Channel heat on in Cambodia

Small IT resellers in Cambodia are facing increasing competition in a freer market as the developing Asian nation enters its seventh peaceful year after Pol Pot’s death in 1998.

Cambodia is recovering from some 30 years of war against extreme Maoist insurgency the Khmer Rouge -- led by failed university student Pol Pot. In 1975, the Khmer Rouge took over the country, abolishing money, executing dissidents and intellectuals, blowing up banks, schools and hospitals and forcing all urban-dwellers into rural labour camps.

Research suggests between one million and three million Cambodians were killed in a genocidal rampage lasting until the Khmer Rouge was overthrown in 1979 by invading Vietnamese forces.

Today, Cambodia’s capital Phnom Penh is a faded, poor, but still beautiful city, home to a rapidly growing population and reviving commercial sector with a passion for technology.

Sok Chiv, managing director at Samey Thmei Hand Phone Shop, a mobile phone reseller with a small store in central Phnom Penh, said his current family-owned and run shop had grown “quite a lot” in its seven years of operation.

“When we first opened, business was minuscule,” Sok said.

Today, Samey Thmei carried new and refurbished or second-hand product from “all leading brands”, including Nokia, Samsung and Motorola. GPRS offerings from China were very popular and an embryonic market for 3G existed in Phnom Penh, he said.

“Most people buy second-hand. New is quite expensive,” he said.

Sok estimated that about 70 percent of the Cambodian population now had access to a mobile phone. Prepaid plans using US$5 cards were most popular, with prices for GSM or CDMA access to networks such as Camshin costing around 400 riel (about A$0.14) a minute.

Cambodia effectively has three currencies. It uses its own currency, the riel, interchangeably with US dollars and in western parts of the country, the Thai baht.

Many major electronics vendors offered limited, if any, support to Cambodia in-country. As a result, most resellers offered post-sales support and service for all brands themselves, he said.

However, competition had increased to the point where Sok -- who had first started selling mobile phones at a market stall -- now felt further expansion would be difficult.

There were now as many mobile phone resellers in Phnom Penh as motorcycle taxi drivers. “Business is not so good now. There are many shops,” he said.

Leong Sadai, a sales manager at Born Khemara, a small mobile phone retailer near Phnom Penh’s central market Phsar Thmei, said Nokia was by far the most popular brand with Cambodians, due to the brand’s features and reliability.

Born Khemara stocked phones by Panasonic, LG, Siemens, Motorola and OK WAP, mainly brought in by local distributors that made the rounds of all the shops and stalls in Phnom Penh on a semi-regular basis, Leong said.

Inventory was therefore sometimes unreliable, with stock replacement delays lasting from several days to several weeks, she said.

Sales of all mobile phones were modest but growing all the time, she said.

“We sell five some days and some days, seven,” Leong said. “Pictures are one of the most popular features.”

Most customers were relatively young, she said, and prices were negotiated according to the customer’s ability to pay. A good discount might be as much as US$5 or US$10.

Meanwhile, telecommunications competition in Cambodia has been queered by the presence of outlaw phone companies that set up telephone antennae near the Thai border and pay Thai companies some US$200 a month to illegally tap into the cheaper Thai phone networks.

A report in the Phnom Penh Post claimed last week that Cambodian officials estimate that government revenue losses of up to US$60,000 a month from more than 500 illegal antennae and relay stations operating across Cambodia’s western provinces five months ago.

The government had cracked down, the report said, but much illegal networking -- which included wireless access points as well as phone networking -- had been re-installed since January, the report said.

Hat Suven, sales manager at Rasmey CD, a software, games, DVD, CD and peripherals store nearby, said many shops had also to pay money to the police on an informal basis to stay open. Hat said Rasmey CD had paid US$10 a year to the police a couple of years ago when the shop first opened but no longer had to pay.

“Chinese software is number one, with [local brand] Cambodia Story second and US brands third [with Cambodian customers],” Hat said. “Football and shooting games are very popular.”

“But not so many people have computers yet,” he said. “Business is not good, not bad – somewhere in the middle. Sales are going up and down.”

Product quality from the local distributors was generally good. However, most people used public computers, such as at work or school for their IT needs, Hat said.

Fleur Doidge reported for CRN from Phnom Penh in February.