MobiTel: New Fee Rules Will Hurt Service

Telecommunications leader MobiTel has warned that new government regulations will force the company to disrupt service between the country’s land lines and mobile phones.

“It will [eventually] be harder to connect,” said MobiTel General Manager David Spriggs.

Because of recent regulation changes by the Ministry of Posts and Telecommunications that create a “loss making” situation for MobiTel, calls made from land lines controlled by the ministry will receive the “lowest, or no priority” service from the company, Spriggs wrote in a letter Wednes­day to Minister So Khun.

MobiTel’s investment in carrying calls from ministry-owned lines through their network will be reduced, while the company continues to upgrade its network for mobile phone customers on whom the company can make a profit, Spriggs said by phone Thursday.

“It will happen over time. I will just not get approval to make investments where there is no return,” he said.

MobiTel has the largest market share in Cambodia’s telecommunications sector. It has coverage in all provinces and recently upgraded text messaging and e-mail services.

The government has argued that MobiTel’s expansion has been so rapid that they have nearly wiped out the ministry’s land line business, forcing the ministry to look for ways to win back customers.

Of the 161,000 phone users in Cambodia, the ministry only has 20,000 land line customers, having lost 5,000 customers over the past year, said Koy Kim Sea, undersecretary of state for Telecommunications.

The ministry paid out $3.5 million last year to mobile phone network to deliver calls from the ministry’s land lines, Koy Kim Sea said.

According to one source inside the ministry, most of that loss can be attributed to MobiTel, which is operated under a partnership between Cambodia’s Royal Group and Sweden-based Millicom International Cellular SA.

“MobiTel has killed fixed phones and public phones owned by the state,” the official said.

However, the problem cannot be blamed on interconnection fees as much as it can be blamed on the ministry’s inability to collect its own debt, the same official said.

For every $0.07 the ministry formerly paid on calls delivered by mobile phones, it should have been collecting $0.15 for its services. Under new MPTC regulations, that fee has been dropped to $0.01. Many of those calls were made on land line lines within other ministries, which were not paying their bills, the official said.

The MPTC, acting on proposals from the Ministry of Finance, also discontinued payments to all mobile phone companies for the delivery of calls from land lines to mobile phone customers.

“The result, and it will begin from Sept 1, will be…a severe decline in the quality of service between fixed and mobile operators,” Spriggs’ letter states.

The letter was not a threat, Spriggs said, but “a continuation of our protest” to the regulations. “We want the ministry to reconsider,” he said.

Regardless of the letter, the ministry says it has no plans to stray from the regulations it passed earlier this month, Koy Kim Sea said.

The purpose of the new regulations was to encourage customers to use ministry land lines. But the government does not have any plans to drop prices for land line calls, nor does it have any budget for a promotional campaign, Koy Kim Sea said.

“MPTC will have to follow the Ministry of Finance’s decisions,” he said.

Because of the high costs of fixed lines, the mobile phone industry here has exploded, with every mobile company expanding their services and coverage areas year by year.

 

 

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