Executive summary
Hot competition continues in Cambodia’s mobile sector as market rationalisation begins
Cambodia has successfully managed its transition into a vibrant telecom market. Despite the country’s status as one of the least developed nations in the world and whilst it remains one of the poorer countries in Southeast Asia, Cambodia’s efforts to expand and upgrade its telecom infrastructure have certainly been bearing fruit. There was very little infrastructure remaining from before the tumultuous Khmer Rouge days. As a result, Cambodia bypassed rebuilding the fixed-line market and quickly launched into alternative technologies, jump-starting its telecommunications infrastructure with digital technology. Not surprisingly, mobile services have completely overwhelmed the market. By end 2010, there were nine mobile operators vigorously competing with each other in a market segment that was growing at a healthy rate. Coming into 2011 there were an estimated 8.4 million mobile subscribers (penetration 55%) in the country. The market was still in a very strong expansion phase as evidenced by the keenness shown by foreign operators seeking to be part of it. Most significantly some rationalisation had commenced in the market with two operators merging, thereby reducing the number of operators to eight.
Some limited fixed-line growth had earlier come about in Cambodia through investment under foreign assistance, but this mainly benefited the capital Phnom Penh and geographical coverage has not increased significantly since that effort in the 1990s. The number of fixed-line services remained relatively static for some years at around 50,000; by early 2011 the numbers were starting to edge upwards. In the absence of any substantial fixed-line growth, however, mobile telephone services continue to completely dominate the overall telecom market in Cambodia. In fact mobiles represent more than 99% of the total number of telephone services in the country.
Wireless technology has been especially advantageous for Cambodia in achieving rapid network roll-out and replacement of a fixed network badly damaged by 20 years of war. In addition to the thriving mobile networks, wireless local loop has been useful for rapid provision of a limited number of fixed-line services. However, while Cambodia has exemplified the fact that wireless local loop offers a viable option for rapidly expanding telecom access in developing countries with low levels of fixed infrastructure, the potential of this technology has yet to be fully exploited in the country.
The expansion of internet services has also been overshadowed by the mobile phenomenon. Internet uptake rates remained disturbingly low for many years, presenting one of the lowest penetrations in the region. Of course, the limited fixed-line infrastructure has been a major inhibiting factor in the rollout of both dial-up and ADSL internet services. The internet market started to change in 2007 when wireless broadband services first began to appear in a serious manner. There has been a surge in the number of operators interested in this particular form of broadband and especially WiMAX. By 2010 there had been a major upturn in internet numbers on the back of the increased broadband penetration. Overall penetration remained low, however.
The country’s telecom regulatory regime appeared in total disarray in 2010. Early in the year the licensed WiMAX operators were waiting on their frequency allocations from the government. But the MPTC awarded the same frequency bands to another operator. This triggered a long-running dispute that was threatening to disrupt the WiMAX market. Given the strategic importance of wireless infrastructure in Cambodia this was shaping as a major blow to the country. By early 2011 there appeared to have been some resolution of the problem.
Market highlights:
- Cambodia’s mobile market continued on its positive expansion path in 2010 and into 2011, although the annual growth was slowing;
- With mobile penetration of around 56% coming into 2011, the market has passed the eight million subscriber milestone;
- Cambodia had nine licensed mobile operators in a crowded, highly competitive market that invited questions about its likely overcrowding and the possible need for some sort of early rationalisation. The expected rationalisation had started in late 2010;
- The development of fixed-line services continues to languish, although the market has picked up a little momentum;
- The internet segment has also been languishing for some time, but there are promising signs that the widespread introduction of wireless broadband services will see a long-term surge in growth;
- By 2010 there was evidence that the anticipated surge was starting, after internet subscriptions grew by almost 100% in 2009.
Cambodia – key telecom parameters – 2010 - 2011
Category
| 2010 (e)
| 2011 (e)
|
|---|
Fixed-line services:
|
|---|
Total number of subscribers
| 60,000
| 67,000
|
Annual growth
| 11%
| 11%
|
Fixed-line penetration (population)
| 0.4%
| 0.5%
|
Fixed-line penetration (household)
| 2.2%
| 2.4%
|
Internet:
|
|---|
Total number of subscribers
| 45,000
| 55,000
|
Annual growth
| 32%
| 22%
|
Internet subscriber penetration (population)
| 0.30%
| 0.35%
|
Internet subscriber penetration (household)
| 1.7%
| 2.0%
|
Mobile services:
|
|---|
Total number of subscribers
| 8.4 million
| 10.0 million
|
Annual growth
| 50%
| 19%
|
Mobile penetration (population)
| 56%
| 67%
|
(Source: BuddeComm)
This report provides an overview of the trends and developments in the telecommunications markets in Cambodia. Subjects covered include:
- Key statistics;
- Market and industry overviews;
- Major operators (mobile and fixed);
- Regulatory environment;
- Infrastructure;
- Mobile market;
- Internet market;
- Telecom market forecasts for selective years to 2020.
Data in this report is the latest available at the time of preparation and may not be for the current year.
Peter Evans
May 2011
