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Source: www.asiaecon.org |

TELECOMMUNICATIONS INDUSTRY IN CAMBODIA


Cambodia has made significant gains in the information and technology sector in the past decade, but there is still much work to be done. As far as telecommunications go, Cambodia is essentially cut off from the rest of the world. Their cell phone and Internet networks are far behind the rest of the region and there is little centralized authority controlling the process.


Cambodia has made significant gains in the information and technology sector in the past decade, but there is still much work to be done. As far as telecommunications go, Cambodia is essentially cut off from the rest of the world. Their cell phone and Internet networks are far behind the rest of the region and there is little centralized authority controlling the process.

The cellphone market in Cambodia has exploded as of late, but compared to neighboring countries, they are still far behind. As of the start of 2009, Cambodia had 2.6 million cell phones, accounting for about 18 percent of the population, of which the majority were located in the capital, Phnom Penh. This is an impressive growth considering only 1 million cell phones were in use in 2005, but as of 2008, over 3.6 billion cell phones, approximately 55 percent, were in use worldwide. Furthermore, its nearby neighbors have high market penetration, such as the Philippines with 71 percent and Thailand with 78.5 percent. Even Vietnam has a significantly larger cell phone market with 40 percent of the country accessing cell phones.

In addition to its low cell phone penetration, existing service is extremely unreliable. Many consumers complain of failing calls and intermittent service, particularly when calling between the three major networks.

But compared to its Internet service, Cambodia’s cell phone market is massive. As of June 2008, there were only 40,000 citizens with Internet access, a mere 0.5 percent. Besides Myanmar, East Timor and Bangladesh, Cambodia has the lowest Internet penetration in all of Asia. Even Africa, considered as having the worst Internet penetration in the world, has an average of 5.6 percent.

The main problem with expanding Internet service is the lack of a national fiber optic network. Those without access to the fiber optic network rely on slow, erratic and expensive satellite coverage. Average monthly prices for satellite coverage in Cambodia run at $89, while commensurable service in neighboring Vietnam costs only $17.

Currently, there is no singular governing body to regulate the telecommunications industry. Instead, it falls under an edict and is administrated by the Ministry of Posts and Telecommunication. The lack of a central controlling authority lends to poor licensing agreements, regulations and a complete lack of centralized telecommunication laws. Furthermore, it leaves a large amount of politicking between the three largest service providers. Lawmakers, pushing for some form of centralized power, argue that the telecommunication industry’s lack of a centralized command allows for a lot of dirty business. Companies have been known to restrict access to rival networks and even block international calls.

Recently, the World Bank and the Asian Development Bank have addressed the problem. As large financial donors to Cambodia, they are both troubled with the lack of regulation. There is little doubt that strong communication infrastructure is paramount for achieving success in developing countries. Both the World Bank and the Asian Development Bank have released reports pushing for improved regulations in order to increase competition and service, which will ultimately benefit the consumers and the economy. But as of yet, there have been no laws or mandates issued.

Despite the lack of regulation and the current financial crisis, many cell phone companies, both domestic and international, are extremely bullish in their 2009 development plans in Cambodia. Most domestic companies are planning massive cell phone expansions, and many international companies are planning to enter Cambodia to take advantage of the low cell phone penetration. One example is Vietnamese cell phone operator Viettel, who plan to attack the underutilized rural market.

Internet service will also commit large strides in the coming years, as $18 million worth of infrastructure was committed last month to bring cheaper and faster service to Cambodia. The plan calls for laying a fiber optic cable through Laos, into China’s Yunnan Province and a second cable will head west towards Thailand. The project, which plans to integrate the country economically and politically, will help Cambodia realize its goals of a connected future.

Although the telecommunications industry in Cambodia is very small, it is expanding drastically. From 2000 to 2008, Internet usage grew by 1,200 percent, and in 2007 alone cell phone usage surged 49 percent. As long as the government does not impede the creation of a singular governing body to control telecommunications, there is no reason Cambodia cannot catch up to its neighboring countries in the next decade and increase its global competitiveness.


Source: AsiaEcon.org
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Source: www.asiaecon.org |


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