PHNOM PENH - The Minister of Telecommunications is defending a government decision to set a minimum price on cell phone tariffs. Critics say the new regulation will hurt competition in the telecommunications sector.
But speaking to reporters on Monday, Telecom Minister Prak Sokhon said the new prices would guarantee quality for consumers and prevent unfair competition. He also said the new minimum price would increase revenues for the government.
“When the price of a phone call is low, its quality is also low,” he said. “So users cannot have a phone call with high quality.”
The new floor for prices is 4.5 cents per minute for calls made within the same network, and 5.95 cents per minute for calls across different networks. The prices come from a 2009 resolution that was issued as a directive from the Council of Ministers last week.
Cambodia has 19 million mobile phone subscribes in 2012, a fivefold increase from 2008, according to government figures. In a country of 15 million, that means many Cambodians have separate accounts, taking advantage of the competitive deals offered over the years by the country’s seven mobile phone companies.
Chou Vichet, secretary of state at the Ministry of Finance, said the government only earns about $20 million per year, due to the competition and low prices among the nation’s carriers.
“The number of subscribers has increased, so the state’s revenue also should have increased,” he said. “But in reality, it has not, or increases are very low over the last five years.”
Last week’s directive follows a similar order in April, which demanded that carriers end promotions to their subscribers, an order that was quickly rescinded after heavy criticism from the public, including an outcry over Facebook.
Chan Sophal, an economist, called the new directive “irrational.”
“Setting a minimum price is not good for the users, and it does not prevent a monopoly,” he said. “As we have seen over the years, when there is severe competition, there is no monopoly.”
If the government wants to increase its tax revenues, it should look to the rich, he said, not the price of phone calls.
But speaking to reporters on Monday, Telecom Minister Prak Sokhon said the new prices would guarantee quality for consumers and prevent unfair competition. He also said the new minimum price would increase revenues for the government.
“When the price of a phone call is low, its quality is also low,” he said. “So users cannot have a phone call with high quality.”
The new floor for prices is 4.5 cents per minute for calls made within the same network, and 5.95 cents per minute for calls across different networks. The prices come from a 2009 resolution that was issued as a directive from the Council of Ministers last week.
Cambodia has 19 million mobile phone subscribes in 2012, a fivefold increase from 2008, according to government figures. In a country of 15 million, that means many Cambodians have separate accounts, taking advantage of the competitive deals offered over the years by the country’s seven mobile phone companies.
Chou Vichet, secretary of state at the Ministry of Finance, said the government only earns about $20 million per year, due to the competition and low prices among the nation’s carriers.
“The number of subscribers has increased, so the state’s revenue also should have increased,” he said. “But in reality, it has not, or increases are very low over the last five years.”
Last week’s directive follows a similar order in April, which demanded that carriers end promotions to their subscribers, an order that was quickly rescinded after heavy criticism from the public, including an outcry over Facebook.
Chan Sophal, an economist, called the new directive “irrational.”
“Setting a minimum price is not good for the users, and it does not prevent a monopoly,” he said. “As we have seen over the years, when there is severe competition, there is no monopoly.”
If the government wants to increase its tax revenues, it should look to the rich, he said, not the price of phone calls.
