Telecommunications Minister So Khun said Wednesday that the ministry welcomes the addition of more international phone services but would not tolerate any price competition between the state-owned gateway (001) and a new private gateway (007).
“Prices should be regulated by the ministry because if we allow the company to set cheaper prices, it will affect the state-owned gateway business,” So Khun said at a press conference on the new international phone gateway Tele2, launched by Mobitel’s subsidiary Royal Telecom International.
“We don’t want to get killed.”
Tele2 started international telecommunication services last week, offering international phone calls, fax and video conferencing services. In the international telecommunications sector, the ministry owns the 011 international gateway, which was partially paid for and operated by Australia-based Telstra until last month, when Telstra’s 10-year contract to provide international phone services was not renewed.
International telecommunications has been a lucrative state business, generating about $23 million for the government last year alone and accounting for nearly 90 percent of the ministry’s annual revenue.
But in an effort to encourage the private sector’s entry in telecommunications, the government gave a 25-year license to Royal Millicom International Co (Mobitel) allowing it to launch the new international gateway. The government will share 51 percent of revenue from Tele2 services.
“It’s an opening of the free-market in international telecommunications….We both have to work together. We need a fair competition,” So Khun said, adding the new addition would bring improved services.
“It’s good to have two systems in the sector because they can support each other as a backup in emergency,” he said. “Users still can use international phone services even if one system is cut off due to technical problems.”
So Khun refused to answer questions about what additional services the state-owned gateway would offer to compete with Tele2’s service levels.
However, he reiterated that the competition should not lead to a price war between the two gateways. He said that the ministry is now revising the phone tariff, but a new phone tariff that is expected to lower phone rates by 10 to 15 percent would not allow Tele2 to set cheaper prices than the state-owned gateway.
Cambodia is one of the most expensive countries in the world for telecommunications, setting charges for calls to neighboring countries at $1.68 per minute, other Asian countries at $1.82 and the rest of the world at $2.03. High prices have been blamed for hindering foreign investment and country’s economic development.
