Regulatory Agency Urged Before Phone Joint Venture

Finance Minister Keat Chhon has proposed creating a regulatory body before the Telecom­munications Ministry embarks on a plan to establish a joint venture with a private company to operate the nation’s telephone services.

In a letter dated Sept 9, Keat Chhon also proposed the Tele­communications Ministry make a shareholders’ agreement that ensures the state can gain more revenue from such a joint venture, suggesting the ministry follow the procedure used to set up the Cam­bodia Pharmaceutical Enter­prise under the Ministry of Health.

Keat Chhon advised the ministry to avoid establishing another Royal Air Cambodge, which has been struggling financially, according to the letter, obtained Tuesday.

The Posts and Telecom­munications Ministry has proposed to establish Cambodia Telecom, a joint venture to operate domestic telephone and international gateway services with a Phnom Penh-based trading and construction company called AZ Distribution Ltd.

Officials have maintained that the deal has been approved by Prime Minister Hun Sen and the Council of Ministers.

But Keat Chhon and others are concerned about the nature of the deal with a company that apparently has no experience in telecommunications except to supply cables and accessories. Some believe that the deal will sell out the ministry.

AZ cofficials have not responded to attempts to be interviewed.

Top officials of the Tele­com­mu­nications Ministry, who discussed the matter on Mon­day, rejected Keat Chhon’s suggestions, citing the points raised in the letter are impractical.

“We don’t need to create another regulatory body—that would be a duplicate of the ministry,” Posts and Telecom­munications Minister So Khun said Tuesday. “We also object to the proposal [on following the example of the Pharmaceutical Enterprise in which the state is the minor shareholder] because we need to be the majority shareholder to control the public enterprise.”

In his letter, Keat Chhon also expressed concerns that the new joint venture could reduce financial aid from international donors. He said that the Telecom­mu­ni­ca­tions Ministry should think about “political geography” and the long-term future before making an agreement with the private company to establish Cambodia Telecom.

But So Khun also disputed that point.

“We haven’t had any negative reactions from international donors on the deal,” he said. “I don’t think it’s going to be a problem.”

Despite differences of opinion on the deal, So Khun said Tues­day that Keat Chhon has agreed to form an inter-ministerial committee to study the privatization issue in the country’s telecommunications sector.

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