Conflict between two phone operators has yet to be solved and Beeline is still the subject of a $2.5 million suit currently before Phnom Penh Municipal Court- $1.5million in damages and $1million compensation to Mobitel.

Beeline’s General Director- Gael Campan, said that the relation between the two phone operators were back to normal after Mobitel filed a lawsuit against Beeline last year.

The loan covers the Royal Group’s November purchase of Luxembourg-based Millicom International Cellular SA’s network operations in the Kingdom for $346 million. The acquisitions included a 58.4 percent holding in Mobitel, Royal Telecom International Co Ltd and Cambodia Broadcasting Service Co Ltd.

The debt-leveraged deal is thought to have given the Royal Group 100 percent ownership of Mobitel in an agreement lead-arranged by ANZ bank.

The loan also refinances debt, including a $100 million loan arranged by International Finance Corporation in 2008.

Royal Group Chief Financial Officer Mark Hanna said Thursday that the loan sell down was “standard procedure” in the acquisition, “the biggest of its kind ever done in the region”.

Highlighting the fact that a Cambodian group was able to buy out a majority stake from a major international company, Hanna said: “It really increases the exposure that Cambodia gets.”

He added that the assets bought from Millicom form “a central part” of the Royal Group’s plans for the future.

A spokeswoman for ANZ, which is book-running and arranging the sell down together with Standard Bank, said via email from Singapore Thursday that the loan was put out for syndication on Monday.

Responses are due in the last week of April this year, she said. Lenders have been invited to join at five ticket levels, Reuters reported Thursday, paying interest of as much as 14.73 percent.

“According to Thomson Reuters LPC data, only eight syndicated loans have been completed in Cambodia, and this facility is the country’s biggest-ever corporate deal,” the ANZ spokeswoman added.

The Royal Group partnered global telecoms company Millicom for a total of 14 years.

After a strategic review of its South-East Asia assets, Millicom decided to sell its holding to its joint partner. On announcing the then prospective deal last August, Mikael Grahne, CEO of Millicom, said in a press release: “We are very proud of having played an important role in the development of the leading mobile operator in Cambodia and are very confident of the continued success of Mobitel and its people within the Royal Group.”

Millicom also approved the sale of its Laotian operations to Russia’s JSC Vimpel-Communications (VimpelCom) for $65 million. Moscow-based Vimpelcom is the parent company of Beeline, the newest entrant to Cambodia’s crowded market for mobile-phone service. It announced last week that it had garnered more than 370,000 active subscribers in the Kingdom since its launch last May.

Last week, Huawei Technologies, China’s largest private hi-tech enterprise, signed a $200 million cooperation agreement with Mobitel to extend its network.

Source: The Phnom Penh Post

By Sunday, all nine mobile phone companies had raised their per-minute rates to meet a standard cost mandated by the ministries of Finance and of Telecommunications, which they said was necessary to prevent a price war.

Costs for Cambodian consumers is now $0.05 to $0.06 per minute, a jump from some of the promotional offers of newer phone companies, some as low as nothing.

Analysts say the ministerial directive is contrary to the investment law and the policies of a free economy, but they are not willing to push further to learn how it might impact consumers and the market.

“If you speak against something, you will be considered as an attacker from an opposition party,” said Chan Sophal, head of the Cambodian Economic Association, an organization of 60 economists. “The bad environment makes these intellectuals not brave enough express themselves.”

Some 500 Cambodian economists can be find working at government institutions, in civil society and for international finance agencies. But few ever seek to intervene in government economic policies, unlike economists in neighboring countries like Thailand and Vietnam.

Chan Sophal said the government is not open to comments on its economic policies. The telecom price floor, for example, was implemented silently, and only by ministry officials, without public debate, he said.

“As independent economists, we want to provice recommendations,” said Chheng Kimlong, an economics professor at the University of Cambodia. “But we can only talk and our suggestions will not be considered.”

“Especially, the Ministry of Posts and Telecommunications was known to be careless of other suggestions, but they will issue any directive without accepting any recommendations,” he said.

Government officials reject such accusations.

Telecom Minister So Khun said his ministry had consulted with “many” experts before issuing the directive, though he would not elaborate or name them.

