Mobile market shake-up move

via CAAI

Monday, 06 December 2010 18:20 POST STAFF

Smart Mobile and Star-Cell are merging under the Smart brand to form what could be the Kingdom’s third-largest mobile- phone provider. The deal, which is pending approval from Cambodian authorities, would see Star-Cell’s parent TeliaSonera granted 25-percent ownership of the combined firm.

Both companies said yesterday the merger would see Smart Mobile swell to 850,000 subscribers.

That would leave it third in the market, behind Mobitel and Metfone, in terms of active SIM cards, according to Ministry of Posts and Telecommunications statistics released in June.

Smart Mobile Chief Executive Officer Thomas Hundt declined to comment on the payment terms of the merger yesterday, but described the agreement as “pioneering” for the mobile market.

The sector – which now has eight players – is widely regarded one of the most competitive in the world and in need of consolidation.

Hundt said the advantages of the merger went beyond an increased subscriber base and broader network coverage.

The merged entity would also benefit from “combined distribution network, new services – such as the introduction of 3G during 2011 – and combined know-how”.

Star-Cell staff would be added to Smart Mobile’s payroll, Hundt said, while signal towers considered “redundant” by infrastructure sharing would be relocated.

Tero Kivisaari, TeliaSonera president for Eurasian business, described the merger as “inevitable”, pointing to the “fierce competition” and “high churn” of the Cambodian mobile market.

“We are therefore pleased to drive this development and thereby create a stronger mobile operator in Cambodia,” he said in a release to the Stockholm stock exchange yesterday.

Simon Perkins, CEO of mobile operator Hello, echoed Kivisaari’s comments. “It’s a totally obvious move for smaller players in the sector,” he said.

However, he questioned the legitimacy of the claim the pair would form an 850,000-strong subscriber base.

“That’s rubbish,” he said. “The figures are absolutely incorrect.”

Providers have previously pointed to the difficulty in evaluating subscriber numbers, as the way they are measured varies from firm to firm.