Mfone losses $13m

via CAAI

Sunday, 20 February 2011 16:34 Jeremy Mullins

The majority owners of Cambodian mobile phone provider Mfone lost more than US$13 million in the Kingdom last year.

Pointing to the large number of mobile operators active in Cambodia, Thaicom said there was a “price war and intense competition in the market” in its annual report, which added an appreciating Thai baht as a factor in the loss.

The Bangkok-listed company claimed a loss of 405 million baht (US$13.2 million) in its Cambodia results for 2010, on revenues of 959 million baht.

This compares with a 7.6 million baht profit in the Kingdom in 2009, on 1.514 billion baht in revenues, the report released late last week stated.

The firm also announced an adjusted net book value for Mfone’s property and equipment to about 2.317 billion baht as of December 31, a 22 percent drop on the 2.972 billion baht it had claimed the previous year.

Thaicom did not discuss the reason for the downwards adjustment in Cambodia, but said globally its property, plant and equipment had also declined in value by 8.7 percent.

This decrease was “mostly due to depreciation and amortisation expenses in 2010”, it said.

Thaicom’s Cambodia operations had contributed 20.7 percent of its overall revenues in 2009, but had declined to 14 percent of the company’s global revenues in 2010, according to the report.

The declining value of the US dollar against the Thai baht last year impacted Mfone’s bottom line, as it generates much of its revenue in greenbacks.

“The appreciation of baht has caused lower revenue from the telephone business in Cambodia in baht as Mfone reported financial statements in US dollars,” the report said.

Despite a new strategic approach launched last year which saw Mfone increasingly target specific market niches by tailoring plans to groups such as young people and Muslims, user numbers also declined over 2010.

Mfone claimed 723,860 subscribers at the end of December 2010, a 15.8 percent decline on the 860,089 subscribers at the end of 2009.

Previous Ministry of Posts and Telecommunications statistics showed that Mfone had 660,000 subscribers last November.

Last year, former Mfone chief executive officer Adisai Soonthornratanarak had said the firm had previously “struggled” with competitive pricing among mobile operators, but said “differentiating yourself is the key to success”.

Thaicom is the 51-percent owner of Mfone.

The remainder is owned through a joint venture between Qatar Telecom and ST Telemedia of Singapore, according to Thaicom’s website.

It also owns 100-percent of satellite television provider Cambodian DTV Network Limited.

Cambodia has eight active mobile operators following a merger earlier this year between Smart Mobile and Star-Cell, with the combined company operating under the Smart brand.

At the announcement of the merger last month, Smart chief executive officer Thomas Hundt said the sector was likely overcrowded – a widely-held view in the industry – adding there were few countries with as many mobile operators relative to the number of people as Cambodia.

Company officials have confirmed that Yap Wai Khee is now serving as Mfone chief executive officer, after taking over the helm from Adisai Soonthornratanarak.

He could not be reached for comment today.