“We welcome all [suggestions], but we can’t answer whether the suggestions can be considered positive or negative,” he said. “My team will check and tell them what to do.”

Thun Saray, president of the rights group Adhoc, said the government remains prickly in the face of criticism from independent organizations—a disservice to economic development.

Ros Khemara, another member with the Cambodian Economic Association, said that in order to be professional, economists should make sure they extensively research. This is hard to do, he said, if they know their results will be ignored by the government.

Business lawyers, too, can find the environment challenging, said Ly Tay Seng, president of HBS Law Firm and Consultants.

“There are not many lawyers who want to express their opinion against the government, because they are worried it will impact their business,” he said.

Source: VOA Khmer

Nguyen Duy Tho was quoted by the Post as saying that “currently, we are testing 3G to prepare for an official launching of this service in 2010.”

Nguyen Duy Tho gave Viettel’s ambitious targets for Cambodia in the longer term. The Vietnamese operator is aiming to capture 40 percent of the overall mobile market, 80 percent of the broadband Internet market and 80 percent of the telecoms landline market, the paper continued.

So far, there are 9 mobile service providers operating in the Kingdom of Cambodia with some newer entrants to Cambodia’s telecoms market. The increasingly competitive phone market remain tight-tipped about the pricing rules which was set a minimum traffic charge for calls within network and calls across networks.

Leading phone service operator MobiTel and Russian Phone Company, Beeline accused each other of selling below cost price and blocking interconnectivity in September.

Minister of Posts and Telecommunications, So Khun, said that the government will suspend the license of any phone operators that violate the minimum tariff set by the edit, adding that “we offered free-market principles, but operators kept having feuds with one another, so the government needs to intervene it.”

Without the directive “violators will exploit the other companies with their prices,” said So Khun.

Simon Perkins, chief executive officer of Hello, one of the top four operators by users and an early entrant to the sector, has long been a supporter of minimum pricing and said that stability in the sector will enable operators to return to investing in network expansion and quality improvements, The Phnom Penh Post quoted as saying.

Sources within Mobitel, Hello and Metfone say new competitors have been unfairly benefiting from the infrastructure investments made by older operators, and have been able to offer cheaper services due to lower maintenance fees and equipment costs, reported the Post.

The Cambodia Daily quoted said Simon Perkins as saying that this is a measure that MPTC has had to do because there are no competition laws.” Hello, unlike several other competitors, doesn’t offer free call promotions. He said that Hello could benefit from the directive as some companies raise their prices but that this will depend on the enforcement of the law.

Following the pricing war between phone operators, the government analyzed the cost and profit information submitted by nine mobile phone firms.

Metfone Managing Director Nguyen Duy Tho was quoted by the Post as saying that the Vietnam-backed service provider, which is competing with market leader Mobitel for top spot among the Kingdom’s operators, was unfazed by the new rules.

Hello, third mobile phone service provider, had became the first phone operator to offer the Blackberry in Cambodia’s phone market after launching RIM’s 2G handsets Pearl 8120 and Curve 8320 on April 2009. There were nearly 1,000 two handsets sold since launching.

Hello’s Chief Executive Officer Simon Perkins was quoted by the Post as saying that the 2G Blackberries “have been a surprising success for us – we didn’t know the corporate market was that big,” adding that “we’ve created a niche.”

Blackberry is not popular amongst Cambodia’s phone users because its price is more expensive than other phone brands. The users who afford Blackberry are businessmen. Most of ordinary people like using cell phone made in China with low price. Nokia series are the leading brand in Cambodia.

Following the launch of 2G Blackberry, Phone operator, Hello, launched its 3G Blackberry service on July 23, 2009.

Speaking at the launch, Perkins said that Hello imported only 200 Bold handsets of Blackberry and that another 1,000 were passing through Cambodian customs following importation from Canada.

Gary Foo, Hello’s Brand Manager, said that this model is very popular worldwide, it not the most popular of the Blackberry smart phone range of products. He added that the company sells the Bold handsets for US$68 a month as part of a two-year Blackberry service contract.

On October 26, Hello dropped the entry price of its BlackBerries from US$68 per month to $41 per month, and allowed existing BlackBerry owners to sign up to a Hello plan without having to purchase a handset, according to the Post.

