“But through mid-2009, there have been no such kind of investments,” said Yun Heng, deputy director of the CDC’s department for evaluation and incentives in investment.

In 2008, investors brought in money for giant city construction projects, garments and tourism, most of it from China and South Korea, Cambodia’s top two investment partners.

And with investment from both countries declining, the overall investment figures dropped severely.

Fixed investment from China dropped from $3.86 billion to $242.4 million between mid-2008 and mid-2009. In that period, investment from South Korea dropped from $258 million to $109 million. At the same time, investment fell $6.8 million from Taiwan and $4 million from Britain.

The downturn hit tourism hard, according to the CDC, dropping from $4.1 billion to $354 million in the mid-year periods. Industrial investment fell $152.1 million, and in telecommunications and services $137 million.

Agricultural investment rose during the yearlong period, up by $260.5 million in mid-2009. And while large investment projects have declined, there are many smaller projects on the increase.

Russian investment rose from $9.5 million to $234.7 million, and Thai investments went from $22.8 million to $178 million. Vietnamese investment climbed by $97.5 million, along with a rise in Singaporean investment of $41.8 million.

Lee Bien Cuong, the commercial councilor at the Vietnamese Embassy, said that companies in his country were interested in Cambodian investments in spite of the economic crisis.

“The relationship between Cambodia and Vietnam is getting better, so more and more Vietnamese companies are investing in Cambodia,” he said.

This year has also seen the addition of new investors, including those from France, Spain, Japan, Indonesia and Hong Kong. There were no investors from Canada, the US, Malaysia or Australia, as there had been in 2008.

Yun Heng said the mid-year figures were not a negative sign overall, and he expects the number to grow next year.

(the original source is from VOA news)

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According to the Cambodia Economic Watch, the rubber sector is expected to post a negative 2.6 percent growth rate in 2008 because old growth rubber trees have been replaced either by new trees that are still too young to produce raw rubber or other crops. Rubber growth is thus expected to remain flat in coming years.

Due to the effect of the world economic slowdown, the price of dry rubber has declined to US$ 1,300 per ton in the international market and US$ 1,200 per ton in the domestic market, but the price of bottom line for Cambodian rubber planters was US$ 700 per ton.

According to the official figure, Cambodia has 110,000 hectares of land to plant rubber trees. And the number is expected to increase up to 150,000 hectares in 2015.

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“We expect that the NRMA will be able to export 12,000 tonnes of milled rice to France this year,” NRMA President Tes Ethda said.

But he said many challenges remained to increasing rice exports – not least, competition from Vietnam, which sells milled rice for between US$325 and $360 per tonne. The rice sent to France cost an average of $450.

“I think that European markets need both quality and quantity, and there are many more ways that Cambodia needs to reform in order to compete,” he said.

Last year the NRMA set aside 20,000 tonnes of unhusked paddy rice, which they plan to mill and export.

Thon Virak, deputy director general of the Ministry of Commerce’s General Department of Foreign Trade, confirmed the NRMA’s export of rice to France, saying “200 or 300 tonnes” of rice were being exported each week. On Sunday, Minister of Agriculture Chan Sarun said that in 2009 Cambodia still had over 2 million tonnes of rice in stock that would be used to bolster its exports.

“The government is trying to look for markets to export rice abroad, as exporting more rice is a way of encouraging farmers to increase rice productivity,” he said.

(The original article is extracted from The Phnom Penh Post)

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Mark Hanna told the Post that the Royal Group – which owns a 38.5 percent stake in Mobitel – has been in negotiations with Canada-based Research in Motion (RIM), which manufactures BlackBerries, ahead of a Cambodia launch later this year.

“The board has approved it,” Hanna said, referring to the proposed handset deal with technology manufacturer RIM.

BlackBerries are to be sold in the Kingdom on a subscription basis that Hanna admitted would see retail handsets sold initially at a high cost.

BlackBerry requires that the phone service providers pay a subscription fee for each handset on the network, a cost that Hanna said would inevitably be passed on to the consumer.

Mobitel must also invest in a BlackBerry email server, he added, a  fixed cost that could be absorbed through developing the subscriber base over time.

“The more subscribers you have, the cheaper it [a BlackBerry] is,” said Hanna, adding that the company is yet to finalise its BlackBerry retail prices.

Mobile expansion
Mobitel last month received US$100 million in loans – $40 million from the International Finance Corporation and $60 million from private foreign banks – which the company plans to use as part of a $350 million expansion program over the next three years, it said.

The company said it will launch a range of new products and services during this period, including the Blackberries, as it seeks to consolidate its dominant position in the Cambodian mobile phone market, which has become increasingly saturated with the addition new operators, including Viettel which launched officially in February.

