Cambodia's largest internet service provider Ezecom announced yesterday that it would help build the country’s first submarine communications cable, a move that should strengthen the company’s hold on the market and dramatically improve internet service at a lower cost.
The planned 1,425-kilometre line will connect Cambodia to Malaysia, one of two other partners in the deal, where it will then plug into the Asia- American Gateway (AAG), a 20,000- kilometre cable linking Southeast Asia to the United States and much of the rest of the world.
Ezecom CEO Paul Blanche-Horgan signed the memorandum of understanding yesterday at the Cambodiana Hotel with Marzuki Abdullah, Telekom Malaysia Bhd’s special adviser for Global and Wholesale.
Operational by the end of 2014, the cable will cost about $80 million. Construction is expected to start in September or October this year.
The ambitious project intends to “vastly improve Cambodia’s independence in communications and internet connections,” Blanche-Horgan said. Ezecom is part of Cambodian powerhouse Royal Group.
Landing stations from the cable system, referred to as the MCT, or Malaysia-Cambodia-Thailand, will be in Preah Sihanouk province and Kuantan, the state capital of Pahang in Malaysia.
The Thailand segment of the trifecta is in anticipation of a Thai provider joining the consortium by the time construction begins later this year.
“The MCT cable will take us to the next stage of development, faster, more cost effective,” Blanche-Horgan said,
To date, Cambodia has had to rely on slower connectivity via fiber-optic cable running into neighbouring countries Vietnam and Thailand, who are already connected to the AAG’s submarine line.
“Right now, we will have to go via Thailand or Vietnam to hook in to the AAG cable, Blanche-Horgan said. “The MCT cable will allow us direct access.”
Ezecom gained the rights to the project through it’s acquisition of AAG’s only Cambodian member, Telcotech Ltd, in 2011.
Prakash Velayudhan, director of special projects at Telcotech, said that while the Cambodian consumer currently experiences top speeds of 512 kilo bits per second, they will be able to enjoy speeds upwards of two mega bits per second once they install the cable.
“In Europe and the US we can see a connection of eight mega bits per second” he said, providing examples of the future potential.
Velayudhan said that businesses can also expect better rates with more diverse service offerings.
Kevin Der Arslanian, business analyst at China Market Research Group, said that it was only a matter of time before the cable went live, as Telcotech is part of the consortium of 19 members that owns a piece of the AAG cable network.
“This very same firm has been active in Cambodia building a fiber-optic network throughout the country, showing that full and direct connection was expected down the road. This move, therefore, doesn’t come as much of a surprise,” he said, adding that the results are “fairly clear: a faster and more reliable internet connection.”
On the question of market dominance, Der Arslanian cautions that regulators may need to intervene.
“It will be up to Cambodian regulations to ensure that Ezecom is made to lease access to its infrastructure at fair prices in order to avoid a monopoly situation,” he said.
Blanche-Horgan said that Telcotech (which is responsible for a third of the costs for the project) is 100 per cent owned by Ezecom, and anyone making use of the submarine cable will have to pay for the usage, but “the fees are of yet not established”.
The chairman of the ICT Association of Cambodia, Ken Chanthan, sees benefits not just for the Cambodian consumer but as a technological foundation for economic growth.
“When we integrate with ASEAN in 2015, we will not only have the free flow of goods and services, but also [a foundation] for banking and for government to government exchange of information or public services.”
Velayudhan, of Telcotech, said services could also improve in the mobile phone sector, as “a lot of the data usage now is on the mobile”.
Thomas Hundt, CEO of mobile operator Smart, said: “Cambodia needs fast access to the internet, direct access, and obviously this is helping to lower the costs as well for internet, so it’s a good move.”