Telecom law delayed over finance proviso

Photo by: Sovan Philong
Mobile-phone vendors sell phones and SIM cards on a street in Phnom Penh.

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We are now waiting for the final decision from the Council of Ministers.
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The Phnom Penh Post
Tuesday, 04 August 2009
Ith Sothoeuth and Steve Finch

Authorities say Ministry of Finance objected to telecom regulator’s role as financial watchdog

THE Ministry of Posts and Telecommunications on Monday chalked up delays in the implementation of a long-awaited telecom law to disagreements over the handling of finances from the sector, citing a draft of the legislation published earlier this year.

Article 8 of a draft of the law published on June 5 states that the future telecommunications regulator - which would be created as part of new legislation - would be "autonomous in checking and controlling ... financially in installing, operating, supplying and using network and telecommunications services".

However, La Narath, a secretary of state at the ministry, said the Ministry of Economy and Finance had objected to the wording - the disagreement, he added, had been resolved after a meeting between both ministries.

"We just deleted the word 'financially' ... only this one word; besides that, [the draft] was OK," he said. "We are now waiting for the final decision from the Council of Ministers."

Council spokesman Phay Siphan said in June that consultations with various ministries were being held "to make sure the law is in harmony with relevant ministries".

He was unavailable for further comment Monday on the progress of the legislation. The Ministry of Economy and Finance was also unavailable.

Regulatory powers
Minister of Posts and Telecommunications So Khun said Monday that as a result of governmental discussions in the past two months, the telecom regulator would still have supervision of the industry except with regard to financial matters.

"[Regulators] will still have autonomy, but there are some points that come under the authority of the Ministry of Finance due to financial law," he said, adding that auditors from the Ministry of Finance would also audit the telecom regulator's spending.

So Khun said that mobile-phone operators would have to share signal towers according to the new regulations instead of erecting separate towers, as has happened in the past.

"Companies can rent towers from their owners, meaning they share the tower," he said.

Hello's chief executive officer, Simon Perkins, told the Post last week that the clause on infrastructure-sharing "doesn't bother us".

Mobitel, the leading mobile provider by active users, which said this year that it planned to invest US$350 million in infrastructure as part of a three-year rural expansion plan, declined to comment on the draft law on Monday.

Mark Hanna, chief financial officer of Royal Group, which owns a 38.5 percent stake in Mobitel, said the company had only recently seen the draft law.

Mobile companies operating in the Kingdom recently told the Post they had been concerned by unclear provisions in the draft legislation that had outlined limitations on foreign ownership, set at 49 percent, but had since been informed by So Khun that such articles related to company land ownership only.

"There is no limitation on foreign ownership. If someone holds a 100 percent share [in a mobile-phone company in Cambodia], he is the owner," So Khun said Monday.

The majority of Cambodia's mobile operators are owned by foreign entities, including Mobitel, which is 58.4 percent owned by Millicom International SA; Viettel, which is operated by the Vietnamese military; and Hello, in which Kuala Lumpur-based Axiata holds the majority stake.