The company already holds a 55 percent market share, with Camshin the second-biggest operator with about 18 percent.

BlackBerries, which offer 3G mobile services including email, have already been launched in most ASEAN countries except for Brunei, Myanmar and Laos, according to the BlackBerry website.

Strong BlackBerry sales
RIM has defied a general slump in the mobile phone industry following the global financial crisis, announcing strong financial results on Thursday.

Sales are projected to reach $3.5 billion in the period ending May 30, Bloomberg reported, which prompted shares in the telecoms company Friday to surge the most since December 2003 on the Nasdaq.

(The original articles is extracted from the Phnom Penh Post)

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The subdecree was drafted by the Ministry of Economy and Finance in accordance with the Law on the Issuance and Trading of Non-Government Securities, which was passed by the National Assembly in October 2007.

The objective of that law, according to the website of the Securities and Exchange Commission of Cambodia (SECC), is to outline regulations for the exchange as well as for “operators in the securities markets who trade or provide financial services”, including “public limited companies or registered legal entities that issue securities”.

The subdecree details procedures related to the management and control of securities in Cambodia in line with the International Organisation of Securities Commissions, an organisation of securities and futures markets regulators, according to a Council of Ministers press release issued Friday. The release states that the procedures are designed to ensure that the exchange operates “fairly, effectively, transparently and orderly”.

SECC Director General Ming Bankosal said the approval of the subdecree would allow for the implementation of the October 2007 law.

“Only with this subdecree can we issue regulations to control this sector,” he said Sunday. “The subdecree will allow the SECC to authorise the establishment of the stock exchange and the listing of companies on the stock exchange. If there is no subdecree, everything will be bogged down and would not go forward.”

“Now that the subdecree has been approved, the SECC will prepare regulations such as a relevant prakas to inform companies about requirements to list on the stock market,” he said.

The project director for the Korea Exchange (KRX) in Phnom Penh – the organisation working with the Cambodian government to establish Cambodia’s exchange – said that the subdecree was an important step towards implementing the initiative, which was scheduled to be launched by the end of the year.

“This is critical for Cambodia’s financial markets … a bond market will do a lot to help companies to raise capital,” said Inpyo Lee. He added that state-owned enterprises are hoping to float bonds on the new market.

The SECC, to be chaired by Minister of Finance Keat Chhon, is scheduled to launch officially on April 29.

(Original article is extracted from The Phnom Penh Post)

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But with 11 mobile operators currently licensed in Cambodia, eight of which are operating, industry insiders say consolidation is likely once the market settles and the sector starts to mature.

“Cambodia provides a unique opportunity,” said Syed Azmeer, chief marketing officer of mobile operator Hello. “If you look at the whole Mekong Basin or Indochina markets, this is one of the last untapped markets.”

Hello, which is owned by Telekom Malaysia International, launched its new 081 phone prefix last month, and Azmeer said economic development and a heavy investment in infrastructure would drive the sector forward. “We’ve seen a good uptake in the last two years. We have a lot more people who can afford to own a phone now,” he said.

Thomas Hundt, the CEO of Smart Mobile – a local subsidiary of Russian firm Latelz Co Ltd, which became Cambodia’s eighth operator when it launched in February – said prospects for growth were “significant”, and would compensate for any downturn in the global economy.

“Despite the economic crisis, Cambodia is still developing. In countries where development is taking place, telecommunications is one of the vital drivers,” he said.

Room to move
Despite the heated competition in the Cambodian market, Hundt said that “poor” customer service levels and an undistributed market gave a lot of room for operators to carve out their own niche. “Despite the fact that there is a clear market leader, there are still significant developments to come in all dimensions of telecommunications,” he added.
“There is a lot of potential and a lot of investments have been made.”

While mobile phones have become ubiquitous in Phnom Penh and the major provincial towns, their presence conceals the fact that the market is still largely in its infancy.

Hello CEO Yusoff Zamri said although Cambodia had a SIM card penetration rate of around 30 percent, the figure overrated the true number of mobile users. He said that since many locals owned more than one phone, the estimated 3.8 million SIM cards in circulation translated to perhaps 3 million actual subscribers – leaving a market of nearly 12 million who are yet to enter the sector.

He added that Telekom Malaysia has invested “in excess of $100 million” in capital investments for the coming years, an indication of the company’s confidence in the sector.

Price war
But in an unsettled, price-sensitive mobile market, some say that eight operators – leaving aside the three players that have been issued licences by the government but have not yet launched services – will saturate the local market and that local costs, while a benefit to consumers, would drive down profitability.

