1

CHAPTER 2: THEORY OF LITERATURE REVIEW

In this theory of research which is concern into this chapter sector will explain general information and explore detail as related to research topic as know the telecommunication industry sector in Cambodia.

In this chapter will be introduce and providing explain background about telecommunication industry and insight Cambodia country such as function of development of economic sector with history of Cambodia. Other more are review of telecom service like are Telephone service, Radio service, Television service and Internet service etc,. Also talking more about the benefit of telecommunication in business with media as using insight of organization and more than is talking about ICT policies and development into ASEAN with Cambodia country, so those are all factors will be focus on and take us to know growth of economic in Cambodia by development of the telecommunication industry in Cambodia as well as we will be mention as below.

Furthermore, it’s in this chapter also explaining and explore are theory related to environmental that factor operation business and investment function in Cambodia which according to opening among who are businesses regarding telecommunication sector of Cambodia. So what are some important factors that influence such as government policy, environment of economics, political stability, infrastructure level, Foreign Trade Agreements, industry operation and development of major manufacturing industries which is leading to growth of economic in Cambodia country also it is influence to the growth of telecommunication industry during its telecoms business in Cambodia society so it will be explain detail follow.

Theory of Related to Research Customer satisfaction definition: In the consumer marketing community, customer satisfaction

has long been regarded as an important goal and marketing tool ( Reichheld & Schefter, 2000; Kotler, 2009). Customers are important for whatever business it is. A customer of a telecom service and other business it does not differ. The solving of personal problem (McMahon, 1992). Shieffer (as cited in Kotler et al. (2009) defined who is a customer and where she/he stands in business cycle-creating loyal customers is at the heart of every business. But customer with difference demographic, psychographic and socioeconomic has difference interest towards by service/product ( McMahon, 2009). And it is not the ultimate target of a business as cleared by Kotler et al. (2009) that through the customer centered firm

2

seek to create high customer satisfaction that is not its ultimate goal. If the company increases customer satisfaction by lowering its price or increasing its service, the result may be lower profit.

Customer satisfaction is divided into two levels: a transaction specific assessment and an overall assessment ( Karnjira, 2001). She further summarized the work of Oliver (1980-1981) of the first level of satisfaction that it is based on attitude and emotion reaction. And according to Taylor and Baker (1994) the latter level is based on experiences of a customer. Harris (1996) shared that customer’s perception comes from comparing past purchase and consumption experience with the current purchase.

In the study of telecom service, usually customer satisfaction is the felling of its members (customers) with the service and policy that are provides, they would like to satisfy if the service and policy of the telecom service are met at their expectations. On the other hand, if they are not met with expectation of members. Communication of telecom service has to adopt its service and policy in according to demographic, psychographic, or socioeconomic factors of the members wherein it operates.

Theory of analyzing customer needs and want (Kotler, 2012: 445). Many product or service as telecom service are consumer may choose the channels they prefer based on price, product assortment and convenience, as well as their own shopping goals ( economic, social, or experiential). As with products, segmentation exists, and markers must be aware that different consumers have different needs during the purchase process.

Related to social media ( Kotler, 2012: 569) social media are a means for consumers to share text, images, audio, and video information with each other and with companies and vice versa. Social media allow marketers to establish a public voice and presence on Web and reinforce other communication activities. Because of their day to day immediacy, they can also encourage companies to stay innovation and relevant. There are three main platforms for social media: (1). Online communities and forums, (2). Blog – gers (individuals and network such as Sugar and Gawker), and (3). Social network (like Facebook, Twitter and Youtube).

Taylor & Harpar (2001: 3). Showed that mobile phones were cultural artifacts, ‚seen as instruments through which elements of self and personhood within family and peer groups were demonstrated‛ today, technologies become more necessary for people in daily life, they become part of people’s life. A factor which is lower agreed by the respondents is, good government, the respondents did not agree that good governance of the government has result to the growth of telecommunication business in Cambodia.

Consumer behavior Concept (Regarding to Schiffman and Kanuk (2000). ‚The dynamic interaction of affect and cognition, behaviour and environmental events by which human beings conduct

3

the exchange aspects of their lives‛. Assumed that consumer behavior’s study focuses on how person make a choice to spend their accessible resourced including period of time, funds, and work on consumption items. Furthermore, these action are directly concerned on selecting, obtaining, using, and removing of goods and services with perceptions to meet their satisfaction.

2.1. Background of Telecom in Cambodia Background Cambodia has the unique distinction of being the first country in the world where the

number of mobile subscribers exceeds those on the fixed line network. A similar trend has been observed in many countries in the last five years or so, but in Cambodia this happened as early as in 1993. Sadly enough, for Cambodia, there have been other reasons behind this trend apart from the rapid advances in telecommunication technology and economics. The long civil war of the 1970s almost completely destroyed the existing small fixed line network, and made the replacement or augmentation of the fixed line network virtually impossible. The challenges of logistics and cost were huge. Mobile technologies came to Cambodia’s rescue, in a manner of speaking, since rollouts were much cheaper than fixed line networks as well as less time-consuming, and as extensive digging for fixed line networks was no longer necessary.

