Bypassing older technologies for higher tech options, Cambodian consumers are

rapidly reshaping the Kingdom's information technology market.

Because

only four out of every 1,000 Cambodians have access to a fixed-line phone, many

are "leapfrogging" to wireless Internet services as a cheaper, faster way to get

online.

Cambodia's landline penetration rate is just 0.42 percent, and

lags far behind Vietnam, where 32 percent of the population have land-line

access, said Australian telecom research group Paul Budde Communications in

their 2007 Telecoms, Mobile, and Broadband in Asia report.

Experts say

this is natural and not necessarily a disadvantage.

"Societies with no

legacy systems can go straight to the next level," said Kelly Hutchinson, deputy

director of external affairs for the Information and Communication Technology

Association of Cambodia (ICT-Cam). "Vietnam had a fixed-line telephone system,

Cambodia didn't, and it is now in a unique position regarding the telecoms

sector."

According to Hutchinson, Cambodia's lack of legacy

infrastructure has become a plus as the Kingdom can jump to cheaper, more

advanced, communications technology.

The Kingdom currently has 42,000

fixed-line subscribers, and Internet access has remained low and more expensive

than other countries in the region, said the Budde report.

"Until

recently Cambodia Internet was only really available through satellite," said

Javier Sola, coordinator of the Khmer Software Initiative at the Open Institute.

"Political issues have delayed things but at the end of last year [Cambodia's

fiber optic line] was finally connected to Vietnam. Fiber optic [lines] have

been on the Thai and Vietnamese border but they have not wanted to connect, [so]

we have not seen much lowering of prices. It is now happening, but very

slowly."

According to Anthony Galloway, founder of the website Expat

Advisory Services, the lack of fixed-line Internet services in Cambodia means

the market has moved straight to more advanced wireless Internet

services.

"The introduction of broadband wireless to Cambodia was cutting

edge in 2001 for the region," Galloway said. "CamGSM was the first to offer

wireless Internet with Telesurf, and now there are several Internet service

providers all offering wireless. Wireless growth will continue to stay in front

of fixed line options in Cambodia for some time to come."

Hutchinson

argues that Cambodia will now never need to install fixed-line infrastructure,

as it costs a lot more but it is not more reliable. Problems remain for

Cambodia's ICT industry, she added.

"The major challenge now is that we

are at a maximum level on the gateway [out of Cambodia]," said Hutchinson. "This

is where the government needs to make a significant investment."

Cambodia

lacks a "Universal Access Fund," a common way that governments tax telecoms

companies to ensure that ICT services are provided in rural and remote areas and

essential communal infrastructure is maintained and upgraded.

"I can't

see any other way of getting the funding to upgrade [Cambodia's gateway]

infrastructure [than a Universal Access Fund]," said Hutchinson. "[The current

gateway] is a bottleneck that is stopping the growth of Internet in

Cambodia."

While many new companies are offering ICT services in Phnom

Penh, much of the country is being left behind, said Sola.

"Real

connectivity is only happening in four or five cities," said Sola. "In two

thirds of the country there is almost zero Internet usage."

And within

Phnom Penh, increased competition has not made prices drop as fast as expected,

said Sola.

"Now you have companies like Angkor Net, but they are just not

strong enough to force Online [the market leader] to lower prices," he said.

"Online says it is just too expensive and they can't lower prices as it is too

small a market. But the market cannot develop if prices remain so high, you need

popular prices to develop a market."

Last year, Singapore-based Media

Ring launched Angkor Net in Cambodia. AngkorNet was the first ISP to offer

wireless broadband services, or WiMax.

WiMax is the latest wireless

technology. It can connect to the Internet at faster speeds and from longer

ranges than other wireless technology.

Consequently, Angkor Net is able

to offer broadband Internet speeds without installing expensive fixed-line

infrastructure. In theory, these savings could then be passed along to users,

boosting Internet take-up and increasing Internet penetration.

Angkor

Net now has 90 percent WiMax coverage in Phnom Penh and approximately 1,000

customers, said company spokesperson Sor Phea, who added that the company

currently cannot provide services in rural areas.

"Internet costs have to

go down drastically," said Sola. "You need it in public places, in schools, you

have to prepare Cambodia's students for ICT. In ten years everything will be ICT

- you will need to know ICT to get any job."