Economic recovery evident across Cambodia’s telecoms sector

Friday, 16 September 2011
By James Barton
Developing telecoms

Although operators in Cambodia have a tendency to overstate subscriber figures to boost market share, growth does appear strong in the Southeast Asian country. The Cambodian regulator, the Ministry of Posts and Telecommunications, reported that there were 12.4mn mobile subscribers at the end of 2010, and while the actual figure is likely lower due to inactive subscriptions and multiple SIM card ownership, research firm BMI predicts that there will be 22.167mn mobile subscribers in Cambodia by the end of 2015, up from 15.680mn in 2011.

Although traditional voice service still seems to be the preferred form of communication for Cambodian consumers, this has not prevented mobile operators from launching next generation mobile data services. Digital Star Media has announced plans to offer LTE-based mobile phone service in 2012 and is looking to provide WiMAX mobile broadband service by end-2011.

Similarly, the recently merged Smart Mobile has rolled out its 3.75G network in 21 provinces, and aims to complete nationwide rollout by July. While data services have a role to play in the long term, data are likely to remain muted in the near term due to factors such as a lack of localised content. Operators are likely to price services very competitively to drive interest, but this erodes the profitability of data services.

The Phnom Penh Post has reported that Cambodian mobile operator Mobitel has submitted the necessary documents to the National Bank of Cambodia (NBC) to operate its mobile payment Cellcard Cash service. Consequently, the NBC was reported to be likely to approve the request in the near term. The NBC previously said the service would be suspended as Mobitel did not apply for a central bank oversight.

Cambodia needs to tackle corruption and income equality to ensure political stability in the long term. The macroeconomic situation is improving - Cambodia's economic recovery remains on track and real GDP growth could soon return to long-term trend growth of around 6.0-7.0%.