Cambodia also recognized early that it would need private funding to augment the sparse resources of the government and was quick to initiate extensive liberalization of all its telecom markets. The country also allows both local and foreign private investment, although the latter must not exceed 49 percent. Today, almost all its market segments including fixed lines, mobile phones, Internet etc., have several players that compete with each other. The market has seen dramatic growth in most segments, especially in the mobile phone sector. But, problems remain. The benefits of competition in the market, for example, lower prices, despite being clearly visible, could have been much higher if the experience of some other countries – e.g. India – is any indication. Largely, these relate to the fact that the regulatory framework necessary for a manifestly comprehensive transformation of the telecommunication industry was, in many cases, incomplete or even missing.

2.1.1. The Consumer Behavior of Mobile Telecommunication Subscription in Cambodia Mobile telecommunication plays an important role in increasing business productivities,

facilitating business interactions and improving economic efficiency in developing countries Consumers and businesses have found mobile telephone technology to be a value addition to their lifestyle and to create a significant increase in their welfares. In Asia Pacific, mobile industry has a profound collateral impact on society through communication efficiency, productivity efficiency and knowledge efficiency. It

4

has also been linked to the social initiatives to improve the quality and delivery of public sector services such as natural disaster assistance, mobile education programs, mobile health, welfare distribution and public safety.

Mobile telecommunication has significantly grown in Cambodia and by 2011 there were nine big mobile service carriers in the country. In 2008 87% of the population had access to mobile telecommunication network, as reported by the Ministry of Post and Telecommunication of Cambodia（MPTC. Some set up their networks only in urban areas or cities and only few have expanded mobile networks in some rural areas. There are many providers, yet consumers satisfy with any carrier. Switching from one carrier to another and subscribing few different operators at the same time are really popular in the country. It is not uncommon to hold three mobile handsets in Cambodia, while some handsets can be used as dual SIM at the same time 1 . Furthermore, Cambodia has been known one of the countries with widely mobile access with 131% of mobile service penetration in 2012 as compared to only 4% of fixed line service penetration. A new entrant carrier, Metfone, became the biggest one after spending three years in their operations while many incumbents held small market shares or had to merge with others carriers, reported MPTC. Unbalance between seniority and market share could be resulted from competitive advantages of each carrier to satisfy consumers ‘demands and requirements. Interestingly, Metfone announced itself to be the biggest supplier in mobile network coverage up to 98% of population by 2012 while others hold much smaller seize of network. Additionally, this big mobile operator has provided its customers with the most frequently competitive promotions since its first startup with the exclusive right to install fiber optic cable. These factors are some different points between successful and not-yet successful carriers in Cambodia. Therefore, understanding consumers ‘preferences are necessary for each mobile carrier to examine the strengths and weaknesses of others within the sector to improve their competitive strategies

The core objective of this paper is to explore the most prioritized diffusion and motivational factors, based on consumers ‘perspectives. It also aims to present barriers and requirements of mobile telecommunication in Cambodia from consumers ‘points of views measured by using the integrated research model of theory of planned behavior and some essential factors of diffusion of innovation Factors or requirements with highest priority are considered competitive advantages of carriers with hug market shares and loopholes/barriers of not-yet-successful mobile carriers to take actions. With lessons learnt from consumers ‘perspectives, each carrier can provide a more efficient operation to increase the total surplus of both suppliers and consumers, to improve market efficiency and to reduce digital divide. Consumers ‘preferences on any product and service are constantly changing, so consumer behavior can

5

describe how consumers make a decision about whether or not to purchase one good or service. In the book, Consumer Behavior, the three steps of decision-making include repurchase process, purchase process and post-purchase process. And indicates behavioral choices are influenced by both internal and external influences. Consumer behavior has been studied by many researchers with different methodologies and theories in order to measure the adoption, satisfaction, beliefs or behavioral intention of an individual’s decision on new innovations or new products.

