Operator pledges to grandfather in users of low-cost call plan

Photo by: Sovan Philong
A mobile-phone vendor sells Beeline top-up cards Monday in Phnom Penh.

The Phnom Penh Post
Tuesday, 01 September 2009
Steve Finch and Ith Sothoeuth

But Beeline says new customers will now face revised tariffs to appease sector giant Mobitel

MOBILE phone operator Beeline said Monday it would stop taking new users on a tariff that provoked price-dumping accusations by Mobitel and accused the market leader of blocking its network.

Gael Campan, Beeline's general director in Cambodia, said existing users would remain on the company's US$0.05-a-minute any-network "Boom" tariff, a point it reiterated to users in a text message Friday. However, from today no new users would be taken on the plan, he added.

The announcement follows discussions involving Beeline, Mobitel, the Ministry of Posts and Telecommunications and Telecom Cambodia in a bid to solve a dispute in which Mobitel claimed Beeline offered its users below-cost calls to rival networks. Beeline in turn accused the market leader of blocking its users' calls.

Campan said Mobitel began blocking its network from its launch in May, pointing to tests done by Telecom Cambodia, as well as its own tests, that he said showed interconnectivity with Mobitel was, on average, about 25 percent two weeks ago.

"They [Mobitel] acknowledged they were blocking us intentionally," Campan said of discussions during the meetings.

An industry insider who declined to be named said Monday that it was common knowledge that Mobitel had been blocking Beeline "for some time".

In response Monday, Mark Hanna, chief financial officer at the Royal Group, which recently agreed to buy the controlling stake in Mobitel from Millicom International, denied the accusation.

"The technical interconnection tests and setups between the two networks were not completed," said Hanna. "Our engineers are ready to continue and complete all the technical tests with Beeline as soon as possible."

After the last meeting August 14, Posts and Telecommnucations Minister So Khun sent a letter to Mobitel on August 17 requesting it "open sufficient Trunk Network so as to allow high efficiency of ... traffic between Mobitel and Beeline". The letter also said that Beeline had "decided to increase the tariff across networks from 5 to 6 cents/minute".

Campan would not disclose details of Beeline's new pricing structure, saying it would be announced at a press conference on Monday.

Mobitel said Monday that all of Cambodia's mobile operators had raised the issue of Beeline's pricing with the ministry, a point backed by Hello's CEO Simon Perkins on Monday.

Another operator, Smart Mobile, said Monday in a statement issued to the Post: "In general we support the idea that calls across networks should not be retail priced below the regulated interconnection charges."

Mobitel has argued to the ministry that charges across networks cost all providers the same - 5.95 US cents per minute, which includes taxes and a surcharge to Telecom Cambodia - and that therefore Beeline is price dumping by offering calls at 5 cents per minute.

"Beeline will have to sell at 6.7 cents [per minute] to break even," Hanna said.

Campan said he responded to the accusation directly to the ministry last month, saying that it could maintain profitability through other products, including text messaging.

He added that costs incurred by the provider were charged per second while revenues were rounded up to the nearest minute meaning that a 40-second call would incur a cost of two-thirds of 6.7 cents, while the revenue from the user would still be charged at one minute, or 5 cents.

Ministry Undersecretary of State Touch Heng said Cambodia was a free market, and that pricing was up to the individual operators. The ministry would mediate in disputes, but would not order operators to adjust rates. "All operators have rights," he said.

With Beeline moving to discontinue its controversial tariff, it remains to be seen whether a resolution will be reached on interconnectivity.

"There was a slight progress in the past few weeks," said Campan.

Additional reporting by Nathan Green