Mobitel files lawsuit in row with Beeline

(CAAI News Media)

Thursday, 24 September 2009 15:01 Steve Finch and Nguon Sovan

MOBITEL has filed a lawsuit against Beeline for alleged “dishonest competition” and for using the market leader’s prefixes without permission, a deputy prosecutor confirmed Wednesday.

Sok Roeun told the Post that the case was filed with the Phnom Penh Municipal Court in “early August” before the 14th of that month, the last time both companies are known to have met with officials from the Ministry of Posts and Telecommunications and representatives from the rest of the sector in a bid to resolve the dispute.

Sok Roeun said Mobitel has already selected a lawyer and submitted its evidence to the court, but that he had not heard from Beeline. He said the Moscow-based operator would be expected to submit a defence before either case is examined with the help of specialists.

Mobitel’s accusations relate to what it has termed unfair competition from Beeline’s controversial “Boom” tariff that offers users cross-network calls at US$0.05 per minute.

Mobitel and other competitors say the cost of the call is, in reality, higher and accuse Beeline of price-dumping.

In response, Mobitel has deliberately blocked interconnectivity, and only 25 percent of calls to and from the dominant player’s network get through, Beeline General Director Gael Campan previously told the Post.

Beeline is accused of using Mobitel’s five prefixes – 012, 017, 092, 089, 077 – without permission in a bid to bypass the block.

However So Khun, minister of posts and telecommunications, said Wednesday that Beeline was not the only operator in the sector that had used competitors’ prefixes without permission.

Kith Meng, CEO and president of the Royal Group, the company that has agreed to buy a majority stake in Mobitel from Millicom International SA for $346 million, refused to comment on the case Wednesday, as did Mobitel’s Managing Director Jeffrey Noble.

“It’s prejudicial – I can’t comment at this stage,” Noble said, declining to say who was representing Mobitel in the case.

Campan said Wednesday that Beeline had selected legal representation – which he declined to name – and expected to meet with the prosecutor “in the coming days”.

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In the past, we have invited the two companies to reconcile.

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The legal action was filed just days before the MPTC attempted to broker a compromise between the two network operators on August 14.

Three days later So Khun sent a letter to Kith Meng and Beeline “for implementation” of a request that the latter raise cross-network prices to $0.06 per minute, adding that each party had “tried to reach a fruitful compromise”.

In return, Kith Meng was asked “to open sufficient trunk network so as to allow high efficiency of … traffic between Mobitel and Beeline for the benefit of the customers of both networks”.

However, a resolution was never reached.

“In the past, we have invited the two companies to reconcile,” So Khun said Wednesday.

Although Beeline this month stopped taking new users on its “Boom” tariff and announced a new “Super Zero” tariff on which cross-network calls are priced at $0.06 per minute, existing “Boom” customers can still make calls to other networks for $0.05 per minute. Mobitel – and other networks including Hello, Smart Mobile, qb and Mfone – say this remains unacceptable given that Beeline is still offering what they term below-cost calls.

In a bid to resolve the dispute, MPTC on September 8 set up a task force under MPTC Secretary of State Sarak Khan charged with devising a prakas (edict) or sub-decree to address key issues at the centre of the dispute.

That now appears to have been done partly to deal with the previously submitted legal action by Mobitel, but it remains unclear how a law designed to address a dispute retroactively will impact the case.

Sarak Khan was unavailable for comment Wednesday.

Beeline defends tariffs

On September 12, Beeline attempted to defend itself publicly through two full-page advertisements – one in English and the other in Khmer – in The Cambodia Daily newspaper.

“All allegations that Beeline has not kept its commitment are not correct,” the notices stated, adding that the company was not “in violation of any tariff agreements”.

Earlier this week Campan dismissed rumours that Beeline was planning to stop offering customers cross-network calls at $0.05 per minute – an apparent solution to the legal action – saying that customers “are switching by themselves” to the new “Super Zero” tariff.

“If they decide to move voluntarily, that is up to them,” he said.

When the Post called a Beeline customer service line Tuesday, the service assistant – who declined to be named – also knew nothing of a possible end to the $0.05-per-minute pricing policy that prompted Mobitel’s legal action last month.

“Yes, you can stay on Boom,” she said.