This study suggests that intentions to take an action are influenced by four main factors, three of which are adopted from the theory of planned behavior. They include attitude towards behavior, perceived behavioral control, subjective norms, and the promotion item. The attitude towards behavior indicates an individual’s positive or negative feeling about their behavior and is composed of perceived usefulness, perceived ease of use, compatibility and price plan. The perceived behavioral control is an individual’s adoption of new ideas that one can control a particular behavior（. By compiling this with factors from diffusion of innovation, perceived behavioral control in this paper comprises four components, including resources availability network availability, technological support, and customer services）, technologies availability types of technologies, service quality, congestion, and up-to-date services）, opportunity availability knowledge or ability, time and resource to subscribe an innovation）, and network externality network effects resulted from change of the value of product or network to other users after a number of users of that product increases）. Subjective norm can be in the form of social factors made of internal decision process which is influenced by external environment, social factors, family, reference groups and culture（. Promotion factor is adopted from 4p marketing mix strategy product, price, place, and promotion）, and is used to examine how suppliers persuade consumers to purchase their products Dave, Fiona, Richard, & Kevin, 2006）. This study covers five aspects of promotion; advertising, personal selling, sale promotion, public relation, and direct marketing. This model can measure the driving forces behind consumers ‘decision about whether or not to subscribe to innovation adoption of mobile telecommunication in Cambodia. These drivers will be presented to identify competitive advantages, weaknesses of all carriers, and consumers ‘needs.

2.1.2. Institutional Framework of the Sector The Ministry of Posts and Telecommunications of Cambodia is in charge of all aspects relating to

telecommunications in the country. It not only regulates the behavior of other actors by being the policy maker, but it also is an active participant in the provision of telecommunication services in the country either directly as a service provider as in its small fixed line business, or indirectly, as a partner of/to

6

telecommunication companies. Customers cannot speak to their counterparts if they do not use the same service provider. A customer wishing to reach someone on a different network must use the many telephone cafes in the country, which maintain separate connectivity to diverse operators and allow customers to use it to connect to customers on networks that they cannot otherwise reach from their own phones. The lack of effective interconnection between operators is thus both a hassle and an additional cost to the end user. Mobile telephones provide connectivity to the large majority of Cambodian subscribers. The four players in the market mentioned in the table above have delivered substantial competition, and with that, significantly lower prices. With the availability of prepaid cards, the service enables its users, especially the young, to budget usage much more effectively

2.1.3. Electronic infrastructure The expansion of services in Cambodia will require better infrastructure, particularly in

broadband telecommunications. Cambodia has the lowest broadband connectivity in the region apart from Myanmar. This issue needs to be addressed, given that there is empirical evidence that suggests that broadband connectivity is a major contributor to economic growth. Cambodia’s institutional and regulatory framework in the telecom sector is not conducive to attracting foreign investors. Consequently, telecommunications services have grown at a meager 3 percent annually over the past seven years, compared with 18 percent annual growth for tourism.

More worryingly, Cambodia’s ICT infrastructure and connectivity are lagging behind those of other competing countries in Southeast Asia. Cambodia’s regulatory framework in telecommunications has been described as inconsistent and difficult to understand. A new regulatory body has been established as the supervisory authority in the sector, but influences from other government agencies may have an impact on its deliberations. A country-wide broadband strategy, combined with reduced regulatory and de facto limitations to foreign investment in the sector, may attract more investors. The adoption of a telecom law, in line with internationally accepted principles of telecom regulation, and in line with Cambodia’s WTO obligations, would provide legal clarity for telecom providers. The activities of the regulator should be transparent, and its technical ability enhanced.

2.1.4. Telecommunications Services International obligations Cambodia’s accession to the WTO set the ground for an open market

policy for the telecommunications sector, based on foreign participation and market competition. Cambodia also committed to establish an efficient regulatory framework, headed by an independent regulator. Value-added telecommunication services, including mobile services, were immediately opened up to full foreign participation. Cambodia also agreed to ban restrictions on the provision of cross-border

7

telecom services after 2009, and to open land-based basic telecommunication to foreign ownership, although domestic participation of up to a maximum of 49 percent may be required. It agreed to regulate the sector according to the guidelines of the WTO Telecom Reference Paper, including through safeguards to prevent anti-competitive practices, non-discriminatory access to interconnection, transparency of inter-connection arrangements, universal services, public availability of licensing criteria, and establishment of an independent regulator.

2.2. Theory of Consumer Behavior and Satisfaction Consumer wants and needs Demand is the economic principle that describes a consumer's desire, willingness and ability to

pay a price for a specific good or service. A firm in the market economy survives by producing goods that are in demand by consumers. A need is a consumer's desire for a product's or services specific benefit, whether that be functional or emotional. The emotional benefit tends to be a stronger driver for consumers, as functional benefits can be easily copied by competitors. Customer Decision Process: There is a five step process that consumers can go through in making a purchase decision. These steps include:

Need recognition Information search Evaluation of Alternatives Purchase Post-purchase

The customer decision process begins with need identification. Whether we act to resolve a particular problem depends upon two factors: the magnitude of the discrepancy between what we have and what we need, and the importance of the problem. This involves the concept of consumer motivation, which is the internal drive consumers experience to fulfill conscious and unconscious wants and needs. Once the problem is recognized, it must be defined in such a way that the consumer can actually initiate the action that will bring about a relevant solution.

