Internet costs to decrease

[PHNOM PENH POST]

DOMESTIC internet prices are higher than in neighbouring countries, though trends point to large decreases in costs this year, according to industry insiders.

Prices have already drastically reduced and quality increased, particularly over the past three years, said Ezecom Chief Executive Officer Paul Blanche-Horgan.

“As I have said many times before, the growth of Cambodia is dependant on accessible, affordable internet. As Ezecom doubled its speed twice last year and again 50 percent in February this year, I think we are doing our best,” Blanche-Horgan said.

One of the biggest problems in bringing better pricing to the Kingdom is balancing a company’s fixed costs with the scale of its business.

Where an ISP in Thailand or Vietnam may have millions of customers, a large ISP in Cambodia may have only a few thousand. It’s those economies of scale that force Ezecom to charge higher prices, he said.

“The numbers have got to go up to get prices down,” Blanche-Horgan said, adding Ezecom was doing everything it could to best serve its users.

A basic fibre optic connection, useful primarily for email and basic web browsing, starts at about US$25 per month, and reaches as high as $199 for faster speeds, according to websites for Cambodian ISPs.

Many companies list similar connection speeds, but insiders say actual speeds are often below what is advertised.

Meanwhile, Thai ISP True Corp offers faster download speeds than most Cambodia’s ISP plans, but does so for under $20 per month, according to its website.

True Corp’s upload speeds at this price point were comparable to the company’s Cambodian peers, the website said. But retail consumers are more likely to download content – such as video and music – than upload files of their own, local ISP officials said.

Cambodia Minister of Post and Telecommunications So Khun told The Post yesterday he thought the country’s internet prices were “acceptable”.

“In the future, it will cheaper than this … when there are many internet companies in Cambodia. The companies will compete on the prices with one another,” he said.

Sok Channda, Chief Executive Officer of the parent company of MekongNet ISP, offered a window into her company’s cost structure. Besides a major investment in fibre optic infrastructure, MekongNet pays a rental fee to Electricite Du Cambodge of $1 per street pole per month, she said.

If the distance from MekongNet’s base station to a customer’s home is 1 kilometre, the pole rental alone will cost the company about $35 a month just for that one customer, she said.

“This will add to the selling price as well,” she said.

Sok Channda also noted that Cambodian ISPs rely on neighbouring countries for their international connections, as most of the web browsing done here is for sites registered overseas, and companies must pay for those connections.

Online CEO Bill Merchent pointed to bandwidth wholesalers as an impediment to lower prices for consumers.

“They’re still charging us more than they should,” he said.

In the meantime, Cambodia’s ISPs are pushing to further develop the country’s network infrastructure, which would help to ensure better prices and better bandwidth capacity, he said.

Ezecom’s Blanche-Horgan said that prices for these international links had been “greatly reduced” in the past 12 to 18 months.

Also, Ezecom recently bought wholesale fibre company Telcotech, which held part ownership in the Asia American Gateway submarine cable network consortium. The AAG connects Southeast Asia to the United States along with other major fibre networks, according to Telcotech.

Blanche-Horgan said he expects internet “prices will reduce by year end,” while Merchent said a stable internet market would be reached in the coming months.