The Ministry of Post and Telecommunications has begun using budget allocations from the Universal Service Obligation Fund (USOF) to build telecom infrastructure in remote areas of Cambodia where operators are less willing to expand, a USOF official has said.
Funds from the USOF are used by the government to go 50-50 with telecom operators to encourage them to enlarge their networks.
On Saturday, the Telecom Ministry and Smart Axiata announced the construction of a mobile base station in Kampong Chhnang province’s Taing Krasaing commune, splitting costs down the middle.
This is the third project that the ministry has backed with funds from the USOF. A similar strategy was used in collaboration with telecom firm Viettel to boost mobile infrastructure in Kampong Chhnang’s Kampong Leng district, as well as Koh Kong province’s Areng district.
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Department of Post and Telecommunications director-general and chairman of the USOF Tol Gnak said that the ministry has contributed funds to push for services in rural areas. This, he said, will reduce the gap between urban and rural Cambodians.
He said if there were no capital contribution from the ministry, companies would not put up capital to improve infrastructure in those areas.
“For many operators, remote areas don’t have enough economic potential to justify investments,” he said, adding that without help the projects would be costly and bring low returns.
Gnak did not specify the amount of money spent on each of the infrastructure projects.
The 2016 Telecom Law and subsequent sub-decrees set up two related funds – the Capacity Building Research and Development Fund (CBRD) and the USOF.
They are meant to promote the development of infrastructure and services in rural areas and foster new talent in the industry. The USOF requires that telecom operators contribute two percent of their gross annual income.