When even nine [telcos] isn’t a crowd

[PHNOM PENH POST]

You could hear the collective sigh yesterday among Cambodia’s telecoms when news broke that Camintel would enter the mobile market late next year.

It was a sigh of frustration, however, rather than relief.

Camintel, a Korean-owned fixed-line company, will become the ninth mobile operator in a sector where profits are stretched thin (if they’re attained at all).

The number had shrunk to eight last summer when EMAXX bought perennial laggard Excell, but the sector’s much hoped-for consolidat-ion didn’t last.

Insiders and experts alike  agree the market can support four operators at most.

Yet another player has chosen to enter the fray, raising questions about Camintel’s competitive viability, given its offerings and the state of Cambodian telecoms market.

It’s not hard to understand why the company would make this move, as there is little growth to be had in the Kingdom’s fixed-line telephone business.

Cambodian consumers largely have no need for such a service, especially when third-generation wireless technology is readily available and relatively cheap.

The goal, therefore, was to capture that growing 3G consumer market, Camintel offic-ials said this week, as well as the broadband internet space.

But there’s a focus on the enterprise market, or corpor-ate customers, as well.

Camintel told the Post it would target banks, hotels and office buildings, aiming to sell what it called its fixed-line and mobile convergence plan.

This all-in-one servicing is supposed to represent Cam-intel’s competitive advantage once it goes mobile.

But the company is all but forced to focus on the enterprise market, as there are too few wealthy Cambodians to make the strategy financially viable otherwise.

And, of course, Camintel would not be the only comp-any with the ability to offer all-in-one services in Cambodia. Metfone, with its extensive network of fibre, could do the same, thereby eliminating that competitive advantage.

That’s to say nothing of a mobile firm that chooses to, say, buy Telecom Cambodia and compete directly with Camintel. So while Camintel seems to be thinking long term, that long-term focus seems to be the best that can be said about the company’s strategy.

Perhaps the company will surprise us a second time with an announced acquisition. We know Thaicom’s Mfone is looking for a buyer.

But Camintel has given no specific outline on how it will in fact operate once it enters the market. All we know is that a crowded market will remain crowded, making Camintel’s prospects – and those of some other struggling mobile operators – seem rather dim.

“The market is already a bloodbath, and it’s very tough to compete in that space,” says Frost & Sullivan analyst Marc Einstein, who offered his expertise for much of this column.

One wonders, then, who the winner is, given such excessive competition. Other than the consumer, of course, because the scramble for market share has delivered incredibly low prices to subscribers.

That has provided access to mobile phones for a large segment of the population that otherwise couldn’t afford them, which in turn benefits Cambodia as a whole.

The proliferation of mobile phone and internet services has been linked to gross domestic product growth.

However, there may be an even more obvious winner in this crowded market: the Ministry of Post and Telecom.

Sea Nareth, the MPTC’s director of radio frequency management and licensing, told the Post this week the ministry’s commitment to free markets meant there was no limit to the number of players that could operate in the market.

He did, however, predict that Camintel would be “the last player, as far as I can see”.

What he’s leaving out, though, is the near US$1 mill-ion the MPTC receives for a mobile licence. That’s cert-ainly an incentive to keep the sector crowded.