The future of the Internet

Online CEO, Bill Merchent

Tuesday, 15 February 2011
By Post Staff
Phnom Penh Post

As technology gathers pace in the Kingdom, Post reporter Jeremy Mullins talks to two internet service providers with different visions for the future

Ezecom CEO, Paul Blanche-Horgan

THE domestic internet service provider market is likely to face consolidation, according to Ezecom’s chief executive officer Paul Blanche-Horgan, who believes that fibre connections will prove the future of internet access in Cambodia’s homes and offices.

Ministry of Posts and Telecommunications statistics show 16 active ISPs in the Kingdom, but Blanche-Horgan said the market was too small for the current number of operators.

“There will certainly be consolidation in the ISP market just as we are now seeing in the mobile [phone service] sector,” he said.

“Competition is obviously needed in any industry to give the customer choice and value for money,” he said, but added too many operators was ultimately not beneficial for the customer.

An overabundance of ISPs meant investment in technology would not happen in most cases, due to a lack of return on investment.

However, in a year from now he said “there will certainly be far less players in the market”.

While a myriad of technologies are becoming available for “last mile” internet access in Cambodia, unlike some of its competitors Ezecom is focusing on providing internet access through fibre-optic services.

“Fibre is here to stay,” said Blanche-Horgan.

“WiMAX and DSL are old technologies unable to offer high-speed internet, which is certainly required by customers today for large data movement, interactive content, and Internet Protocol Television.” Content providers were using up bandwidth as fast as it was available and Ezecom knew the importance of keeping up with demand, he said.

Ezecom launched in January 2008 and began operations in April that year.

Owned by Paul Blanche-Horgan, it has since grown to become one of the four largest ISPs in the Kingdom, claiming some 3,500 subscribers.

Since startup, the firm has “heavily invested in the latest fibre and Gpon [fibre] technology” but expanding its network is an ongoing process.

Its nationwide network is underground and “fully protected”, while its Phnom Penh main routes are ducted, or covered, for protection, according to Blanche-Horgan.

Falling international bandwidth costs and low penetration of the population meant internet in Cambodia was more expensive than in neighbouring countries, he said, but Ezecom had made “great progress in reducing costs whilst maintaining quality of service”.

He also claimed the ISP had been able to double speeds for the same price in February 2010, and again in July last year, and added last month it had increased speeds by 50 percent.

“We were able to do this because we have passed on the savings we have made in international bandwidth costs and management of business growth,” he said, adding he credited his staff for their dedication to duty, making Ezecom’s rapid growth possible.

Online CEO, Bill Merchent

INTERNET service provider Online believes technologies such as wireless delivery holds a key to growth in the Kingdom, where internet penetration is on the upswing thanks to innovations in technology.

CEO Bill Merchent believes a burgeoning middle class and increased global usage of technologies such as Apple Inc’s iPads and iPhones is driving internet demand in the Kingdom.

“We are working very hard in trying to improve the availability of the internet to the entire Kingdom,” said Merchent.

“As the Cambodian people become more aware of the technologies available to them they will be demanding that we provide them with the most up-to-date connectivity on the world market.”

Ministry of Posts and Telecommunications statistics obtained last month showed there were 173,675 internet subscribers in Cambodia in 2010, up from 29,589 subscribers the year previous.

Online is one of the longest-operating Cambodian ISPs. It began as a subsidiary of Australian telco Telstra in 1997, before it was acquired by Cambodian-owned AZ Group in 2003.

The firm – which claims 30 percent market share – sees its future growth fuelled by innovations such as rolling out the latest in WiMAX, among other technologies, and expanding its operations as a content provider. WiMAX is a method of “last mile” internet delivery, where the internet access is provided using wireless technology.

One of the main challenges for the sector, commentators have said, is lowering down the price for internet usage. When Online first launched, it originally purchased international bandwidth needed for connectivity at a very high price.

But with an increased number of wholesalers servicing the Cambodian market, the “prices have reflected this competition between the providers and thus have lowered our price by Megabit per second,” he said.

Merchent claimed increased competition among bandwidth providers translated directly to lower costs for consumers.He agreed there were likely too many ISPs in operation given the size of the domestic market, but said: “In the future there will be less and most will have a specific niche they will service.”

“We had the same situation in the United States when the first ISPs were started there,” he said.

“Many people try and get into the business, but few have the resources to stay afloat, because in order to be and stay successful in this business you have to continually upgrade your services to meet the demand of the educated market.”

Merchent said Online was looking to become a content provider to the Kingdom’s businesses, providing services such as warehousing, time and attendance, and asset tracking through its data centre. It will also introduce an application to allow trading on international markets, which will be extended to the Stock Exchange of Cambodia when it is up and running. Currently it offers services in 20 of the Kingdom’s 24 provinces and aims to cover the remaining four provinces in the near future.