Government tells telcos off

The Telecommunication Regulator of Cambodia (TRC) of the Ministry of Posts and Telecommunications issued warning letters to mobile operators Beeline and Smart over their recent advertisement, stating it violates the Inter-Ministerial Prakas, or edict, signed in 2009.

The separate letters, obtained by the Post last week, were approved by TRC’s president Mao Chakrya on March 1, stating that the companies did not comply with Inter-Ministerial Prakas number 232 dated December 7, 2009.

According to the letters sent individually to the CEO of Sotelco, subsidiary of Beeline’s parent company VimpelCom, and the CEO of Latelz, which operates Smart, the Beeline’s Pdo Prak (exchange) promotion and Smart’s Xchange promotion violate the regulation.

According the TRC, these promotions offered unfair in-network rates, such as Smart’s $2 worth of calls for $30 and Beeline’s $2 worth for $50. 

“Your advertisement is against this Inter-Ministerial Prakas,” the letters to both companies said.

“Regarding to this issue, TRC would like to request your company to comply with the issued Prakas and stop immediately such advertisement,” the letter said. “If there is no amendment on the Inter-ministrial Prakas No 232 dated 07 December 2009, your company shall comply with it, or TRC will take measure,” it said.

Thomas Hundt, CEO of Smart declined to comment on the phone on that matter on Thursday. However, he wrote in an email yesterday that Smart sought to offer customers an attractive deal.

“Smart strives, for the benefit of the consumers but also for the benefit of the economic development of Cambodia, to offer highly attractive rates, bundles and packages; we strive to connect people.”

Beeline Commercial Director Ashraf Mokhtar Sahab could not be reached for comment yesterday. When asked on Thursday if Beeline offered similar types of top up promotions to its customers, he told the Post: “We had an offer based on similar concept but we stopped it.”

TRC’s Chakrya declined to comment yesterday.

An oversupply of providers in Cambodia’s telco market has contributed to price dumping, experts say.

Anthony Galliano, CEO of Cambodian Investment Management, told the Post in February that “too many licences were awarded, creating an oversupply of operators, relentless competition, and ultimately unsustainable businesses models.”

In response to price disputes and to set minimum tariffs, the Ministry of Economy and Finance and the Ministry of Posts and Telecommunications signed the Inter-Ministerial Prakas No 232 on Minimum Tariffs of Mobile and Fixed Telephone Services and Interconnection Fees in December 2009.

In paragraph one of article 4, the edict states that “minimum tariff of calls within one network shall be 4.5 cents per minute.” Later on the Prakas also says: “advertisings on on-net tariff must not be lower than 50 per cent of the tariff contained in Paragraph 1 of Article 4.”

In 2010, the Post reported that Beeline annouunced it had raised prices after a price-dumping dispute to comply with the edicts set up by the government.

In September 2009, the Post reported that Mobitel had filed a lawsuit against Beeline for alleged “dishonest competition” and for using the market leader’s prefixes without permission.

Mobitel’s accusations related to what it had termed unfair competition from Beeline’s “Boom” tariff that offered customers cross-network calls at five cents per minute, the report said. Mobitel and other competitors said the cost of the call was, in reality, higher and accused Beeline of price-dumping.