August 22, 2011

Price cuts by Hello may prompt Thaicom's exit from Mfone


Steep price cuts by Cambodian mobile operator Hello may prompt Thaicom to sell its majority stake in Mfone, reports the Phnom Penh Post citing the investment firm Cambodia Capital. Cambodia Capital claims Hello's drop in tariffs this year has impacted Mfone's operations and those of other smaller operators in Cambodia. Hello, backed by Malaysian parent Axiata, has said it intends to remain in the market and drive out smaller operators. Cambodia Capital said that while it did not expect to see the effects of Hello's price cuts so quickly, the industry, and Mfone in particular, was already feeling pressure. Thaicom CEO Suphajee Suthumpun said recently that the firm was considering pulling out of Cambodia, where it owns 51 percent of Mfone, as well as Laos. Hello in the first half of this year introduced tariff plans charging a flat flee for unlimited monthly calls, which drew criticism from domestic rivals, who claimed this violated a Ministry of Post and Telecommunications order on minimum pricing per minute. The company has since defended itself, saying it pushed forward with its pricing plans only after the ministry refused to enforce the order as other operators were cutting prices. Hello CEO Simon Perkins downplayed the effect his price cuts were having on the industry. Mfone CEO Yap Wai Khee defended his company by claiming price competition had affected most telecommunication players in Cambodia, as at least part of the subscriber base is price sensitive. He said any effect felt by the industry was the direct result of companies choosing to not offer such low tariffs, which created a non-level playing field for operators.


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