August 24, 2011

Metfone’s major fibre expansion

[PHNOM PENH POST]

Metfone has claimed to control more than 80 percent of Cambodia’s fibre-optic network, allowing it to reach every commune in the Kingdom.

The firm said it contributed 16,000 kilometres of fibre-optic backbone to Cambodia’s total of about 20,000 kilometres, citing a February report from the Ministry of Posts and Telecommunications. The last 20 percent was split between Telecom Cambodia and Cambodia Fibre Optic Communication Network Company (CFOCN), the company said.

Metfone, which is owned by Viettel, a subsidiary of the Vietnamese military, claimed its cable deployment, all of which has been done since the company received an investment licence in 2006, was “13 times as high as the total national optical backbone developed by the whole country during previous 10 years”.

“Metfone is currently the owner of the biggest capacity and largest coverage fiber network in Cambodia,” Metfone said in a statement released earlier this month.

While Metfone Managing Director Nguyen Duy Tho did not return requests for comment, insiders were mixed as to the legitimacy of the company’s numbers.

Minister of Posts and Telecommunications So Khun said Metfone’s coverage was likely to be about 80 percent of Cambodia’s total network of fibre.

CFOCN CEO Steven Cao estimated the number for Viettel was probably between 10,000 kilometres and 15,000 kilometres.

CFOCN holds about 5,000 kilometres of cable, he said. Telecom Cambodia Director General Lao Saroeun this week said the state-owned firm owned over 1,000 kilometre.

Cao likened Metfone’s reported fibre-cable numbers to those of its mobile subscribers. Where Metfone claims 8 million subscribers in Cambodia, Cao said the number was closer to 4.7 million.

Heath Shan, CEO of Cambodian wholesale fibre provider NTC, rejected that comparison. He said the Kingdom’s fibre network was quantifiable, while industry insiders have often called into question the veracity of domestic subscriber numbers.

Given those figures, he said the Kingdom’s total fibre network may in fact be larger than the ministry’s February report claims, possibly as high as 25,000 kilometres but likely closer to 22,000 kilometres.

Shan noted Metfone’s boast of reaching all of the Kingdom’s communes was one of choice, as other companies have focused instead on more commercially viable urban areas.

He said the return on investment for such an extended network was “extremely long”. Also, a number of companies were looking to wireless technology as an alternative to fibre in these areas.

Analysts called Metfone’s early push into the Kingdom’s over 1,600 communes a preparation for the eventual arrival of third-generation wireless, or 3G, services there.

Marc Einstein, industry manager for Frost & Sullivan’s information and communication technologies practice in the Asia-Pacific region, said Metfone is “getting its network ready for future growth”.

The company’s move will allow Metfone to run a stronger network, one that’s faster and cheaper for consumers than competitors and offers the capacity needed for 3G services.

“I think it really does show Viettel means business in the country, and that’s going to make it harder for these other companies,” he said.

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