2.2.1. The Four Elements of the Marketing Mix. The marketing mix and the 4Ps of marketing are often used as synonyms for each other. In fact,

they are not necessarily the same thing. "Marketing mix" is a general phrase used to describe the different kinds of choices organizations have to make in the whole process of bringing a product or service to market. The 4Ps is one way – probably the best-known way – of defining the marketing mix.

8

Figure 1: The Four Elements of the Marketing Mix

The 4Ps are:

Product / Service) Place. Price Promotion

A good way to understand the 4Ps is by the questions that you need to ask to define your marketing mix. Here are some questions that will help you understand and define each of the four elements: 1. Product: The term "product" is defined as anything, either tangible or intangible, offered by the firm; as a solution to the needs and wants of the consumer; something that is profitable or potentially profitable; and a goods or service that meets the requirements of the various governing offices or society. The two most common ways that products can differentiate are:

Consumer goods versus industrial goods, and Goods products (i.e. durables and non-durables) versus service products

Intangible products are service-based, such as the tourism industry, the hotel industry, and the financial industry. Tangible products are those that have an independent physical existence. Typical examples of mass-produced, tangible objects are automobiles and the disposable razor. A less obvious but ubiquitous mass produced service is a computer operating system. 2. Placement: Product distribution (or placement) is the process of making a product or service accessible for use or consumption by a consumer or business user, using direct means, or using indirect means with intermediaries.

9

Distribution Types

Intensive distribution means the producer's products are stocked in the majority of outlets. This strategy is common for basic supplies, snack foods, magazines and soft drink beverages.

Selective distribution means that the producer relies on a few intermediaries to carry their product. This strategy is commonly observed for more specialized goods that are carried through specialist dealers, for example, brands of craft tools, or large appliances.

Exclusive distribution means that the producer selects only very few intermediaries. Exclusive distribution is often characterized by exclusive dealing where the re-seller carries only that producer's products to the exclusion of all others. This strategy is typical of luxury goods retailers such as Gucci.

The decision regarding how to distribute a product has, as its foundation, basic economic concepts, such as utility. Utility represents the advantage or fulfillment a customer receives from consuming a good or service. Understanding the utility a consumer expects to receive from a product being offered can lead marketers to the correct distribution strategy. 3. Promotion: The three basic objectives of promotion are:

1. To present product information to targeted consumers and business customers. 2. To increase demand among the target market. 3. To differentiate a product and create a brand identity.

A marketer may use advertising, public relations, personal selling, direct marketing, and sales promotion to achieve these objectives. A promotional mix specifies how much attention to give each of the five subcategories, and how much money to budget for each. A promotional plan can have a wide range of objectives, including: sales increases, new product acceptance, creation of brand equity, positioning, competitive retaliations, or creation of a corporate image. 4. Price: The price is the amount a customer pays for the product. The concept of price is in contrast to the concept of value, which is the perceived utility a customer will receive from a product. Adjusting the price has a profound impact on the marketing strategy, and depending on the price elasticity of the product, often it will affect the demand and sales as well. The marketer should set a price that complements the other elements of the marketing mix. A well chosen price should (a) ensure survival (b) increase profit (c) generate sales (d) gain market share, and (e) establish an appropriate image.

10

2.2.2. The Concept and Theory of Consumer Behavior Consumer behavior is the study of how individual, groups and organizations select, buy, use and

dispose of good, services, ideas or experience to satisfy there are need and wants. Marketers must fully understand both the theory and reality of consumer behavior. A consumer’s buying behavior is influenced by culture, social, personal factors, of these; culture factors exert the broadest and deepest influence. The 4 factors influencing consumer behavior

Find out what are the factors influencing consumer behavior, how they work and how to better understand them in order to better meet consumers’ expectations and improve your marketing strategy. There are 4 main types of factors influencing consumer behavior: cultural factors, social factors, personal factors and psychological factors Table 1: The 4 factors influencing consumer behavior

Culture Social Personal Psychology

Culture Subculture Social class

Group Family Status

Age Occupation Economic Lifestyle Personality

Motivation Perception Learning Beliefs

Buyer

I. Cultural Factors Cultural factors are coming from the different components related to culture or cultural environment from which the consumer belongs- Culture and societal environment: Culture is crucial when it comes to understanding the needs and behaviors of an individual. Throughout his existence, an individual will be influenced by his family, his friends, his cultural environment or society that will ‚teach‛ him values, preferences as well as common behaviors to their own culture. For a brand, it is important to understand and take into account the cultural factors inherent to each market or to each situation in order to adapt its product and its marketing strategy. As these will play a role in the perception, habits, behavior or expectations of consumers. Sub-cultures: A society is composed of several sub-cultures in which people can identify. Subcultures are groups of people who share the same values based on a common experience or a similar lifestyle in general. Subcultures are the nationalities, religions, ethnic groups, age groups, gender of the individual,

