Photo by: SOVANN PHILONG
A mobile-phone user makes a call in rural Kandal province on Monday. Only 29 percent of Cambodia’s population use mobile phones, with the vast majority of users living in cities, service operators said.
The Phnom Penh Post
http://www.phnompenhpost.com/
A mobile-phone user makes a call in rural Kandal province on Monday. Only 29 percent of Cambodia’s population use mobile phones, with the vast majority of users living in cities, service operators said.
The Phnom Penh Post
http://www.phnompenhpost.com/
Written by STEVE FINCH AND HOR HAB
Tuesday, 28 April 2009
Cambodia’s mobile-phone networks say that with cities reaching saturation level, rural areas will be targeted in future in the fight to generate greater share of the overall market
WITH mobile phone saturation still low in the countryside, Cambodia's telecoms companies say the future landscape of the highly competitive market will be determined by gaining rural users.
Only 29 percent of Cambodians owned mobile phones at the end of last year, private sector figures showed, but the majority of Cambodia's roughly 4 million mobile users live in the country's cities, particularly Phnom Penh.
"The urban areas are already highly penetrated, and approximately 80 percent of the population lives in rural areas," Mark Hanna, chief financial officer of Royal Group, which owns a 31.5 percent stake in Cellcard Mobitel, said Monday. "The rural market is where the majority of the growth in subscribers will be."
With most Cambodian mobile companies having established networks in the Kingdom's major cities first - Camshin, for example, launched in April 1998 just in Phnom Penh and Sihanoukville - in a bid to gain a permanent foothold in the market, most mobile companies in the Kingdom are looking to the countryside.
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The market will only be accessible once coverage ... is comprehensive.
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"I think more and more rural people will use mobile phones because they are getting cheaper and there are many competitors in the market," said Sok Vichet, product manager of Hello.
With the addition of Smart Mobile last month, there are already eight mobile phone companies in Cambodia. Mobitel remains the market leader, according to a 2008 annual report by its primary stakeholder Millicom International, with 55 percent share, followed by Camshin with 18 percent and TMIC with 15 percent.
Viettel already had half a million users by the time it officially launched in February after an aggressive expansion campaign that saw the company offer free SIM cards.
Viettel - which is owned by the Vietnamese military - was unavailable to discuss its plans for rural expansion on Monday.
The market leader Mobitel has specifically targeted Cambodia's countryside in a bid to maintain its dominant position, finalising a US$100 million loan this year from the International Finance Corporation and private international lenders ABN Amro, Cortdiant Capital, DnB NOR and Nordea.
The money will be spent on developing rural mobile communications, the IFC said in a press release last month.
"CamGSM [Cellcard Mobitel] plans to expand and improve existing network coverage and services, particularly in rural areas where the majority of Cambodians live and poverty rates are highest," the press release stated.
Infrastructure required
As Mobitel acknowledges, part of the challenge of accessing rural areas is building the necessary infrastructure. Currently, Mobitel's coverage does not extend to 30 percent of the country.
"The market will only be accessible once coverage footprint is comprehensive throughout the country," Hanna said, adding that a large part of Mobitel's investment in the short-term will be on developing rural infrastructure.
Following a model first developed in Cambodia's cities, Hello has in the past year established a system whereby it has put Hello mobile phone stalls in the provinces, 1,000 of which are already operational. Owners pay US$68 to set up the stalls with Hello merchandising including an umbrella and handset with SIM card.
"We will try to increase our sales to more rural areas," said Sok Vichet, adding that rural expansion had been slow this year due to increased competition.
Despite high poverty levels in rural Cambodia, mobile phone prices would not be a problem as competition had forced handset retail prices and tariffs down, he said.
WING, which is wholly owned by ANZ, is dependent on expansion into rural areas to develop its mobile payment service.
"The rural market for WING is important because WING is a payments service that allows customers to send and receive money via their mobile phone wherever they may be," Brad Jones, WING managing director, said Monday.
WING has already established more than 80 Cash Express outlets in rural areas that allow the changing of real cash into WING credit, and plans to add more, Jones said.
Unlike many other sectors in Cambodia, the telecoms market has been unaffected by the economic slowdown - meaning investment in rural areas is accelerating rather than slowing down, as might be expected in such a climate, industry sources said.
"The financial crisis will not have that much impact on rural rollout," Hanna said. "With the level of competition, the focus will be on growing the overall market and this will drive coverage improvements by the serious players."