“Eight operators is too many,” said Pasi Koistinen, CEO of Star Cell Mobile, owned by local operator Applifone Co Ltd. While low prices would be a boon for consumers, he said that there would be “no room” for new entrants, and that a price war would undercut companies’ ability to conduct profitable business.

Some sort of consolidation was therefore inevitable, he said, and the 11 licences would likely shrink as firms merged or bowed out of the market.

Indeed, Asia’s most developed economies have substantially consolidated local mobile operations: just three major state-owned operators make up the majority of the Chinese market, while Japan has five operators and Thailand four. Vietnam also has just four major players, although several new ventures are set to come online this year.

Hundt from Smart Mobile said consolidation would take place “in the medium to long term”, but its exact form was hard to guess.

“I don’t know any country in the world where eight or nine MP operators are in place,” he said.
One method, said Hello CEO Yusoff Zamri, was direct government intervention in the sector. Zamri said Cambodia could follow the same path as Malaysia, which had eight operators until the government stepped in and forced them to merge with one another.

“What the government did was to force the companies to consolidate and let them talk amongst themselves and [work things out]. A couple years later, the number went down to three,” he said. However, he added that consolidation depended largely on how willing the government was to intervene in a freely competitive market to “push” for consolidations.

In an interview with the Post March 23, So Khun, Minister of Posts and Telecommunications, acknowledged that there were natural limits to the number of operators who could profitably operate in the domestic market, but that its international free trade obligations prevented it from forcing companies to consolidate. “I think Cambodia should have only three mobile service providers, but we can’t limit the number we have as Cambodia is a member of the World Trade Organisation,” he said.

Mao Chakrya, director general of the ministry, said the government would let open competition determine which operators prospered.

“The market is still there because penetration is still low, and the operators can see this,” he said.
How the sector will settle over the next 10 years will be determined in large part on how operators can differentiate their services from one another.

Aside from the standard virtues of value for money and reliability, another potential frontier is technological innovation. With the launch of the qb (pronounced cube) network last March, 3G mobile internet services were pushed to the forefront of the Cambodian market.

Mao Chakrya said three operators – MobiTel, qb and M-Fone – were operating mobile internet services, and Hundt said Smart Mobile would introduce a 3G service later in the year.

Azmeer from Hello said the adoption of new electronic credit top-up technologies would increase the willingness of people to adopt mobile technologies.

“What’s important here is the synergy between the bank and the telco,” he said, adding that Hello was the first company to give its customers access to Wing services.

“We have the capacity and the security on the network to provide that [service].”

Source: The Phnom Penh Post

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In an interview with the Post, Mao Chakrya, director general of the General Department at the Ministry of Posts and Telecommunications, said the arrival of three new companies was on the horizon, including two joint-venture companies – one Russian-Cambodian and the other Chinese-Cambodian.

He said he was not familiar with the details of the third company, and he would not say how soon the companies were expected to begin operations in Cambodia.

According to GSM World, an association of telecoms companies around the globe, Russian company Sotelco, with a dominant 90 percent share in a partnership with a local company, is expected to launch its mobile service in Cambodia in June.

Mao Chakrya said he was confident they would stay financially afloat.

“If there wasn’t business potential for them here, they would not be investing,” he said. He expected increased competition following their arrival would push down prices for consumers.

Minister of Posts and Telecommunications So Khun confirmed three new licences had been issued, but was weary of their contribution to the local market.

“I think Cambodia should have only three mobile service providers, but we can’t limit the number we have as Cambodia is a member of the World Trade Organisation,” he said.

With a population of just over 14 million, Cambodia is awash with eight telecom operators already. Cellcard Mobitel has the lion’s share of the market, which was equal to 55 percent at the end of last year.

Millicom International – the company that has a stake in Cellcard Mobitel – says that the market is expected to expand rapidly.

With a density of 29 percent by the end of 2008, ownership of mobile phones is expected to increase to 46 percent by 2012, the company’s annual report for 2008 said.

Following the entrance of the three new operators, the country’s GSM frequencies of 900 MHz and 1800MHz would be full, preventing the arrival of new companies unless the network capacity was expanded, said Mao Chakrya.

Source: The Phnom Penh Post

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There were 2,744 new business in 2008 registered with the ministry of commerce, 2,826 new openings in 2007 and 1,670 new openings in 2006. In the first month of 2009, there were 159 new business registered with the ministry which puts Cambodia on pace to register only about 1,850 new business this year.

The ministry’s data reported that in the period from 1988 to Jan 30, 2009, 18,910 businesses opened but 1,561 businesses closed their door.

Commerce Ministry of Secretary of State Chan Nora quoted by the Cambodia Daily said that the global economic slump would not be a factor in this year’s new business openings. He added that “the world financial crisis is not the cause of slow registration because businessmen always compromise for the long term.

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