Two Cambodian phone operators merge in overcrowded market

http://www.monstersandcritics.com/

Dec 6, 2010

Phnom Penh - Two Cambodian mobile phone companies announced Monday they would merge their operations, the first of a number of consolidations expected in the country's overcrowded mobile telecoms market.

Latelz Co Ltd, a subsidiary of Cyprus-based Timeturns Holdings Limited, will merge its local operation - branded as Smart Mobile - with Star-Cell, the venture owned by Swedish phone giant TeliaSonera AB.

The Star-Cell brand will be ditched, the companies said in a joint press statement, and the new entity with around 850,000 subscribers will carry the Smart Mobile brand.

The merger is subject to the approval of the Cambodian authorities.

Smart Mobile chief executive Thomas Hundt said the combined firm was likely ranked third in the market, but cautioned it was impossible to say precisely since 'nobody is giving actual subscriber numbers.'

He said the market remained highly competitive.

'Generally speaking it is a high churn market combined with low (average revenue per user) when compared with similar environments,' Hundt said.

'We are becoming a strong player in this market, that's for sure,' he said, adding that the merger would likely precipitate long-awaited consolidation

in Cambodia's mobile telecoms market.

In October TeliaSonera announced that it had written down the value of its Cambodian operation by 678 million Swedish kronor (around 103 million dollars), and said its ambitions in Cambodia 'had to be reviewed.'

Observers have long said the country's mobile phone market is overcrowded with nine operators chasing a total population of 14 million people.

The merger leaves eight operators in a market, which is thought capable of sustaining perhaps half that number.

The StarCell brand was launched in 2007 by Applifone, which was bought by TeliaSonera the following year as part of its acquisition of Nepalese mobile firm Spice Nepal.

The country's leading mobile operator, MobiTel, last year claimed it had more than 2 million active subscribers, or around 60 per cent of the market.