Gov’t to Slash Costs of Making Phone Calls Cheaper

The government plans to cut international phone rates by about 30 percent and rates for calls made from the state-run landline to mobile phones by about 15 percent starting March 1.

“The number of telephone users are increasing every year and the ministry’s revenues are also increasing every year,” said Telecommunications Minister So Khun, in announcing the new rates. “We’d like to reduce the phone prices to attract more customers by making the tariffs closer to the international standards.”

The move comes after Prime Minister Hun Sen and Finance Minister Keat Chhon urged the ministry to reduce phone rates to attract more investors.

Consumers are charged $0.18 a minute when they make a call from the state-run landline (023 prefix) to a mobile phone. Under the new rate structure, consu­mers will be charged only $0.15 a minute. Officials say that type of call represents 80 percent of the total calls in Cambo­dia.

Costs of phone calls to Thai­land, Vietnam and Laos will be reduced from $2.40 per minute to $1.68, and prices to other Asian countries will be cut from $2.60 to $1.82. Prices to the rest of the world will decline from $2.90 a minute to $2.03 during the weekdays. On the weekends, prices will be discounted by 20 percent.

According to the new tariffs, local calls within the state-run fixed-line network will remain at $0.01 per minute and local calls between two land-line networks will remain at $0.05 per minute.

Long-distance calls within the state-run fixed network will be reduced from $0.30 to $0.15 a minute.

Mong Riththy, one of top businessmen in Cambodia, said Tuesday that the government is on the right track with the new rate structure.

“My company pays lots of money for domestic and international phone calls. It is too heavy for me to pay the phone bills every month,” he complained. “The reduced tariff will attract more foreign investors and help local business people to run their business.”

But while consumers are sure to welcome the reduced rates, some mobile telephone executives are upset about a change in the so-called interconnection fees.

The interconnection fee is what mobile telephone companies, fixed-line companies and the state-owned network must pay for calls switched from their network to another.

Under the new rate structure, for example, the ministry will pay an interconnection fee of only $0.07 a minute, instead of the current $0.14, to mobile operators for calls made from the state-run landline to a mobile phone.

That means mobile phone companies will receive less revenue for incoming calls. The ministry’s revenue on those calls, meanwhile, will increase from $0.04 to $0.08 a minute.

“We’re disappointed with the new tariff,” said Iain Williams, general manager of MobiTel (012). He said that the rate structure would discourage investment in the telecommunications infrastructure by private companies, thus slowing down industry development in general.

Others said they had no objection to the structure, but did note the government stands to benefit.

“This is very super advantageous to the ministry,” said Somchai Lertwiset-Theerakul, chief executive officer of Samart (015, 016).

Visit Rakvistwong of CamTel (018) said the new structure should enable the government to drop phone rates again.

“A main question is how can they provide cheaper prices to the public. They should reduce the phone tariff to consumers more,” Rakvistwong said.

Ministry officials defended the structure. “I believe the new tariff will improve country’s communications…even though it might negatively impact phone companies,” said Koy Kim Sea, ministry’s undersecretary of state.

According to the Posts and Telecommunications Ministry, there are about 17,000 users of the state landline network and 100,000 users in the mobile phone market. The ministry made about $26 million in revenue from telecommunication services in 1999 but claims mobile phone operators still owe roughly $17 million for revenue sharing and access to the international network.




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