[PHNOM PENH POST]
Revenues per user in Cambodia’s mobile phone sector will drop sharply
over the next five years, according to global research and consultancy
firm Frost & Sullivan.
The company said the average revenue
per user – ARPU, a key metric for the industry – would fall to US$3.68
in 2016 from $5.14 last year, as more and more lower-income Cambodians
adopted the technology and increased competit-ion drove down revenues.
“The
indication is that things will get worse,” Marc Einstein, Frost &
Sullivan’s industry manager for information and communications
technologies in the Asia-Pacific, said.
“Profitability growth declines over time in this industry.”
Einstein
said the trend could be one catalyst for consolidat-ion in the sector,
as less-profitable firms sought to merge with stronger competitors.
He noted that Frost & Sullivan’s figures were based on average revenue per SIM card, and not per person.
As
many Cambodians use more than one SIM card, Einstein estimated the true
ARPU figure might be 1.25 to 1.5 times higher than his listed
projections.
Mobitel chief executive David Spriggs said ARPUs
tended to decline as a company’s customer base grew, although this was
usually offset by the overall growth of the market.
Spriggs
agreed with Einstein, however, that intense pricing competition in the
sector, as well as the specific demographic of new customers coming on
line, had been the catalysts for ARPU declines in many markets. “It’s
normal in markets where the penetrat-ion is driven by reaching out to
lower-income customers that the average will go down,” he said.
Companies
could be forced to consolidate, cut their costs or stabilise their
pricing strategies in order to remain profitable in an environment with
declining ARPUs, Spriggs said.
Hello Axiata marketing director Rozy Laxana agreed that average revenues per user would decline.
“Promotion-driven
campaigns to attract new acquisit-ions and increase market share in a
highly competitive marketplace will result in ARPUs declining further,
fuelling the multi-SIM phenomenon to an even greater extent,” Laxana
said.
She predicted Cambodia’s mobile operators would face higher
churn rates and an increased cost of acquiring customers, leading to
lower ARPUs across the board.
As a result, operators might find
it more difficult to invest in new products and services, which could
affect Cambod-ian consumers as a whole, she said.
Laxana said she expected local operators would look to the mobile-data area for new revenue streams.
Richer content and an increasingly tech-savvy consumer base had served to fuel growth in that part of the business, she said.
“This
trend is also beginning to gain traction in Cambodia. At Hello, we have
seen a tremendous uptake in our mobile data and BlackBerry services
during the past year,” Laxana said.
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