CAMBriefNews: Cambodia telco growth in 3G

CAMBriefNews: Cambodia telco growth in 3G

Despite the hype surrounding the advent of fourth-generation mobile services, the bulk of growth and profits in Cambodian telecom remains in 3G networks, experts say.

A recent study by London-based research firm Ovum notes that emerging markets such as Cambodia will see rapid growth in 3G this year as providers become more reliant on 3G revenues.

“Mobile broadband growth will be the biggest opportunity for emerging market operators in 2012 . . . operators across all emerging markets will experience strong data connection and revenue growth in 2012 as users look to gain access to data services, the internet and mobile content and applications,” the report says.

The resulting gains in revenue will also become a more important measure of overall growth this year, Ovum says, moving Cambodian operators away from what have been much-disputed subscriber numbers.

The number of Cambodian mobile subscribers surpassed the country’s total population of about 14.5 million in November, according to data obtained earlier this month by the Post. Insiders, however, estimate the number at between six and seven million.

Mobile profits are alleged to be scarce in the Kingdom, if collected at all, although official data is not available.

3G was the fastest growing market in Cambodia in 2011, and the trend was set to continue this year, Mobitel chief operating officer Kay Lot said.

Voice services were still a big contributor to revenues, however, he said.

“Voice will continue to dominate for a couple of years, but as far as growth is concerned, data services will grow faster. The past 18 month have seen considerable growth in data.”

The average revenue generated per 3G user was significantly higher compared to voice subscribers, Smart Mobile CEO Thomas Hundt said this week.

The relatively high price of fixed-line internet connections and internet service protocols were driving demand for 3G in Cambodia, as the service had become available in almost every province, he said.

“Mobile internet . . . in Cambodia has far outpaced all other ways to connect to the internet,” Hundt said.

He said 20 per cent of Smart users subscribed to mobile services.

Other industry insiders have put the figure as high as 30 per cent.

The decline in smartphone prices has further driven demand for mobile internet in emerging markets, the Ovum report says.

Smartphone makers in Phnom Penh confirmed the increase in domestic sales.

Sales for Chinese brand ZTE smartphones increased by about 60 per cent last year, according to data provided by ZTE HK Cambodia.

The company attributed the climb in demand for smartphones to a drop in prices in 2011, as well as an increase in device capability.

The value of LG smartphone sales increased 30 per cent in Cambodia in 2011 compared to the year before, LG Cambodia representative Hor Hab said.

“More and more people, especially young professionals, are demanding data [services], mobile internet on the go . . . and the cost of mobile internet is getting more affordable,” he said. Although the price of 3G-capable phones had continued to fall, affordability in Cambodia’s rural market would challenge mobile internet growth this year, Hundt said.

About 80 per cent of Cambodia's population lives in rural areas, with the country’s per capita income about US$900 in 2011, according to estimates from the Ministry of Economy and Finance.

The Ovum report notes that many emerging market operators will begin to assess the market for fourth-generation services, which will provide a considerable increase in bandwidth to subscribers.

Few companies, however, will launch 4G networks, the report says.

During 2011, Cambodian mobile users heard claims for 4G service, but analysts have said domestic companies don’t yet have the technology to hit true 4G speeds.

By: PPPost