A quantum leap for Cambodia’s telcos

As mobile phone penetration increases, the proliferation of phone shops follows suit.
As mobile phone penetration increases, the proliferation of phone shops follows suit. Hong Menea

A quantum leap for Cambodia’s telcos

As in the rest of the world, everyday Cambodian life is dominated by the use of smartphones, with consumers glued to social media, streaming videos and staying up-to-date with the latest breaking news and spreading viral content.

This, in large part, has been fuelled by the rapid development of a highly competitive telecommunications industry that continues to fight for market share while aiming to provide affordable data coverage that reaches nearly every inch of the Kingdom.

According to the latest findings from the Asia Foundation, internet and voice services are beginning to reach a saturation point, with 96 percent of Cambodians claiming to have access to a mobile phone last year – and some 48 percent of these owning at least one smartphone.

But after starting from scratch some 25 years ago – when landlines were few, mobile phone access was nearly non-existent, and dial-up connections to the internet required almost no infrastructure – it has been a hard-fought battle to lay the network needed for the rapid leapfrog the industry has taken. While connectivity slowly developed over the decades, the growing pains for the telecommunications industry are widely seen to have begun in 2012, when massive price wars led to a string of losses and insolvencies in an overcrowded market.

Now, Cambodia has just three large mobile network operators – Smart, Metfone and Cellcard – and three smaller operators – QB, Seatel and Cootel – all six of which are currently engaged in a renewed price war that has led to questions to the industry’s future sustainability.

Despite the telecommunications industry being a multi-million dollar sector, the investment needed to continue growth and expand the speed of coverage comes with a hefty price tag. And it appears, with monthly data service costing, as one industry expert put it, “less than a price of a Starbucks coffee”, operators are undaunted in rolling out large investments that vary from $75 million to $200 million annually to keep up with infrastructure demand.

But with Cambodia having a relatively small market of 16 million consumers, there is little doubt that in the near future the industry will once again undergo a period of consolidation. How this consolidation shakes out, however, is up for debate.

Some predict that telecommunications operators will start to snap up Internet service providers or partner with television broadcasting companies to bundle products. Others foresee smaller telecommunications companies eventually going bankrupt, freeing up highly coveted spectrum licences.

But the government’s enforcement of its laws, or lack thereof, remains at the crux of future development. If the price war continues without intervention, company revenues will start to slip, cutting off much-needed funds for investment. If the government does not begin to follow through with its promises to open up broadband frequencies for telecommunications operators, services will begin to lag or licence rights will eventually be so costly that companies will not invest.

And when it comes to taxes on operators, if the government does not clear up accusations that it allows for an unfair playing field, end consumers will eventually bear the brunt of an industry that could begin to decline, even as technological advancements continue to develop at lightning speed.

MOST VIEWED

  • Former opposition leader tells soldiers, Cambodians to unite to fight CPP

    Former Cambodia National Rescue Party (CNRP) President Sam Rainsy has called for a popular uprising after the July 29 national elections to force a change of government. He called on the armed forces and people to stand united to fight the ruling Cambodian People’s Party-led

  • Police warn boycott FB group involved in the “Clean Fingers Campaign”

    Police said on Tuesday that they will pick up members of a Facebook group involved in the “Clean Fingers Campaign” that promotes a boycott of next month’s national elections. However, police merely planned to “educate” the group for now, but warned that if the

  • Bun Heang mocks US, threatens its citizens in scathing open letter

    After being hit with sanctions from the US Department of Treasury, Cambodian General Hing Bun Heang said he would retaliate against any US national who does not respect his country’s sovereignty, has ambitions to invade Cambodia or incites “traitors” in the Kingdom to do

  • Court told to act against former opposition leader for insulting King

    Justice Minister Ang Vong Vathana has ordered the Phnom Penh Municipal Court prosecutor to begin legal proceedings against the Cambodia National Rescue Movement (CNRM) president, Sam Rainsy, for “insulting” the King, Ministry of Justice spokesman Chin Malin told The Post. The “insult” was determined after