The great mobile shake-out

Mobile phone subscribers in Cambodia have had little to complain about in recent years. With six new operators entering the market since 2006, the result was oversaturation and an all-out price war as eight operators fought for a foothold in a country with fewer than 15 million people. … “Most of the telecom companies in Cambodia were backed by large, wealthy companies. The aim [at that point] became for operators to build up their subscriber bases and a pricing war was started,” said Atip Rittaporn, the former chief executive of the now-insolvent Thaicom Plc subsidiary Mfone. But that model was not sustainable for operators, who have to pay a revenue tax of 7-10% to the government as well as absorb high operating costs as revenues continued to dwindle. … Malaysia’s largest telecom company, Axiata Group Bhd, operating in Cambodia under the Hello banner, announced on Dec 13 that it had agreed in principle to acquire the local operator Latelz Co Ltd in a deal worth $155 million. Lawsuit-plagued Mfone declared only a few weeks later that it was insolvent, having to liquidate all its subscribers to former competitor MobiTel. … Simon Perkins, chief executive of Hello Axiata, said Hello’s acquisition of Latelz, which operated as Smart in Cambodia, would allow his company to double its network coverage as well as give it enough total subscribers to become the second largest operator behind CamGSM’s MobiTel. … Indeed, mobile operators have skipped out on paying hundreds of thousands of dollars owed to one another in interconnection fees. Such was the case in July when Hello, Smart and Vietnamese-owned Viettel (Cambodia) Pte filed several complaints to the government claiming that CamGSM, which operates under the MobiTel brand, owed them collectively more than $1.5 million. …

http://www.bangkokpost.com/business/telecom/334187/the-great-mobile-shake-out