The minister of posts and telecommunications on Monday insisted an edict ordering the country’s seven mobile phone operators to abide by a law that sets minimum prices for calls is only temporary.
Prak Sokhon, the newly-appointed posts and telecommunications minister, said the order was necessary because of the flagrant disregard for the law on call prices by phone companies had become too much, and the government also needed to boost tax revenue from the sector.
“This measure is only temporary because we want the operators to be quiet. We need silence in the market. They can’t keep abusing [the law] like this,” Mr. Sokhon said Monday during a two-hour press conference called to clarify the government’s order to standardize call prices.
The 2009 law, known as Prakas 232, sets minimum prices for calls made on the same network to 4.5 cents per minute and for cross-network calls to 5.95 cents per minute. The directive also limits bonus promotions on call minutes, or top-up deals, to not more than 50 percent of the rates and to a limited number of deals per year. That stipulation effectively ends phone operators’ lucrative bonus deals, which had become popular in recent months. Some companies had offered customers between 100 and 500 percent free top-up promotions.
The order to stop the promotions and enforce government-set call prices took affect Friday, and though officials referred to it as temporary, they did not know when—or if—it would end.
But one thing is certain about the order: The government wants more tax revenue from the telecommunications sector.
“The first objective is to guarantee fair competition, but we need to maintain the revenue of the government…. We want this sector to be healthy,” Mr. Sokhon said.
Vann Puthipul, deputy director-general of the General Department of Taxation at the Ministry of Economics and Finance, said revenue from the telecommunications sector would increase to about $80 million in the first 11 months of the year, but that the government wants at least a 20 percent increase in tax from the sector by the year’s end.
“For the 11-month period, we receive all types of tax revenues that amounted to approximately $80 million from this sector. If you asked how much we expect, taxation side wants more for the national budget so the state can use it for the public…. I hope it would increase by 20 percent,” he said.
Earlier this year, the government attempted to order operators to abide by Prakas 232, but the order lasted only about 10 days until it was rescinded by then-Minister of Posts and Telecommunications So Khun after apparent backlash from consumers and an all-out war between the country’s two largest operators: MobiTel and Smart.