[PHNOM PENH POST]
EMPHASIS on organic growth in Cambodia’s overcrowded mobile market may
have waned as consolidation is increasingly viewed as the best path to
growth, according to one industry insider.
While Axiata-owned
Hello has launched a spate of promotions to attract customers since
February, few of its competitors followed suit, its Chief Executive
Officer Simon Perkins said.
“I think what we’ve seen is the appetite for the fight weakening,” he said.
“So we’ve come up into this number-three position fairly strongly because the others haven’t responded.”
Hello’s
fight for customer attention – in a market that comprises eight
operators – has been largely focused on price cuts and the introduction
of new phones, Perkins said.
Handsets have become “very
effective as an acquisition mechanism,” he said, especially dual SIM
phones. The firm has also introduced fixed line phones, aiming at a
rural and SME demographic.
However, Hello has also successfully marketed high-end models like the Blackberry Torch.
The
company is promoting services such as roaming for prepaid and data
subscribers, in addition to adding more and more post-paid corporate
customers, Perkins said. Hello now counts ACLEDA, Naga and Microsoft,
and a number of Chinese mining companies, among its enterprise clients.
Perkins
chalked up the relative silence in the mobile market to several
factors. He said Metfone, the sector’s largest player by subscriber
numbers, would see a noticeable drop in its revenues if the company were
to offer the same level of price cutting given by Hello.
The
Ministry of Post and Telecommunications’ figures for April showed
Viettel’s Metfone as having 5.7 million active subscribers, versus 2.9
million for Mobitel’s Cellcard and 1.18 million for Hello. As a result,
Perkins said his promotions have a smaller impact on revenues.
“It’s a bit less of an issue for us,” he said. “I can do it as a challenger.”
However, some in the industry questioned whether deep discounting would prove successful.
Smart
Mobile Chief Executive Officer Thomas Hundt yesterday acknowledged that
Hello had held promotions since February, but said “the sustainability
of some of these promotions is however very much questionable.”
Smart
held a number of promotions and activities fostering continuous growth
in recent months, he said, adding the firm had exceeded one million
subscribers.
Meanwhile, Perkins said Royal Group’s attempts to
sell a majority stake in Cellcard hadotherwise distracted the company
from growing its business, adding that would change if a deal was
completed.
However, Mobitel General Manager David Spriggs
yesterday pushed back against those statements, saying the firm actively
worked to strengthen its market position.
“We continue to market
very aggressively within the regulations set by the MPTC. We’re
offering competitive services to all our customers,” he said, adding
Cellcard has seen no drop in its customer base.
Hello would need
to make a sizable acquisition to overtake Mobitel and the industry’s
number-two spot, Perkins claimed, saying his firm couldn’t grow enough
organically to do so.
He said he hadn’t ruled out a possible
purchase of Mobitel, but “criteria about corporate governance must meet
all the requirements for a listed business” before that happens.
Among
the mobile sector, Perkins pointed to Thaicom-held Mfone as an “ideal
fit” for Hello, though he doubted the company was properly valued right
now. He said he would take another look at Mfone after Thailand’s
elections in early July.
Cambodia should have only three or four telecom firms given the country’s small population, according to Perkins.
Going
forward, consolidation – or closing shop entirely – may be the only
option for some of Cambodia’s mobile companies, as he doubted they were
generating a profit, he said.
“What’s stopping them doing that? It’s difficult for people to concede defeat.”
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