Govt sets up task force to solve telecoms feud

Photo by: Sovan Philong
Vendors advertise the mobile industry's increasingly competitive tariffs Monday on a street in Phnom Penh.

The Phnom Penh Post
Wednesday, 09 September 2009 15:01 Ith Sothoeuth and Steve Finch

MPTC says new initiative will immediately address dispute between Mobitel and Beeline as well as plug legal loopholes

OFFICIALS at the Ministry of Posts and Telecommunications (MPTC) told the Post Tuesday that they have created a temporary task force to address the ongoing dispute between mobile operators Mobitel and Beeline over alleged price-dumping and blocking of competing networks.

Minister So Khun instructed the head of the new body, Sarak Khan, secretary of state at MPTC, about the initiative Tuesday morning, the Post was told, after a meeting on August 14 between the two operators, the government, Telecom Cambodia and the rest of the sector failed to resolve the feud.

In last month's meeting, Beeline agreed to raise its cross-network tariffs from US$0.05 per minute to $0.06 by September 1, according to an MPTC letter sent to all operators. In return, Mobitel had been asked to cease blocking calls from Beeline's network.

However, Mobitel - as well as Hello and Smart Mobile - have said this week 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. The Moscow-based operator stopped taking new customers on the tariff as of the September 1 deadline.

"We have created a task force to deal overall with pricing," So Khun said. "The task force will begin operations as of now."

Details on the proposed plans of the ministry remained unclear Tuesday, but task force head Sarak Khan said his team would draft a code of conduct that would likely be made into a sub-decree or prakas (edict).

The process would be separate from the ongoing drafting of the Telecommunications Law, he added, and had become necessary to plug a gap in current regulations as a result of the dispute. It would continue to contribute to regulation of the sector once the law is passed, he said.

"We will draft a standard for them [mobile operators]," Sarak Khan said. "After we have agreed ... we will meet with mobile operators."

Beeline and Mobitel would be given a further opportunity to make their case, he said, which also includes allegations against Beeline that it used Mobitel's prefixes "illegally".

"We will allow Beeline to defend itself as to why it set this type of [pricing] policy," Sarak Khan said. "We are the authority.... We can't tell them to set certain prices, but we can help prevent the breaking of other companies to gain market share."

Beeline General Director Gael Campan said Tuesday afternoon he remained unaware of the new task force.

Mark Hanna, chief financial officer of Royal Group, which has agreed to complete the full acquisition of Mobitel from Millicom International for $346 million, did not say whether he had been made aware of the initiatve Tuesday, but noted that there would be further action from the market leader.

"We have not officially complained to the regulator.... [We] will be coordinating our response with other operators," he said by email.

Smart Mobile CEO Thomas Hundt said that 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.

"It is not clear to us, and I think to everyone in the market, under which legal basis those aspects [pricing and interconnectivity] can be regulated," he said. "This is also causing a little bit of a [legal] vacuum in this discussion."