MobiTel, Cambodia’s leading mobile-phone service provider with 55 percent market share, will plan to launch Blackberry service this year. It will become the second phone operator to offer RIM’s Blackberry in Cambodia.

Mark Hanna, chief financial officer of Royal Group, which owns a 38.4 percent share in Mobitel, said 3G Blackberries would be launched in the fourth quarter, reported the Post.

According to Tuesday’s announcement, MobiTel, CEO Jeffrey Noble, said that “mobile connectivity is becoming more and more important to mobile users in Cambodia and we’re very pleased to be working with RIM.”

Leading mobile phone service provider, MobiTel, last month accused Russian phone firm, Beeline, of giving below cost calls and of the irresponsible business practice of price dumping. And Beeline accused MobiTel of blocking calling within interconnectivities.

“The Royal Government will take strict action against any telecommunications operator who does not respect this order and still continue to block cross network connections or competes dishonestly leading to chaos in Cambodia’s telecommunications market,” read the premier’s letter.

So far, there are 9 phone operators with more than 4 million users in Cambodia’s phone market.

It is the third government intervention in the last month for concerning pricing and interconnection issues in the telecoms sector.

Minister of Economy and Finance Keat Chhon and Minister of Posts and Telecommunications So Khun issued a letter dated September 29 ordering the phone companies to stop any unfair promotions or interconnection problems that could bring crisis to the telecoms industry.

In order to facilitate its users, Smart Mobile recently launched Roaming Service for its users who are using Smart.Corporate postpaid tariffs. All subscribers using this service are able to connect with any countries by making calls and sending SMS while they are traveling abroad.

Most of phone companies have already set up Roaming service for phone’s users to be easy to make phone calling and text message while using it abroad.

For Smart Mobile’s users, they can receive an SMS free of charge but sending message will be charged 50 cents, it is no matter in which country the subscribers actually is. By the way, receiving a call will be charged US$1 per minute in most of the countries.

Smart Mobile Company entered Cambodia’s phone market on October of last year. So far, it is extending its network coverage across the country, by covering 11 provinces.

“In Cambodian’s competitive market we aim to offer always the most attractive tariff rates, whether it is calling to other Smart Mobile subscribers, to other operators in Cambodia, for making international calls or for sending SMS or making calls while abroad. To stay connected wherever you are, in particular also during travel for business or leisure is becoming in a globalized world more and more important! We see more and more Cambodian’s to travel outside of Cambodia, especially for business purposes. The launch of our Roaming service is another commitment to serve our customers to their full satisfaction and to use the favorable services and tariffs of Smart Mobile anytime and anywhere,” Mr. Thomas Hundt, Smart Mobile’s CEO, said in the statement.

“We are working every day to ensure that our subscribers can enjoy our service anytime, anywhere in Phnom Penh, in provinces and now also outside the country,” added he.

By the growth of telecoms sector, so far, there are more than 4 million of phone users, and less than US$ 30 million the State earned per year. Nine mobile phone operators are running in Cambodia’s phone market, which MobiTel held a 55 percent of market share at the end of last year.

Mobile service provider Smart Mobile (093/010) entered within the Cambodian telecoms market with a world-class team of telecommunications experts offering experience from across Cambodia and across the globe.

From today on, Smart Mobile’s subscribers will be able to recharge their cell phone balance through ACLEDA’s ATMs throughout the country 24 hours a day and 7 days a week without any service charge. The Phone operator setting up this new service is to make it easier for phone’s users to recharge the mobile phone balance.

According to the statement, in the near future top-up through ATM will be available at other banks as well.

Kiril Mankovsky, Smart Mobile’s Chief Marketing Officer, was quoted by the Post as saying that “Smart Mobile was in the final stage of negotiations with other banks in the Kingdom, but that it was not ready to make any formal announcements until the deals are signed.”

The easy instruction for recharging phone balance is following:

• Insert bank’s ATM card into ATM machine
• Select language, Insert 6-digit PIN
• Select transaction type mobile phone recharge
• Select Smart Mobile
• Select account type
• Select recharge amount
• Take your receipt on which a serial number for recharging your Smart Mobile phone balance printed out
• Enter the serial number into your mobile phone correctly, and the amount you selected will be added to your phone balance immediately.

