By Ros Sothea, VOA Khmer
Original report from Phnom Penh
05 January 2010
Mobile phone companies have begun adjusting their rates in accordance to a government order that puts a price floor on the increasingly competitive industry.
Star-Cell 098, for example, had been running a promotion that offered call rates between $0.01 and $0.02 per minute, but since Dec. 22, the company has raised its rates by more than $0.05.
“We ended the promotion,” a customer service representative told VOA Khmer. “The previous price did not adhere to the directive of the ministries. From now on it’s $0.05 for internal calls and $0.07 for external calls.”
Economic analysts have said the new directive will hurt competition and favor larger mobile phone companies, but officials say they had no choice but to intervene in what had become a prolonged price war.
“The new tariff makes clients complain a lot, but we have to respect the ministries,” said Yuth Srey Noch, a customer service representative for Excell 018, which had relied heavily on low rates to increase its customer base.
The company will also drop a promotion that offered free calls for a base rate of $3 per month, a strategy that had “helped the company in competitiveness,” Yuth Srey Noch said.
The directive, issued by the telecom and finance ministries in early December, requires minimum rates of $0.045 for calls made within a network and $0.0595 for calls outside a network.
Mobitel, which has the country’s widest network, maintains prices between $0.07 and $0.10 per minute.
Now other phone companies will have to consider new rate plans. Beeline 090, Cube 013, Hello 016, Mfone 011 and Smart 010 had the lowest rates, sometimes charged less than $0.01 per minute.
Kiril Manuski, marketing manager for Smart 010, said the directive would hurt the company’s competitiveness, but representatives were continuing negotiations with the Ministry of Posts and Telecommunications to find a new, appropriate rate.
Customers ranging from students to government staff, NGO workers to laborers, say they lose out with the new directive.
“I have to save and cut off some duration of calls,” said a Phnom Penh student.
“It will not be easy for me when the tariff goes up, because I have to shorten calls, and I will have to meet people face to face instead of calling them,” said a businessman who transports goods from Phnom Penh to Prey Veng province.
Investors, meanwhile, will add the price of calls to their lists of complaints, which includes high prices for water and electricity and poor infrastructure, all of which make running businesses in Cambodia difficult.
“Investors must care about the price for telephone calls,” said Mao Savin, a business adviser for Emerging Market Consulting.
Telecom Minister So Khun said the new price was carefully considered and “will not affect” the telecommunications industry.
Cambodia has the highest telecom rates in Asean, which “discourages” foreign investment, according to the UNDP. (In Vietnam and Thailand, rates are lower than $0.03 a minute.)
“The government should not follow a private company to make an affect on the common interest,” said Van Sou Ieng, president of the Garment Manufacturers Association of Cambodia. “On the contrary, the government must allow competition to lower the tariff, which is part of Cambodian competitiveness, to attract investors.”
Cambodia has an estimated 4 million phone owners, but it also has 30 percent of its population living on less than a dollar a day.
Meanwhile, taxes on the nine mobile phone companies add up to around $30 million a year in revenue for the government.
Ou Bunlong, secretary of state for the Ministry of Economy and Finance, said the government will earn more from the higher call rates. The ministry was not yet sure whether the new directive will always be positive and will review the policy after its first two months, he said.
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