Mobile Phone Firms Threaten to Sue Mfone

Mobile phone operators Hello Axiata Co. Ltd. and Latelz Co. Ltd. are threatening to take legal action against the Thai-owned firm Mfone for allegedly refusing to pay hundreds of thousands of dollars allegedly owed to them in interconnection fees.

In a letter dated October 12 to Mfone’s chief financial officer, Naruemon Sriphan, Hello claims that Mfone owes the firm a total of $142,297 in fees which are charged when the user of one network calls a user of another network. The missed payments date back to June 2011, according to the letter, which also threatened to suspend connection services between the two firms unless the amount is paid in full.

“This letter would serve as a reminder and warning letter to Mfone for the late payment of the above outstanding amount and HACL [Hello] reserve the right to suspend the interconnect service with immediate effect, charge interest cost and instituting legal actions,” the letter, which was signed by Hello CEO Simon Perkins, said. The letter also stipulated that Hello had sent four preceding correspondences to Mfone without any action being taken to rectify the situation.

Thomas Hundt, CEO of the Cyprus-based Latelz, which operates under the Smart brand name in Cambodia, said that his firm has also issued several letters to Mfone in the past year threatening to take similar measures unless the money it owes is paid.

“If the debt remains unpaid we will move into a stage of action. We will not issue any more communications on this issue,” he said, declining to specify the exact figure Smart says it is owed.

“Our aim is to get the money which we are owed,” he added.

In a separate letter dated September 21 and also signed by Mr. Perkins, Hello informed the newly established Telecommunication Regulator of Cambodia of Mfone’s alleged actions.

Officials at the Ministry of Post and Telecommunications could not be reached yesterday, but in the past they have said such issues are not the responsibility of the government.

Atip Rittaporn, managing director at Shenington Investments, the holding firm for Mfone, said what his firm owes is substantially different from what Hello and Smart are asking.

“The data between the three of us has to be synchronized first because it is different,” he said, adding that non-payment of interconnection fees is commonplace in most countries.

“It is normal, so we will have to just settle this between us because sometimes the numbers are not correct,” he said. “I do not think that it will happen—that we go to court.”

Hello, Smart and Vietnamese-owned telecommunications firm, Viettel (Cambodia) Pte. filed similar complaints to the government in July claiming that CamGSM Co. Ltd., which operates under the MobiTel brand name, owe d them collectively more than $1.5 million in interconnection fees.

Phillip Wong, chief financial officer at Hello, said yesterday that MobiTel had already paid nearly all of the money it owed in interconnection fees soon after the issue went public in August.

“MobiTel has basically managed all the debt down, but I doubt that Mfone will be able to do the same,” Mr. Wong said. “The issue these days is that all the companies here are in debt, so non-compliance like this is becoming worse and worse.”

Mr. Rittaporn admitted that Mfone is facing tough times with profits this year dropping by half to $1.34 million during the first six months of the year.

Thaicom Public Company Ltd., the majority shareholder in Mfone, devalued the company by $1.31 million in May and has already expressed its intent to sell the company.

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