Prime Minister Signals Sale of Government Phone Share

Prime Minister Hun Sen said Wednesday the government is willing to sell a majority of the state-owned telecommunications system to private firms in an effort to raise money for much-needed infrastructure development.

“We do have a policy on selling a shareholding of the state property to any private company in order to get funds to build roads, bridges and dams,” Hun Sen told reporters at the official launch of Cambodia Samart’s new digital phone network. “If [private invest­ors] want to own the share tommorow, we could even sell 70 percent of the share.”

The money, Hun Sen said, would be used to reduce Cambo­dia’s reliance on loans from such international donors as the Asian Development Bank and the World Bank. Government officials have put the value of the state telecommunications network at just under $100 million.

In September, the Ministry of Posts and Telecommunications announced a plan that would further privatize the state’s phone services, but Hun Sen’s statement is the first indication that the government might be willing to sell the majority of its network.

“It’s a good idea,” Telecom­muni­ca­tions Minister So Khun said. “The private sector is much easier and faster to develop the telecommunications sector.”

However, he and other officials noted that it marks a change from current government policy to keep at least a 51-percent stake in state property that is privatized.

Steve Yanuar, director of Cam­in­tel, also welcomed Hun Sen’s announcement. Camintel, which operates fixed-line services in 20 provinces, is owned 51 percent by the government and the re­mainder by Indonesia’s Indo­sat.

Yanuar said Indosat had hoped to be a majority shareholder of Camintel in order to make the company more profitable. “If [this announcement] means the government allows any private company to become a majority shareholder of a public enterprise, it could help our company.”

Camintel is responsible for rehabilitating and expanding on the military-style, satellite telephone system set up by Untac forces in 1991 and left behind after the 1993 elections.

But aspects of the government’s plan to deal with telecommunications assets remained unclear Wednesday.

In its announcement in Sep­tember, the Telecommunica­tions Ministry discussed a plan to form a joint venture with a Phnom Penh company that would ultimately operate all fixed-line services and the international gateway. It was said then that Camin­tel would either become a competitor or be absorbed.

The Australian firm Telstra operates the international network, but its 10-year agreement is set to expire in October 2000.

The government said it would then take over the assets. Telstra, which has invested $20 million in the system, hopes to remain as the international call provider.

There are other potential government telecommunications assets that could be sold.

The ministry’s Malaysian partner in the mobile phone joint venture TricelCam has indicated that it might hand over all of its assets.

Hun Sen said that Cambodia has the most favorable investment policy among the 10 Asean countries, most of which prohibit private companies from owning a majority of shares.



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