Govt sets tariffs in bid to end telecoms feuds

December 12, 2009

New regulations also designate limits on promotional tariffsTHE government has taken what it considers a conclusive step Wednesday to end a price war it says has been undermining profitability in the mobile-phone sector and eroding government revenues by setting a minimum tariff operators can charge customers.

Under the terms of an inter-ministerial prakas, or edict, signed Monday by the telecoms and finance ministries but not released until Wednesday, operators will not be able to offer calls below US$0.045 per minute, not including taxes.

Calls across networks cannot be offered at less than $0.0595 per minute under the edict signed Monday by Minister of Posts and Telecommunications So Khun and Minister of Economy and Finance Keat Chhun.

So Khun said the prakas will also bring to an end dominant mobile-phone operators’ practice of blocking calls from customers of competitors, although he refused to name those most responsible for the practice.

Those blocking calls from other operators risk losing their licence and being forced to pay compensation to affected parties and the government for any revenues lost as a result, he said.

“This directive is absolute and makes sure that all operators live together in harmony,” So Khun said.

However, the prakas allows operators to offer discounted rates and calling specials, including free minutes, during special promotions with prior permission from the ministry.

Each promotion is limited to 30 days in duration, and prices cannot drop below 50 percent of the minimum tariff for within network calls during offers. Promotions on cross-network calls will not be allowed, according to the prakas.

Ministry Director General Mao Chakrya said there are no limits on the number of promotions each operator can offer each year. “There are a lot of holidays in Cambodia,” he said.

Operators have been given 15 days from Monday to ensure all advertising and calling plans are in line with the new rules, and all advertisements must be cleared by the ministry in future.

So Khun said the ministries developed the prakas only after efforts to mediate between operators over ongoing issues of pricing and interconnection failed.

“We have exhausted all means to resolve the problems, but it has not been successful,” he said. “These challenges could not be addressed if the government did not intervene.”

The government has taken a raft of measures to bring order to the sector this year after new operators – Beeline in particular – began winning customer share from incumbents through discounted calls.

The incumbents accused the newcomers of price-dumping, while the new entrants in turn accused the major players of blocking access to their networks.

Measures include a prakas on interconnectivity issued on October 5 setting out a new framework for calls across networks, a September 29 inter-ministerial circular warning operators to desist from any activities that destabilised the sector, and a government order signed by Prime Minister Hun Sen on October 21 threatening to revoke the licences of operators found guilty of blocking calls.