11

etc.. The subcultures are often considered by the brands for the segmentation of a market in order to adapt a product or a communication strategy to the values or the specific needs of this segment. II. Social Factors Social factors are among the factors influencing consumer behavior significantly. They fall into three categories: reference groups, family and social roles and status. Reference groups and membership groups: The membership groups of an individual are social groups to which he belongs and which will influence him. The membership groups are usually related to its social origin, age, place of residence, work, hobbies, leisure, etc... The influence level may vary depending on individuals and groups but is generally observed common consumption trends among the members of a same group. The understanding of the specific features (mindset, values, lifestyle, etc...) of each group allows brands to better target their advertising message. Within a reference group that influences the consumer buying behavior, several roles have been identified:

The initiator: the person who suggests buying a product or service The influencer: the person whose point of view or advice will influence the buying decision. It

may be a person outside the group (singer, athlete, actor, etc...) but on which group members rely on.

The decision-maker: the person who will choose which product to buy. In general, it’s the consumer but in some cases it may be another person. For example, the ‚leader‛ of a soccer supporters’ group (membership group) that will define, for the whole group, which supporter’s scarf buy and bear during the next game.

The buyer: the person who will buy the product. Generally, this will be the final consumer. III. Personal Factors: Decisions and buying behavior are obviously also influenced by the characteristics of each consumer.

Age and way of life: A consumer does not buy the same products or services at 20 or 70 years. His lifestyle, values, environment, activities, hobbies and consumer habits evolve throughout his life. For example, during his life, a consumer could change his diet from unhealthy products (fast food, ready meals, etc...) to a healthier diet, during mid-life with family before needing to follow a little later a low cholesterol diet to avoid health problems.

Purchasing power and revenue: The purchasing power of an individual will have, of course, a decisive influence on his behavior and purchasing decisions based on his income and his capital. This obviously affects what he can afford, his perspective on money and the level of importance of price in his

12

purchasing decisions. But it also plays a role in the kind of retailers where he goes or the kind of brands he buys.

Lifestyle: The lifestyle of an individual includes all of its activities, interests, values and opinions. The lifestyle of a consumer will influence on his behavior and purchasing decisions. For example, a consumer with a healthy and balanced lifestyle will prefer to eat organic products and go to specific grocery stores, will do some jogging regularly (and therefore will buy shoes, clothes and specific products), etc..

Personality and self-concept: Personality is the set of traits and specific characteristics of each individual. It is the product of the interaction of psychological and physiological characteristics of the individual and results in constant behaviors. It materializes into some traits such as confidence, sociability, autonomy, charisma, ambition, openness to others, shyness, curiosity, adaptability, etc... IV. Psychological factors Among the factors influencing consumer behavior, psychological factors can be divided into 4 categories: motivation, perception, learning as well as beliefs and attitudes.

Motivation: Motivation is what will drive consumers to develop a purchasing behavior. It is the expression of a need is which became pressing enough to lead the consumer to want to satisfy it. It is usually working at a subconscious level and is often difficult to measure. Motivation is directly related to the need and is expressed in the same type of classification as defined in the stages of the consumer buying decision process. To increase sales and encourage consumers to purchase, brands should try to create, make conscious or reinforce a need in the consumer’s mind so that he develops a purchase motivation. He will be much more interested in considering and buy their products.

Perception: Perception is the process through which an individual selects, organizes and interprets the information he receives in order to do something that makes sense. The perception of a situation at a given time may decide if and how the person will act. Each person faces every day tens of thousands of sensory stimuli (visual, auditory, kinesthetic, olfactory and gustatory). It would be impossible for the brain to process all consciously. That is why it focuses only on some of them. The perception mechanism of an individual is organized around three processes: 1. Selective Attention: The individual focuses only on a few details or stimulus to which he is subjected. The type of information or stimuli to which an individual is more sensitive depends on the person. 2. Selective Distortion: In many situations, two people are not going to interpret information or a stimulus in the same way. Each individual will have a different perception based on his experience, state of mind,

13

beliefs and attitudes. Selective distortion leads people to interpret situations in order to make them consistent with their beliefs and values. 3. Selective Retention: People do not retain all the information and stimuli they have been exposed to. Selective retention means what the individual will store and retain from a given situation or a particular stimulus. As for selective distortion, individuals tend to memorize information that will fit with their existing beliefs and perceptions.

Learning: Learning is through action. When we act, we learn. It implies a change in the behavior resulting from the experience. The learning changes the behavior of an individual as he acquires information and experience. For example, if you are sick after drinking milk, you had a negative experience, you associate the milk with this state of discomfort and you ‚learn‛ that you should not drink milk. Therefore, you don’t buy milk anymore. Rather, if you had a good experience with the product, you will have much more desire to buy it again next time.

Beliefs and attitudes: A belief is a conviction that an individual has on something. Through the experience he acquires, his learning and his external influences (family, friends, etc...), he will develop beliefs that will influence his buying behavior while an attitude can be defined as a feeling, an assessment of an object or idea and the predisposition to act in a certain way toward that object. Attitudes allow the individual to develop a coherent behavior against a class of similar objects or ideas.

