Nguyen Duy Tho said the decision still made sense from a business as well as a social perspective.
“This is our business philosophy,” he said. “Some towers don’t make money, but technically they improve network quality and coverage.”
The company has 2,400 base transceiver stations currently active and plans to have 3,000 in operation by the end of 2009, one in every commune, he said, representing a significant investment.
The social benefits to users also had almost unlimited brand value, he added, citing the potential for the firm’s coverage off the south coast of Cambodia to save lives. “The tower may not make money, but if a fisherman, for example, is fishing near our tower and a storm hits, he can phone for emergency help,” he said.
“If you were me, would you install such a tower?”