Cambodia's newest internet service provider (ISP), Today Communication, will join a busy market when it begins offering its services in Phnom Penh on Saturday. However, the company hopes that its focus on providing quality service, especially to businesses, will distinguish it from more than 30 ISPs currently in the market and allow it to survive the ongoing price war waged by the market’s existing players.
Steve Miller, the company’s general manager, recognises the difficult circumstances of the ISP market in its current state, and expects the cutthroat pricing and low margins of his competitors will lead many of them to bow out of the race.
“There is a bit of a price war at the moment in the residential services space, so margins in this market have thinned considerably,” he said yesterday. “Providers are attempting to make up the difference by focusing on increased sales volumes, often diverting their attention from customer services and reliability.”
He said Today Communication would not compete aggressively on price, but would instead seek to provide higher-quality service at a suitable premium rate.
“Competing on the basis of quality and reliability makes us a player in the business ISP market, and it is here that we seek to build our brand,” he said. “The market for business networking solutions is not negligible in Cambodia, and we anticipate eventually capturing a meaningful share with our current model.”
The company claims to be the only ISP in the country to rely solely on fibre-optic connectivity for all its services.
However, Paul Hogan-Blanche, former CEO of Ezecom, one of the Kingdom’s largest internet providers, said the company has been using the technology for the past eight years. Having extended its fibre-optic network to cover 99 per cent of the country, the company is planning to connect Cambodia with the first submarine fibre-optic cable in March 2017, a move that will greatly improve internet speeds and further bring down prices.
Even without this link, internet pricing continues to fall as Cambodia’s 34 registered ISPs compete for a relatively small number of fixed-line internet users.
Steven Path, head of the Cambodian ICT federation, said while good-quality 4G mobile internet is becoming widely available, demand for fixed-line internet is growing as consumers use increasing amounts of bandwidth. Yet he expects not everyone in the market will make it.
“Surveys have shown that consumers are not happy with the speed, stability and price of their internet. Whoever can solve this will ultimately win the war in the ISP market,” he said. “This is a wake-up call for the industry and this will trigger major consolidations, because not many ISPs can continue at these prices.”
Path said upstream providers with their own infrastructure would have a major advantage during a consolidation, while quality of service could be a deciding factor on who will survive.
“If there are two internet service providers – ISP A, which is very cheap but offers poor service – and ISP B, which is running 99 per cent of the time but is much pricier – I will pay the premium price and choose ISP B every time,” he said.