On the other hand, all Smart Mobile’s users can top up their accounts with scratch cards sold everywhere, and also use WING’s card, which the phone provider has already signed a deal with ANZ bank’s WING to offer electronic top-up. The system would be based on a pin-code access service to add to the scratch card credit system offered by Smart Mobile.

The pricing war between mobile phone firms occurred in the ongoing several months. Leading mobile phone service provider, MobiTel, strongly criticized newest competitor ‘Beeline’ of irresponsible business practices because the company has charged customers only 5 cent a minute for calls between networks after Beeline launched ‘Boom’ tariff. And then MobiTel also refused to continue the process of the cross-network connectivity.

In responding, Beeline announced the full-page ads in local newspapers saying that “contrary to media speculation” it had met its obligations of the agreement- which also required MobiTel to stop blocking cross-network connectivity, by stop taking new users on its “Boom” tariff from September 01.

Other phone service providers, however, also said that in keeping pricing at $0.05 per minute for existing customers on the controversial “Boom” tariff “forever”, Beeline had effectively failed to abide by its agreement.

Russian Telco Vimpelcom Group, which runs Cambodia’s newest mobile operator Beeline through local subsidiary Sotelco, saw its shares reach their highest level this year at US$19.05 by the end of trading on Nasadaq exchange in New York.

MobiTel held a 55 percent share of the phone market at the end of last year while Axiata’s Hello, the No 3 operator, had a 15 percent market share.

Five mobile phone operators, including MobiTel, Hello, Smart Mobile, qb and Mfone sent letter dated September 3 to the Ministry of Posts and Telecommunications (MPTCO) requesting urgent action, by accusing Beeline of violating an August 14 promise to raise cross network tariff from US0.05 to $0.06 per minute.

“The issue of Beeline’s cross-network pricing had concerned most of the sector – as had blocked interconnectivity – but that it was still unclear what legal redress could be used in Cambodia’s increasingly competitive and complex mobile sector,” the Phnom Post quoted Smart Mobile’s CEO Thomas Hundt as saying.

In order to handle the ongoing dispute between mobile operators MobiTel and Beeline firms over alleged price-dumping and blocking of interconnection, Ministry of Posts have created a temporary task force chaired by Secretary of State Sarak Khan.

Telecommunication sector has experienced quick growth, particularly in the mobile phone field, where there are more than 4 million of phone’s users so far. And the state earns not less than US$30 million per year.

Opposition party’s lawmaker, Son Chhay, sent September 14 letter, signed off by President of National Assembly, to the Minister of Post and Telecommunication demanding an explanation of the ongoing battle between telecom firms, MobiTel and Beeline. He also said that some officials of the ministries of Telecommunications and Finance protect the business of companies and possible personal interests in the telecom sector.

At the present, there are nine licensed mobile phone companies (Mobitel, Mfone, Hello, Starcell, qb, Viettel, Smart Mobile, Excell and Beeline) and three table mobile phone companies in Cambodia (Telecom Cambodia, Camshin, and Cammintel of the State).

At the mean time, people also expressed fear that mobile phone towers set up on high-rise building or on the ground cause health problems such as headache, causing infertility. Especially, they are afraid that during rainy season, those towers attract lightening.

In answering to the concerned issues, Workshop about “mobile phone technology and its effects” was held by the Ministry of Post and Telecommunications. Experts from different telecommunication companies participating in the workshop confirmed that when setting mobile phone tower systems, each company always sets up lightening rods, devices against lightening strikes, and the effect on the people is minimal.

Beeline is the first mobile operator in Cambodia to offer the “GPRS without setting” service which will be available to all its subscribers and they can enjoy using the internet and receive calls without interruption at the same time.

In the last few months, Minister of Information announced that all advertising platforms from billboard to newspapers stop the dissemination of mobile phone advertisement that prompt clients to use and talk by phone for a long time because of the large numbers of mobile phone advertisements. By the way, the statement read “the content of these advertisements are concerning parents that their children do not have enough time to study.”