2.2.3. Theory of Customer Satisfaction 1. Customer Satisfaction Whether the buyer is satisfied after a purchase depends on the offer’s performance in relationship

to the buyer’s expectations and whether the buyer interprets any deviations between the two.7 In general, satisfaction is a person’s feelings of pleasure or disappointment that result from comparing a product’s perceived performance (or outcome) to expectations. If the performance falls short of expectations, the customer is dissatisfied. If performance matches expectations, the customer is satisfied; if it exceeds expectations, the customer is highly satisfied or delighted.8 Customer assessments of product performance depend on many factors, especially the type of loyalty relationship the customer has with the brand. buyers form their expectations from past buying experience; friends’ and associates’ advice; and marketers’ and competitors’ information and promises. If marketers raise expectations too high, the buyer is likely to be disappointed. However, if the company sets expectations too low, it won’t attract enough buyers (although it will satisfy those who do buy).10 some of today’s most successful companies are raising expectations and delivering performance to match. Korean automaker Kia has been successful in

14

the U.S. market by offering low-priced, high-quality cars reliable enough to be backed by 10-year warranties.

However, high customer satisfaction is not the ultimate goal. If the company increases customer satisfaction by lowering its price or increasing its services, the result may be lower profits. The company might be able to increase its profitability by means other than increased satisfaction (for example, by improving manufacturing processes). Also, the company has many stakeholders, including employees, dealers, suppliers, and stockholders. Spending more to increase customer satisfaction might divert funds from increasing the satisfaction of other ‚partners.‛ Ultimately, the company must try to deliver a high level of customer satisfaction subject to delivering acceptable levels of satisfaction to the other stakeholders, given its total resources.

Product and Service Quality - Product and Service Quality Satisfaction will also depend on product and service quality. What exactly is quality? Various experts have defined it as ‚fitness for use,‛ ‚conformance to requirements,‛ and ‚freedom from variation.‛ We will use the American Society for Quality Control’s customer-centered definition: Quality (or grade) is the totality of features and characteristics of a product or service that bear on its ability to satisfy stated or implied needs.20 the seller has delivered quality whenever the product or service meets or exceeds the customers’ expectations. It is important to distinguish between conformance quality and performance quality. A Lexus provides higher performance quality than a Hyundai: The Lexus rides smoother, goes faster, and lasts longer. Yet both a Lexus and a Hyundai deliver the same conformance quality if all the units deliver their respective promised quality

Customer Perceived Value - Customer Perceived Value Customer perceived value (CPV) is the difference between the prospective customer’s evaluation of all the benefits and all the costs of an offering and the perceived alternatives (see Figure 4.1). Total customer value is the perceived monetary value of the bundle of economic, functional, and psychological benefits customers expect from a given market offering because of the products, services, personnel, and image involved. Total customer cost is the perceived bundle of costs that customers expect to incur in evaluating, obtaining, using, and disposing of the given market offering, including monetary, time, energy, and psychic costs. Suppose the buyer for a residential construction company wants to buy a tractor from either Caterpillar or Komatsu. After evaluating the two tractors, he decides that Caterpillar has greater product benefits, based on perceived reliability, durability, performance, and resale value. He also decides that Caterpillar’s personnel are more knowledgeable and perceives that the company will provide better services, such as maintenance. Finally, he places higher value on Caterpillar’s corporate image. He adds up all the benefits from these four

15

sources—product, services, personnel, and image—and perceives Caterpillar as delivering greater customer benefits. The buyer also examines his total cost of transacting with Caterpillar versus Komatsu, including money plus the time, energy, and psychic costs expended in product acquisition, usage, maintenance, ownership, and disposal. Then the buyer compares Caterpillar’s total customer cost to its total customer benefits and Komatsu’s total customer cost to its total customer benefits. In the end, the buyer will buy from the source he thinks delivers the highest perceived value.

Influence of customer satisfaction - ICS for customer – centered companies, customer satisfaction is both a goal and a marketing tool. Companies needs to especially concerned their customer satisfaction level today the internet provides a tool for consumers to quickly spread both good and bad word of mouth to the rest of the world. Some customer set up their own web sites to air grievances and galvanizes protest, targeting high-profile branch such as United Airlines, Home Depot and Mercedes-Benz. Customer complaints – some companies think they’re getting a sense of customer satisfaction by tallying complaints but studies show that while customers are dissatisfied with their purchases about 25 percent of the time, only about 5 percent complain. The other 95 percent either feel complaining is not worth the effort or don’t know how or to know to complain. They just stop buying.

