Gov’t Launches Public Telecom Enterprise

Cabinet Minister Sok An on Thursday presided over the official launch of a new public enterprise to provide and oversee fixed tele­phone lines with the 023 prefix, which is funded and staffed by the Ministry of Posts and Tele­com­munications.

Telecom Cambodia will em­ploy a staff of 700 from the ministry, according to Touch Heng, the enterprise’s director general and an adviser to Prime Minister Hun Sen.

Sok An said the enterprise should be fully privatized by 2008.

Overseeing fixed landlines was previously the mandate of the min­istry, and the ministry is providing the new enterprise with $40.3 million of its own assets, said So Khun, minister of posts and telecommunications.

The company began operations on Sunday, he said, asserting that it should not have an un­fair advantage over other companies.

“We are going to operate under the laws and regulations as other pri­vate companies are doing,” So Khun said.

The enterprise is operating from its own offices in Prampi Ma­kara district.

So Khun previously said that he hopes that Tele­com Cambodia will in­vest in mobile phone services as well.

Indochina Research Managing Director Tim Smyth welcomed the move but said economic prospects are not as rosy now as they might have been a few years ago.

“The question is whether the economics of a fixed-line network would be attractive to foreign investors,” he said. “It probably would not be the attractive revenue generator that it would have been five or six years ago.”

Fixed lines’ relative monopoly on international calls has eroded with more affordable cellular services and the increasing availability of Internet-based calls.

MobiTel general manager David Spriggs said the change would be an improvement for fixed-line service.

“It separates the operators from the regulators,” he said.

However, Spriggs added, Tele­com Cambodia will face stiff com­petition if they go ahead with planned expansion into mobile service. Another mobile provider might bring intense competition, shrinking revenue and a resulting drop in reinvestment by the companies.

“You end up with low-cost but poor quality networks,” he said.