Logo of Phnom Penh Post newspaper Phnom Penh Post - Mfone losses $13m

Mfone losses $13m

Mfone losses $13m

The majority owners of Cambodian mobile phone provider Mfone lost more than US$13 million in the Kingdom last year.

Pointing to the large number of mobile operators active in Cambodia, Thaicom said there was a “price war and intense competition in the market” in its annual report, which added an appreciating Thai baht as a factor in the loss.

The Bangkok-listed company claimed a loss of 405 million baht (US$13.2 million) in its Cambodia results for 2010, on revenues of 959 million baht.

This compares with a 7.6 million baht profit in the Kingdom in 2009, on 1.514 billion baht in revenues, the report released late last week stated.

The firm also announced an adjusted net book value for Mfone’s property and equipment to about 2.317 billion baht as of December 31, a 22 percent drop on the 2.972 billion baht it had claimed the previous year.

Thaicom did not discuss the reason for the downwards adjustment in Cambodia, but said globally its property, plant and equipment had also declined in value by 8.7 percent.

This decrease was “mostly due to depreciation and amortisation expenses in 2010”, it said.

Thaicom’s Cambodia operations had contributed 20.7 percent of its overall revenues in 2009, but had declined to 14 percent of the company’s global revenues in 2010, according to the report.

The declining value of the US dollar against the Thai baht last year impacted Mfone’s bottom line, as it generates much of its revenue in greenbacks.

“The appreciation of baht has caused lower revenue from the telephone business in Cambodia in baht as Mfone reported financial statements in US dollars,” the report said.

Despite a new strategic approach launched last year which saw Mfone increasingly target specific market niches by tailoring plans to groups such as young people and Muslims, user numbers also declined over 2010.

Mfone claimed 723,860 subscribers at the end of December 2010, a 15.8 percent decline on the 860,089 subscribers at the end of 2009.

Previous Ministry of Posts and Telecommunications statistics showed that Mfone had 660,000 subscribers last November.

Last year, former Mfone chief executive officer Adisai Soonthornratanarak had said the firm had previously “struggled” with competitive pricing among mobile operators, but said “differentiating yourself is the key to success”.

Thaicom is the 51-percent owner of Mfone.

The remainder is owned through a joint venture between Qatar Telecom and ST Telemedia of Singapore, according to Thaicom’s website.

It also owns 100-percent of satellite television provider Cambodian DTV Network Limited.

Cambodia has eight active mobile operators following a merger earlier this year between Smart Mobile and Star-Cell, with the combined company operating under the Smart brand.

At the announcement of the merger last month, Smart chief executive officer Thomas Hundt said the sector was likely overcrowded – a widely-held view in the industry – adding there were few countries with as many mobile operators relative to the number of people as Cambodia.

Company officials have confirmed that Yap Wai Khee is now serving as Mfone chief executive officer, after taking over the helm from Adisai Soonthornratanarak.

He could not be reached for comment today.

MOST VIEWED

  • Serious flooding across country

    The Kampong Speu provincial Committee for Disaster Management on Wednesday issued an alert after non-stop heavy rain caused widespread flooding. In Koh Kong province, authorities are working with the disaster committee and the Cambodian Red Cross to assist those affected after more than 350 homes were

  • CNRP points to King in call for vote boycott

    Leaders of the former Cambodia National Rescue Party (CNRP) have taken a new tack in their call for a boycott of the national elections later this month. They are now claiming that the people should follow the King, who is expected to abide by tradition

  • Actress’s NGO takes heat for promoting the ruling party

    An actress’s NGO which participated in an election campaign event contrary to the Law on Association and Non-Governmental Organisations (Lango) has been slammed. Chorn Chanleakena, a celebrity and the president of the Association of Artists Volunteering to Help Society, allegedly led its members in

  • Troop moves ‘won’t worry people’

    Senior officials at the Ministry of Defence and National Police said on Tuesday that riot training provided to the country’s police forces were aimed at preventing unexpected demonstrations and strikes before and after the July 29 national elections. The troop mobilisation, they said, would not