VN sets its sights on dominating Cambodia’s telecom market

By An Du 25th February 2010

VietNamNet Bridge – The big telecommunication and information technology groups in Vietnam like Viettel, FPT and VTC are looking to Cambodia with expansion in mind. Cambodia has become an attractive destination for Vietnamese telecom investors.

Viettel is now the largest Vietnamese telecom investor in Cambodia. It launched the Metfone mobile network one year ago. After six months, the Viettel Cambodia topped the network, accounting for 42 percent of the total number of base transceiver stations (BTS), 88 percent of the total optical cable and second for subscribers in Cambodia.

This year Viettel Cambodia aims to earn $250 million in revenue and have 3,000 second-generation (2G) BTS, 1,500 3-G BTS and 15,000-16,000km of optical cable.

FPT Telecom has been involved in telecom business in Cambodia for six months, mainly by selling frequency bands at Vietnam-Cambodia border gates. FPT’s general director Nguyen Thanh Nam said that it is the time for FPT Telecom to enter Cambodia to directly serve users. The company plans to cooperate with Mekong Net, one of the two biggest Cambodian IT firms.

Most recently, VTC group introduced the VTC Online Cambodia Company and its first products and services for the Cambodian market.

Nguyen Viet Hung, managing director of VTC Online Cambodia, said that the firm’s products are totally “Khmermizing” and would be put online in late February. The first products are entertainment, education programmes and cultural information.

Competition

Entering the Cambodian market, the most “dangerous” rivals for FPT are perhaps not local firms but Viettel.

“Viettel is expanding investment in Cambodia but as in Vietnam, Viettel’s top priority are mobile services so if FPT Telecom is agile, we can rule the Internet market, Nguyen Thanh Nam said.

However, FPT Telecom’s plans may not go smoothly because Viettel recently stated to strive for a holding of 46 percent of the fixed phone market, 90 percent of the mobile market and 90 percent of the broadband Internet market in Cambodia by 2011.

On June 1 2009, Viettel Cambodia became the first provider of multi-telecom services in Cambodia, including channel leasing, voice over Internet protocol (VoIP), broadband Internet, mobile and fixed phone services.

Content services are also promising for Vietnamese investors. Thanh Nam disclosed that FPT Telecom considers Internet facilities as a way of developing content services in the future.

However, FPT Telecom is not a big name in content services in Cambodia just as it is not a big supplier of content services in Vietnam.

The opportunity for VTC in the content service market in Cambodia seems to be bigger because VTC’s subsidiary, VTC Intercom has always obtained 300 percent of growth rate annually for content services in Vietnam since its establishment in late 2006. This year VTC plans to open four branches in Siem Reap, Battambang, Preah Sihanouk and Kampong Cham. It will offer electronic services related to trade, banking, sports, music and fashion.

The rivals of VTC in Cambodia in the content service market are local firms. Mike Gaertner, managing director of the CIDC, the distributor of the most popular online game in Cambodia – Justice X Wars II, spoke to the Phnom Penh Post Office: “They (VTC) will divide the market in two parts. CIDC will react and VTC will react too. It is an interesting moment for the online game industry in Cambodia”.

CIDS currently has more than 120,000 subscribers.

Potential market

Apart from the competitive mobile market with nine networks, including big firms from Malaysia, Thailand, Sweden, etc., other markets in Cambodia are very promising.

According to Nguyen Thanh Nam, the broadband Internet market is still in its infancy but some good signs have arisen. In the last six months, charge for 1Mb transmission have dropped from $1,000 to $300 and will continue falling. “The fall in charges will push demand up,” Nam said.

An official from Viettel said that only 0.12 percent of Cambodian people are Internet subscribers. Viettel aims to raise the rate to 3 percent over the next three years.

As to the content service market, the Phnom Penh Post Newspaper commented: “The local market is still broad for development in comparison with neighboring countries”.

The CIDC’s Gaertner was very optimistic, saying that his firm is not afraid to compete with new rivals from Vietnam because: “Vietnam has 18 million Internet users, 10 million of them are gamers. I hope the same thing will take place in Cambodia”.