State Regulator Warned Smart Over Luring qb Subscribers

The Telecommunication Regulator of Cambodia (TRC) last week warned mobile operator Smart that it could face legal action for attempting to lure customers away from rival operator qb, and ordered Smart to resolve the issue “immediately,” according to a letter from TRC to Smart’s CEO obtained Tuesday.

The letter, dated May 19 and signed by TRC chairman Mao Chakrya, was sent the same day the Phnom Penh Municipal Court ordered Smart employees and partners to cut off contact with qb customers, and to cease advertising aiming to lure subscribers away from qb.

Smart, Cambodia’s second-largest mobile operator by subscribers, improperly tried to attract subscribers away from qb, one of the country’s smallest operators, the letter says.

Qb has accused Smart of damaging its reputation and financial interests after the two firms agreed to terminate a long-standing agreement that allowed qb customers to tap into Smart’s network when they were roaming. Before the termination agreement was carried out, qb began receiving calls from customers who said that Smart was contacting them to switch to Smart’s network.

“Smart did not provide the truth and did not have permission from CADCOMMS [Cambodia Advance Communications Co.] in compliance with the law to attract clients…aiming to violate the rights of individuals or legal persons protected by law,” the letter says.

Smart is part of the Malaysia-based Axiata Group Berhad, while qb is the brand name of Saudi-owned Cambodia Advance Communications.

The letter goes on to say that Smart violated sections of Prakas 206 on network interconnection, which regulates domestic roaming agreements. The letter tells Smart to immediately stop luring qb customers and damaging qb’s reputation.

It also tells Smart to resolve the issue with qb and explain to TRC the implementation of the roaming agreement.

“Resolve with CADCOMMS immediately the improper activities, which are contrary to the stated law and be responsible for the law in effect when CADCOMMS files a complaint to claim the legal person’s rights and rights of civil status as stated in the law on civil code of the Kingdom of Cambodia,” it states.

A source with direct knowledge of the proceedings, who declined to be named because of the sensitivity of the matter, said Tuesday that qb will pursue civil and criminal charges against Smart because the larger operator had “jeopardized qb’s total shareholder investment,” which is estimated at more than $120 million.

“If they succeeded in what they set out to do, then qb would be with no customers and no revenue,” the source said.

Smart CEO Thomas Hundt declined to comment Tuesday. Michael Fitzpatrick, qb’s chief marketing officer, said qb is waiting to hear from Smart before making its next move.

“As far as I am aware, we had no official response from Smart. So we’re just waiting for them,” he said.

Smart merged with Axiata-owned operator Hello last year and claims to have more than five million subscribers.

Qb has about 500,000 subscribers.

[email protected]

© 2014, All rights reserved.