Logo of Phnom Penh Post newspaper Phnom Penh Post - Regulator gears up for mobile pricing showdown

Regulator gears up for mobile pricing showdown

Seatel employees seated for customer service in a company branch in Phnom Penh.
Seatel employees seated for customer service in a company branch in Phnom Penh. Hong Menea

Regulator gears up for mobile pricing showdown

Cambodia's telecommunications regulator yesterday stepped up efforts to avert a brewing price war between the country’s six mobile network operators, ordering the companies to submit profitability statements within the next 10 days and summoning all operators to a meeting at the end of the month where it will determine whether any laws have been breached and discuss possible punitive action.

The announcement by the Telecommunication Regulator of Cambodia (TRC) coincided with the latest salvo in a looming price war, with market newcomer South East Asia Telecom, or Seatel, rolling out the most radical promotion to date. The Singapore-based telecom has advertised it will exchange $2 for $2,000 worth of on-network calls and $1 for 2.7 gigabytes of data.

The price war began late last month when CamGSM, the operator of Cellcard, launched a promotion that allowed its customers to exchange $1 for $100 worth of mobile services. Following suit, Malaysian-owned SmartAxiata launched a package this month that allows subscribers to exchange $1 for $125 worth of mobile services.

TRC spokesman Im Vutha said yesterday that with Seatel’s actions and a potential price war looming, the regulator could invoke Article 78 of the Telecom Law. The article, used in cases of an operator found in breach of its licence terms, mandates the TRC to first warn, then suspend an operator of its licence. It also has the option to impose fines.

“We are looking at how we can use the law to help protect both customers and providers,” he said. “If the fighting continues we have to stop it.”

While Vutha admitted that suspending an operator’s licence was a drastic step that the government would prefer to avoid, he said operators had 10 days to submit profitability statements for review.

“After that we will investigate them and then we’ll summon all operators to explain themselves by the end of the month,” he said. “We will have a decision about prices by early March to see if these promotions can continue.”

However, Vutha conceded that the regulator was hamstrung and would have to rely on operators to transparently submit their reports.

“The problem with our regulations is that they are outdated,” he said. “As consumers have shifted toward using data we don’t know how to regulate and value its usage to determine the correct price structure.”

Anthony Galliano, CEO of Cambodian Investment Management, said that it would not be unheard of for the authorities to start exerting pressure to rein in or stabilise prices without updating regulations.

“The TRC has the power of law to determine tariffs, so arguably the law is current and empowers the TRCto establish prices on both data and voice,” he said. “The difficulty [in pricing] probably applies to ascertaining the profitability of data services.”

Galliano added that by demanding operators submit profitability statements on recent products, it would give regulators “a fantastic opportunity to compare costs and spot anomalies”.

“Nevertheless, I would expect operator costs will be decidedly inconsistent,” he said.

MOST VIEWED

  • Draft law on state of emergency pending finalisation

    Prime Minister Hun Sen will lead a top-level meeting on Tuesdays to review the draft law on imposing a state of emergency. Meantime, he has decided to close all casinos in Cambodia effective April 1. In the press conference after the National Assembly met today, Hun

  • State of emergency on table amid pandemic

    Prime Minister Hun Sen, his deputy prime ministers and legal team will meet on Tuesday to review the draft law on declaring a state of emergency, as Covid-19 cases rose to 107 in the Kingdom on Monday. Speaking at a press conference after a parliament meeting

  • Stranded passengers petition UK for help

    Some 10,521 people have signed an online petition calling on British Prime Minister Boris Johnson and relevant officials to fly nearly 200 passengers out of Cambodia. The petition is targeted at 15,000 people. Most of the passengers are British nationals, who are stranded in Cambodia after airlines cancelled

  • Many in limbo as tension heightens

    As the Kingdom restricts travel and prepares for a state of emergency, some foreigners in Cambodia are scrambling for a way home. Foreign embassies in Phnom Penh are making efforts to get their citizens out, but cancelled flights have become common due to the coronavirus

  • Covid-19 Pandemic: Force majeure and legal consequences

    Is the Covid-19 pandemic considered an event of force majeure? The World Health Organisation declared the novel coronavirus (Covid-19) outbreak a pandemic on March 11. Following this declaration, the Ministry of Health and other ministries have taken various legal and administrative measures to prevent the rapid

  • State of emergency draft law set for NA

    A draft law aiming to place the Kingdom in a state of emergency amid the Covid-19 pandemic is set for a debate at the National Assembly (NA) after going through the Council of Ministers’ Standing Committee meeting led by Prime Minister Hun Sen on Tuesday.