16

2.3. Overview of Cambodia Profit and Economic Development 2.3.1. Background of Cambodia Country Cambodia is one of the ten nations of Southeast Asia and part of mainland Southeast Asia. It is

bordered on the north by Laos and Thailand, on the west by Thailand, and on the east by Vietnam. Its geographic area is 181,040 square kilometers (69,900 square miles), making it slightly smaller than the state of Oklahoma. Its total land boundaries are 2,572 kilometers (1,598 miles), and it has a coastline on the Gulf of Thailand of 443 kilometers (275 miles). The Mekong River flows directly through the country from north to south, eventually flowing into the Mekong Delta of Vietnam. Cambodia's largest city and capital, Phnom Penh, is on the Mekong River. The other major cities in Cambodia are Battambang, Siem Reap (the gateway to Angkor Wat), and Kampong Saom (Sihanoukville), Cambodia's major port.

Population Cambodia's population was 12,491,501 in July of 2001, according to the CIA World Fact

book. This compares with a population of 5,728,772 in 1962; 6,682,200 in 1981; and 11,426,223 in 1998. The current population growth rate is a relatively high 2.25 percent. If this population rate were to continue, the country's population would double to approximately 25 million by the year 2033. The major cause of this high population growth rate is the high fertility rate of Cambodian women. The average Cambodian woman has 4.74 children.

With such a high fertility rate and the loss of much of the adult population through the prolonged civil war (1970-75, 1979-98), the Cambodian population is extremely young. Around 41.25 percent of the population is less than 15 years of age, and only 3.47 percent of the population is over 65. Unfortunately, Cambodia has a serious AIDS problem, which will have a negative effect on its future population growth. In 1999, it was estimated that the HIV/AIDS incidence among adults was 4.04 percent.

Unlike many other Southeast Asian countries such as Laos, Burma, Indonesia, and the Philippines, the Cambodian population is relatively homogenous. Approximately 90 percent of the population is Khmer, with 5 percent Vietnamese, 1 percent Chinese, and 4 percent other (Cham, Lao, Tai, and various hill peoples in northeastern areas such as Ratanakiri and Mondulkiri). Khmer is also the official language. Theravada Buddhists are the dominant religious group, claiming 95 percent of the population.

17

2.3.2. Economic Development In Brief, The business environment will continue to improve but will do so only slowly, as the

gains in political stability seen since the July rapprochement between the ruling CCP and the opposition CNRP will remain prone to setbacks. Strengthening global demand will help economic growth to recover, but a rise in the minimum wage in the crucial garment sector in 2015 will limit the upswing in exports. We expect real GDP growth to pick up to 7.3% in 2015 and to average a healthier 7.6% a year in 2016-19.

Economic- Overview: Since 2004, garments, construction, agriculture, and tourism have driven Cambodia's growth. GDP climbed more than 7% per year between 2010 and 2013. The garment industry currently employs more about 400,000 people and accounts for about 70% of Cambodia's total exports. In 2005, exploitable oil deposits were found beneath Cambodia's territorial waters, representing a potential revenue stream for the government, if commercial extraction becomes feasible. Mining also is attracting some investor interest and the government has touted opportunities for mining bauxite, gold, iron and gems. The tourism industry has continued to grow rapidly with foreign arrivals exceeding 2 million per year since 2007 and reaching over 3 million visitors in 2012. Cambodia, nevertheless, remains one of the poorest countries in Asia and long-term economic development remains a daunting challenge, inhibited by endemic corruption, limited educational opportunities, high income inequality, and poor job prospects. Approximately 4 million people live on less than $1.25 per day, and 37% of Cambodian children under the age of 5 suffer from chronic malnutrition. More than 50% of the population is less than 25 years old. The population lacks education and productive skills, particularly in the impoverished countryside, which also lacks basic infrastructure. The Cambodian Government is working with bilateral and multilateral donors, including the Asian Development Bank, the World Bank and IMF, to address the country's many pressing needs; more than 50% of the government budget comes from donor assistance. The major economic challenge for Cambodia over the next decade will be fashioning an economic environment in which the private sector can create enough jobs to handle Cambodia's demographic imbalance.1

Economic of Cambodia The economy of Cambodia at present follows an open market system (Market economy) and has

seen rapid economic progress in the last decade. Per capita income, although rapidly increasing, is low compared with most neighboring countries. Cambodia's two largest industries are textiles and tourism, while agricultural activities remain the main source of income for many Cambodians living in rural areas.

1

http://www.indexmundi.com/cambodia/economy_profile.html

18

The service sector is heavily concentrated on trading activities and catering-related services. Recently, Cambodia has reported that oil and natural gas reserves have been found off-shore.

