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Internet prices set to slide

Internet prices set to slide


Poor connections and high prices have long frustrated Cambodia’s internet users, but that is about to change, writes Anne-Laure Porée, who takes a look at how competition among internet service providers and the arrival of new technologies could bring faster and cheaper internet access.


The question on the mind of every internet user in Cambodia is “Why is it so expensive?” The answer, according to internet service providers (ISPs), is simple: it’s a matter of supply and demand.

As with any other service or product in demand, the greater the limitations on availability, the more expensive it will be.

One of the main factors preventing greater internet use is a limited number of landlines, said Chum Sirath, the managing director of Net I Solution Co., who has years of experience in the country’s telecommunications sector, including as an executive with Alcatel, which installed Cambodia’s first fiber optic cable.

Sirath said the lack of a regulatory authority was also hampering growth because the absence of a level playing field was deterring the entry of new players into the sector.

And executives at ISPs all agreed that the fees charged by Telecom Cambodia were too high.

All of them told of writing in vain to Telecom Cambodia to request lower fees.

They said Telecom Cambodia charges a minimum fee of $20 a month for access to landlines and the ISPs have no alternative but to pass on this cost to their customers.

This was why most ISP customers are businesses rather than private users, they said.

But aspiring ISP customers can be hopeful of lower prices because of the availability in Cambodia of a range of connection options: satellites – which are very expensive and used by ISPs as a backup – fiber optic cables, landlines and wireless.

Projects underway

The unavoidable opening to competition is beginning to benefit consumers.

One of the most promising developments involves fiber optic cables. A project has been launched in the south of the country to install a fiber optic link from Kampong Cham to Sihanoukville through Phnom Penh.

The project, supported by the Japan Bank for International Cooperation, comes within the scope of plans adopted by the six countries comprising the Greater Mekong Subregion – Cambodia, Vietnam, Thailand Laos, Myanmar and China – which in July 2005 signed an MoU to cooperate in planning and installing an “information superhighway.”

Vietnamese company Viettel is also installing a fiber optic network, which will link Siem Reap with the south.

“We are focusing on the Tonle Sap area, where we will complete our work by the end of 2008,” said Viettel’s vice director, Sroy Sopanha.

“We would like to open two more links with Vietnam but we need the agreement of both governments,” he said.

In Phnom Penh, a fiber optic network is being installed by Chinese company CFOC.

Competition heats up

These infrastructure projects are good news for the future growth of the ISP sector in Cambodia, which currently has about 14 operators.

They include AngkorNet, which plans to focus on expanding its operations in cities “where many customers can use the internet,” said Sok Channda, the company’s president and CEO who has 10 years experience in IT in Cambodia as the owner of Anana Computer.

“[This] month we will be in Siem Reap, Kampong Cham and Kampong Som,” she said.

Citylink chief executive Rotha Chhay said his company’s growth strategy is focused on providing cheap overseas phone calls through VoIP (voice over internet protocol), while Online says it wants to concentrate on using Wi-Fi to reduce fee costs and attract more private users.

Online CEO Tho Da predicted that more and more consumers will have both an internet connection at home and a mobile phone.

He also downplayed the prospect of competition between ISPs and mobile phone companies offering a 3G service, which provides an internet connection.

But some in the industry dispute this, saying mobile phone companies with their own transmission antennas will be able to offer lower prices than landlines.

They also note that some ISPs are focusing heavily on wireless connections.

One IT expert said the choices facing Cambodia were similar to those that confronted Eastern Europe in the early 1990s, when landline networks in the region were weak.

“Instead of installing fiber optic cables, those countries chose to develop a wireless network,” he said.

But that is an option Sirath of Net I Solution opposes, partly because he says wireless technology is not as reliable as phone connections.

Beyond considering the stability of the system, he said the phone network in Cambodia is based entirely on mobile phones.

“Sooner or later mobile phone operators should share their equipment, if the government encourages them to do so,” Sirath said. “Then prices should drop.” 


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