Beeline accused of reneging

Photo by: SOVAN PHILONG
A mobile phone shop employee in Phnom Penh displays application forms for Beeline’s Boom tariff. The mobile provider said it stopped adding new customers on the scheme Tuesday.

The Phnom Penh Post
Wednesday, 02 September 2009
Steve Finch and Ith Sothoeuth

Mobile operator drops its controversial pricing plan but only for new customers; Mobitel says this violates recent agreement to settle telecoms dispute

MOBITEL on Tuesday accused Beeline of not doing enough to end a months-long dispute even after the mobile operator halted new applications for its "Boom" tariff, which competitors have said is priced below the cost of connecting across networks.

Beeline Cambodia General Director Gael Campan confirmed that it stopped adding new users on the tariff Tuesday, and that all advertising - including billboards - had been withdrawn.

"We have instructed all our outlets to stop selling Boom," Campan said Tuesday.

Deal breaker
However, referring to a meeting last month after which the Ministry of Posts and Telecommunications (MPTC) and Mobitel said Beeline had agreed to raise its tariffs from US$0.05 per minute to $0.06, the Royal Group - an investor in Mobitel - said Tuesday that Beeline had not fulfilled its part of the deal.

"The compromise that was reached between all the telcos and Beeline was that Beeline would cease selling below cost by September 1st,"said Mark Hanna, Royal Group's chief financial officer.

"If this is not the case, then they are going back on their commitments, and the situation will not have changed as far as we - and probably the other telcos - are concerned."

He added that in maintaining the Boom tariff for existing customers, Mobitel considered Beeline to have violated the agreement: "Beeline made commitments to the MPTC, and it is now up to them to deliver on them."

Beeline told the Post Monday that customers already signed up on the Boom tariff would still benefit from the $0.05-per-minute rate on all domestic networks, a point it reinforced Friday when it sent text messages to all users that the rate would remain "forever".

It said a new tariff - which Campan said Beeline had planned for some time as part of its expansion strategy - would be announced Monday at a press conference in Phnom Penh.

Campan has argued that it is not selling below cost, and that its pricing policy is little different from a supermarket promotion in which products are sold for a profit with a number of promotions added to entice customers and build loyalty.

Disconnect
With Beeline in turn accusing Mobitel of blocking its network in what it says is retaliation for its perceived price-dumping - a point backed up by Telecom Cambodia tests, Beeline says, and other industry insiders - it appeared Tuesday that Mobitel had not stopped its efforts to hinder Beeline's interconnectivity.

"The quality [of the line between the two networks] is bad," Campan said Tuesday.

Beeline conducts interconnectivity tests every 30 minutes by making 10 calls to each of Cambodia's eight other networks, which it said showed Mobitel was interfering with interconnectivity.

Despite the continuing disagreement, Campan said Monday that it had neither threatened legal action nor received word of Mobitel planning a lawsuit.

Still, both sides have made claims of legal infringement.

Beeline has accused Mobitel of violating an interconnection contract, interconnection standards and therefore Cambodian regulations by blocking its network.

Aside from allegations of price dumping - which Mobitel says other operators have also made to the ministry - the market leader says Beeline has illegally used Mobitel prefixes to get around interconnectivity issues.

Hanna said Beeline had also "violated national security and the ITU [International Telecommunications Union] guidelines on the use of mobile prefixes - an offence punishable by ITU on Vimpelcom Group [the Moscow-based owner of Beeline]".

Sanjay Acharya, the ITU's chief of media and public relations, told the Post by email late Monday from Geneva that the Mobitel-Beeline dispute "would be an issue to be dealt with by local authorities. It does not fall within ITU's purview".

Mediate, not regulate
Touch Heng, undersecretary of state at MPTC, told the Post Monday that the government would only mediate in the case, as it had done thus far.

Part of the problem, as acknowledged by international agencies including the UN Development Programme, is that Cambodia still does not have a telecoms law or regulator to deal with longstanding problems such as deliberate blocking of mobile interconnectivity. The long-awaited legislation remains stalled in the Council of Ministers.

Article 9, Chapter 3 of the Khmer-language draft law urges "fair competition in the telecommunications industry", but most of the detail relates to capping high prices rather than cases in which price dumping is alleged.

In Chapter 9 the draft states: "[The] licensee can decrease prices of services beneath the level set by the Telecommunications Regulator of Cambodia."

This regulatory body is expected to be set up once the draft passes through parliament.

In regards to the blocking of other users, the draft is much clearer, although no punitive measures are outlined: "No one licensee shall be allowed to ban or to, by whatever means, prevent any other services provided by another licensee," it states.

ADDITIONAL REPORTING BY NATHAN GREEN