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Truce to end deep-discounted mobile pricing

A shopkeeper sorts a selection of SIM cards for sale in Phnom Penh.
A shopkeeper sorts a selection of SIM cards for sale in Phnom Penh. Pha Lina

Truce to end deep-discounted mobile pricing

The majority of the Kingdom’s six mobile operators have agreed to stop running deep-discounted mobile voice and data deals after admitting they had deliberately engaged in predatory pricing, the telecom industry regulator said yesterday.

The tentative truce comes after weeks of escalation in competitive pricing, with rival operators rolling out increasingly grand call and data promotional offers. Fearing an all-out price war, the Telecommunication Regulator of Cambodia (TRC) pushed forward a scheduled meeting with the six operators, calling them in yesterday to defend their pricing platforms.

“Almost all of the operators agreed that they would stop running their discounted promotions next week, with only one refusing yet to commit,” TRC spokesman Im Vutha said. “The operators confirmed that what they were doing was engaging in unfair competition and issuing unprofitable products.”

He said the TRC would officially release an announcement on Tuesday that would warn operators to stop advertising massive discounts immediately. While he declined to name which operator failed to fall in line with mounting government pressure, he said the public would know by next week as the government was prepared to publicly name and shame them if they failed to comply.

If mobile network operators continue to buck the regulator’s demands, legal action will be taken, he added.

Cambodia has six mobile network operators: Smart, Metfone and Cellcard, qb, Seatel and Cootel.

CamGSM, the operator of Cellcard, sparked the current price feud last month when it launched a promotion that allowed its customers to exchange $1 for $100 worth of mobile services.

Malaysian-owned Smart Axiata upping the stakes with a $1 for $125 promotion. South East Asia Telecom, or Seatel, entered the ring last week, offering $2 for $2,000 worth of on-network calls and $1 for 2.7 gigabytes of data.

Vutha said cutthroat pricing was unprofitable for the operators and unhealthy for the industry.

“It will be acceptable if operators go back to normal competition by avoiding these massive discounts,” Vutha said. “We want sustainability in the industry that makes consumers, regulators and operators happy.”

The government is also concerned about its own revenue-sharing stake in the telecom market, he added.

“When the industry is not profitable, the government’s revenue from tax is not paid,” he said.

However, he offered assurances to consumers that they would be protected and those who had bought the discounted packages would be able to use the full credit.

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