CAMBODIA is on the verge of making the leap into cyberspace. There are doubts about

its commercial viability, however, and therefore whether it will be economically

self-sustaining over the long-term.

The Ministry of Posts and Telecommunications (MPTC), with the assistance of the International

Development Research Centre of Canada (IDRC), will provide the Kingdom with a national

Internet service. In addition, MPTC is in the process of finalizing negotiations

with Telstra, the Australian telecommunications giant, to provide another Internet

service.

A government-run organization - comprised of MPTC, IDRC, LIDEE Khmer, and Open Forum

- is currently being established to provide a national Internet service. Its priority

is to provide Internet to government institutions free of charge and, secondly, to

not-for-profit NGOs at a subsidized rate.

"Connectivity will occur in the very near future, perhaps as early as next month,"

says Bill Herod, Research Assistant at IDRC.

Connectivity for Telstra may take a little longer. Following MPTC's request for tenders

last year, Telstra and a Sprint-led venture submitted proposals. "Sprint was

late," says MPTC's Under Secretary of State Koy Kim Sea, thereby virtually assuring

Telstra of winning the contract.

Kim Sea expects that MPTC will approve Telstra's proposal in 1-3 weeks, "if

the current negotiations are successfully completed." If this occurs, Telstra

could get the international links in 6 months, explains Michael Oesterheld, Telstra's

Business Manager.

Internet will most likely be used as a communications and research tool. "Internet

is a library for research," explains Mao Yourann, Vice President of LIDEE Khmer.

"With Internet, ministries can find out what treaties or policies other countries

have. Journalists will have access to newspapers across the world. Because it is

a sharing of information, Internet is a part of democratization."

"Internet can be an excellent tool to promote development," believes Paul

Matthews, UNDP Resident Representative. "We are in the process of developing

an on-line database where reports on a myriad of development topics about Cambodia

can either be downloaded or their location pinpointed. This will increase the efficiency

of researchers inside Cambodia tremendously."

"Furthermore, by connecting to discussion groups [on the Internet], universities,

communities, and development organizations will be able draw upon expertise from

around the world to find solutions, promote ideas, and generate dialogue. UNDP may

have some funding to contribute for the use of Internet as a development tool."

"Internet will [also] be very interesting for e-mail, news and the World Wide

Web, even computer games," says Xavier Lalanne, Director of World Mail, a provider

of e-mail and web-page hosting services.

Despite these uses, however, Internet will most likely not be attractive for commercial

end-users, some observers believe.

Lalanne explains: "Suppose an import-export company in Cambodia advertises on

the Internet. How can a customer buy its products? There are no credit cards [in

Cambodia], and [bank] transfers take 1-3 weeks."

If commercial end-users do not find Internet to be an attractive marketing tool,

it may not be self-sustainable in a future without substantial government or NGO

subsidies.

Providing Internet is expensive. The satellite connection between MPTC and Singapore,

plus related expenses, costs more than $12,500 a month.

Then there is the hardware which costs $60,000, and operational expenses, including

telecommunication and staff costs, which will run $20,000 a month, explains Herod.

To subsidize these expenses, IDRC awarded a grant to LIDEE Khmer's Public Internet

Project. The grant will be used to equip, operate, and maintain the Kingdom's first

Internet node at MPTC and to support the Public Access Point at LIDEE Khmer's office.

Because IDRC/LIDEE Khmer wants Internet to be sustainable after several years, it

plans to charge a fee for commercial users. This is where it will eventually compete

with Telstra. However, the telecommunications company will most likely use its technology

to offer a higher band width that will quicken the rate of data transmission.

End-user fees will likely defray only a portion of these expenses.

The potential number of end-users is around 1,000, according to Lalanne. This figure

includes 500 end-users who currently use commercial and not-for-profit e-mail services,

and another 500 of NGOs and international organizations which may use Internet as

an inter-organization communications tool.

Kim Sea expects 500-1,000 Internet users the first year. Herod suggests a more cautious

figure of 500 after five years, and Telstra wouldn't venture an estimate.

Cambodia's poverty and poor infrastructure may constrain the growth of Internet.

In a country where the land lines are of poor quality, telephone circuits are often

busy, and a modem can cost more than the monthly wage of a government employee, the

growth of computer sales - and consequently Internet - seems limited.

Lalanne disagrees. "It's not crazy to have Internet if you look at the handphone

market. Cambodia's per capita GNP doesn't justify six mobile telephone companies,

but there are about 15,000 handphones, each costing several thousand dollars out

there."

Internet will doubtlessly offer diverting entertainment and be an exciting research

tool. The small size of the potential market and doubts about its commercial viability

over the long-term, however, may mean that providing Internet will be like sending

money into cyberspace.