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Cambodian telecom must ring changes
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843 words
26 February 1996
Asia Times
(c) 1996 Chamber World Network International Ltd

The first hurdle when looking into Cambodia's telecommunications market is trying to reach anyone by phone. Very quickly, the standard messages - "the number you are trying to reach cannot be connected", "all lines to the number you are calling are busy", "the number you are calling is out of service" - ring in one's ears with the insistence of a broken record.

Phone systems in Cambodia, often described as overloaded, oversupplied and overpriced, display the need to leap-frog decades of neglect and decay.

The aid and development crew that flooded the country to support a United Nations-backed peace effort in the early 1990s needed phones and needed them fast. Short of the time and money to lay cost-effective land lines, the government licensed three mobile operators and one wireless operator. Between them, they dwarf the country's 8,000 conventional phone lines.

"Usually, for every 100 fixed lines, you have eight or 10 mobiles. In Cambodia we have 180 mobiles for every 100 fixed lines," said Peter Booth, senior adviser to the Ministry of Post and Telecommunications of Cambodia.

But even a high ratio of mobiles does not make for a large market in a country of just nine million people. "It doesn't take a Rhodes Scholar to work out that this is a small country and that there are a lot of operators. It's ludicrous. I don't know how they survive," said one industry executive. Neighboring Thailand, with more than six times the population, has just two operators.

Things may well get more crowded. The Undersecretary of State at the Tele communications Ministry, Koy Kim Sea, said he expected a fourth mobile network, the first using digital technology, to be licensed by May, despite opposition from many within the industry.

Most can't see what attraction the already overstocked market could possibly hold for yet another operator. "You have this small amount of food and then you bring in so many people to eat it. It is a real difficulty," said Anil Chandra Adhikari, general manager of Cambodia Mobile Telephone Company. Camtel, as the company is known, was the first to be licensed, setting up in Cambodia in 1992. A joint venture between the telecom ministry and Thailand's Charoen Pokphand Group, the company has yet to turn a profit, according to Adhikari.

Another Thai joint venture, Cambodia Samart Communication Company, said it crawled into the black in 1994. The only operator to provide coverage outside the capital, Samart has about 8,000 subscribers - some 60 percent of the total market. Its provincial expansion has racked total investment up to around US$10 million, and the company expects to put another US$2.5 million into upgrading Phnom Penh services this year.

But mobiles are expensive - if you make more than three local calls a day you are better off with a land line, without even counting the US$1,000 cost of the mobile handset. As they become available, people will start to use fixed lines rather than mobiles, although those that have already bought walkabout phones are unlikely to give them up completely. "In the long term (land lines) will eat in to our revenue in terms of air time," said Samart's general manager Teerachai Phongpanangam. In the short term, he expects to hook up between 4,000 and 5,000 new subscribers this year alone.

That will hardly make for fewer frayed tempers in Cambodia. Although the mobile operators say they have invested more than enough to handle call volume even at the busiest hours, experience would suggest their assessment is over-optimistic. By international standards, failing to get through one time in 20 counts as sloppy service.

In Cambodia between 8.30 and 9.30 in the morning, the country's busiest time for calls, it is not uncommon to dial a number seven or eight times before getting a connection.

Advisers to the ministry, which has just finished work on a 15-year master-plan for the industry, estimate that an extra US$5 million put in to the mobile networks would improve service quality substantially, but with the stiff competition only the strongest will be able to invest.

The mad rush to get Cambodia on the phone has led to a hotch-potch of different systems, which don't necessarily get along very happily. "The systems are all compatible, but only after we make adjustments. This complicates the network, especially when it comes to expansion plans," said the ministry's Koy Kim Sea.

The international community has added to the problem. Various countries have come up with grants to help Cambodia develop its telecommunications.

But since a majority of aid is used to support developed nations' own businesses, the money comes with strings attached.

Since Cambodia is in no position to borrow huge sums for infrastructural investment, the field is likely to be left open for the private sector.

Copyright 1996 Asia Times.

(c) 1996 Chamber World Network International Ltd.

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