In the apparent escalation of a pricing war between local mobile telephone companies, market newcomer Beeline announced on Friday that it will not charge for time spent on the phone after the first minute for calls made within their own network, an offer that comes on the back of accusations this week that the Russian firm was selling calls below cost.
Cambodia’s leading mobile provider MobiTel criticized Beeline’s below cost calls last week, and accused the firm of the “irresponsible” business practice of “price dumping,” a charge that Beeline General Director Gael Campan denied on Friday, shortly after the launch of their new, free-after-the-first-minute, “Super Zero” plan.
“It is the most competitive in the market,” Mr Campan said.
“We think that it is more aggressive,” he said, comparing “Super Zero” to the firm’s earlier “Boom” plan, which caused the upset with MobiTel for costing just 5 cents per minute for calls made between phone networks. That Beeline promotion had undercut competitors who charge more than 6 cents for each 60 seconds of cross-network calls.
Competitors, particularly MobiTel, have said that by selling call minutes at less than 6 cents Beeline was acting irresponsibly and hurting profits in the entire mobile phone sector.
Mr Campan denied the charge on Friday, and said that his company could still make a profit at 5 cents per minute. He also denied that his company had reneged on a deal with the Ministry of Posts and Telecommunications that promised to end the Boom tariff plan. The Boom tariff, however, has ended for new customers but will continue for those who signed up before Sept 1.
MobiTel said Thursday that it would suspend the technical process of connecting its network with the Beeline network until the firm stopped the Boom tariff entirely.
The connectivity issue had made it difficult at times for calls to be made between the two networks, Mr Campan said.
“Everybody knows there are difficulties from Beeline and I am sorry to say mainly from calling Beeline to MobiTel. But we are very optimistic that this issue is going to fade away,” he said.
Kith Meng, the CEO of Royal Group, which owns MobiTel, declined to comment on the issue on Friday.
The provider Smart Mobile also stepped up its promotions on Friday by offering free call minutes—between 20 and 30 minutes everyday—within its network, the company said. The plan, which starts on Monday, gives up to 30 free minutes to subscribers with more than $5 of credit on the phones, and 20 free minutes to customers with less than that.
Kirill Mankovsky, chief marketing officer of Smart Mobile, said the Cambodian mobile phone market is still not saturated yet and companies are being more aggressive in grabbing the remaining market share.
“The competition is high because there are a lot of players,” he said, adding “I think there is still room for growth for all operators.”
Syed Azmeer, chief marketing officer for Telekom Malaysia International Cambodia, which operates the Hello Point network, said on Thursday that Beeline, in launching its Boom plan, had not followed a consensus understanding among telecom firms in Cambodia on pricing, and the Russian firm’s deep pockets and ability to take losses threatened the profits of other companies.
“Most of the operators have agreed that we will stick to certain prices and not go beyond that. It’s not something formal,” Mr Azmeer said.
A government official who declined to be identified because he did not want to be seen as taking sides in the mobile phone spat said new companies have entered a crowded field with less expensive, more up-to-date technology and are trying hard to attract a necessary customer base in order to be viable.
But that competition threatens the older companies, he said.
“I think interconnectivity is very important. It needs to be regulated…. MobiTel is trying to protect their own share,” he said. “I think if [companies] have regulations they can have better competition.”