VimpelCom, the parent company of local mobile operator Beeline, is looking to sell the majority share of its Cambodian assets and has entered negotiations with a possible buyer, according to a document obtained Tuesday.
“VimpelCom intends to dispose its entire indirect 90.0 percent stake in Sotelco Ltd. (“Sotelco”), its Cambodian operator. As of 31 December 2012, sale negotiations with a potential buyer were in progress,” VimpelCom said in its annual filing with the U.S. Securities and Exchange Commission (SEC).
Sotelco is a subsidiary of Amsterdam-based VimpelCom and operates under the Beeline brand in Cambodia.
Until now, VimpelCom has not publicly said that it is looking to sell its Cambodian assets, and its spokesman, Bobby Leach, has declined to comment on the topic, saying only that the company is conducting an ongoing review of its worldwide assets.
In an email Tuesday, Mr. Leach wrote, “Negotiations concerning a potential change in ownership of the Company are continuing and I am not able to comment further.”
He declined to name the potential buyer or say if negotiations would end in a merger, but it is understood that Beeline has been in talks for about a year with local mobile operator qb.
Officials at qb declined to comment, and CEO Alan Sinfield could not be reached.
In October, The Financial Times reported that VimpelCom contracted Standard Chartered bank to sell its Cambodian assets.
Since its entry into Cambodia’s oversaturated mobile market in May 2009, Beeline has witnessed tough competition from more than half a dozen operators.
The SEC filing states that Beeline had only about a 6 percent market share last year, placing it last on the list of the country’s then five-largest mobile operators—Metfone, Smart, MobiTel and Hello. Smart and Hello have since merged.
The company also reports a three-year trend of falling average revenue per user, down from $3.50 in 2010 to $2.90 in 2011 and to $1.60 in 2012.
“The decrease was primarily due to a decrease in the average price per minute as a result of competition,” states the filing.
Since last year, Beeline has also witnessed a steady fall in subscribers. Its fourth-quarter financial report released earlier this month states that the number of customers plummeted from 1.02 million to 598,000, a drop Mr. Leach said was because the company dumped “inactive users.”
Last Friday’s filing comes about one year after VimpelCom devalued its Vietnamese and Cambodian assets by $527 million and then sold its Vietnamese operations.