In 1995, the government transformed the country's economic system from a planned economy to its present market-driven system. Following those changes, growth was estimated at a value of 7% while inflation dropped from 26% in 1994 to only 6% in 1995. Imports increased due to the influx of foreign aid, and exports, particularly from the country's garment industry, also increased. After four years of improving economic performance, Cambodia's economy slowed in 1997-98 due to the regional economic crisis, civil unrest, and political infighting. Foreign investments declined during this period. Also, in 1998 the main harvest was hit by drought. But in 1999, the first full year of relative peace in 30 years, progress was made on economic reforms and growth resumed at 4%. Currently, Cambodia's foreign policy focuses on establishing friendly borders with its neighbors (such as Thailand and Vietnam), as well as integrating itself into regional (ASEAN) and global (WTO) trading systems. Some of the obstacles faced by this emerging economy are the need for a better education system and the lack of a skilled workforce; particularly in the poverty-ridden countryside, which struggles with inadequate basic infrastructure. Nonetheless, Cambodia continues to attract investors because of its low wages, plentiful labor, proximity to Asian raw materials, and favorable tax treatment. A. History Economic of Cambodia

Following its independence from France in 1953, the Cambodian state underwent five periods of political, social, and economic transformation:

Kingdom of Cambodia (1953-1970) Khmer Republic (1970–1975) Democratic Kampuchea (1975-1979) People's Republic of Kampuchea (1979-1989), later renamed The State of Cambodia (1989 to 1993)

Kingdom of Cambodia (1993–present) In 1989, the State of Cambodia implemented reform policies that transformed the Cambodian

economic system from a Command economy to an open market one. In line with the economic reformation, private property rights were introduced and state-owned enterprises were privatized. Cambodia also focused on integrating itself into regional and international economic blocs, such as the Association of South East Asian Nations and the World Trade Organization respectively. These policies triggered a growth in the economy, with its national GDP growing at an average of 6.1% before a period of domestic unrest and regional economic instability in 1997 (1997 Asian Financial Crisis).However,

19

conditions improved and since 1999, the Cambodian economy has continued to grow at an average pace of approximately 6-8% per annum. B. Foreign Aid

Cambodia's emerging democracy has received strong international support. Under the mandate of the United Nations Transitional Authority in Cambodia (UNTAC), $1.72 billion (1.72 G$) was spent in an effort to bring basic security, stability and democratic rule to the country. With regards to economic assistance, official donors had pledged $880 million at the Ministerial Conference on the Rehabilitation of Cambodia (MCRRC) in Tokyo in June 1992. In addition to that figure, $119 million was pledged in September 1993 at the International Committee on the Reconstruction of Cambodia (ICORC) meeting in Paris, and $643 million at the March 1994 ICORC meeting in Tokyo. Cambodia experienced a shortfall in foreign aid in the year 2005 due to the government's failure in passing anti-corruption laws, opening up a single import/export window, increasing its spending on education, and complying with policies of good governance. In response, the government adopted the National Strategic Development Plan for 2006–10 (also known as the ‚Third Five-Year Plan‛). The plan focused on three major areas:

The speeding up of economic growth at an annual rate of 6-7% Eradicating corruption Developing public structures in favor of quality (i.e. by education, training, and

healthcare) over quantity (i.e. rapid population growth) C.Recent Developments In 2007, Cambodia's Gross domestic product grew by an estimated 18.6%. Garment exports rose by almost 8%, while tourist arrivals increased by nearly 35%. With exports decreasing, the 2007 GDP growth was driven largely by consumption and investment. Foreign direct investment (FDI) inflows reached US$600 million (7 percent of GDP), slightly more than what the country received in official aid. Domestic investment, driven largely by the private sector, accounted for 23.4 percent of GDP. Export growth, especially to the US, began to slow in late 2007 accompanied by stiffer competition from Vietnam and emerging risks (a slowdown in the US economy and lifting of safeguards on China’s exports). US companies were the fifth largest investors in Cambodia, with more than $1.2 billion in investments over the last decade. Cambodia was severely hit by the 2008 economic crisis (refer to table below), and its main economic sector, the garment industry, suffered a 23% drop in exports to the United States of America and Europe. As a result, 60,000 workers were laid off. However, in the last quarter of 2009 and early 2010, conditions were beginning to improve and the Cambodian economy is recovering. Cambodian exports to the US for the first 11 months of 2012 reached $2.49 billion, a 1 per cent increase year-on-year.

20

Its imports of US goods grew 26 per cent for that period, reaching $213 million. Another factor underscoring the potential of the Cambodian economy is the recent halving of its poverty rate. The poverty rate is 20.5 per cent, meaning that approximately 2.8 million people live below the poverty line.2 The table below represents the fluctuations in Cambodia's economy over the past 8 years (2012 data is not

yet available). Table 2: Cambodia’s economic over the past 8 years

Category 2004 2005 2006 2007 2008 2009 2010 2011

GNI per capita, PPP(current international $)

1,250 1,440 1,630 1,830 1,960 1,970 2,080 2,230

Total Population (Millions)

13.19 13.36 13.52 13.67 13.82 13.98 14.14 14.31

GDP (Millions US$) 5,337.83 6,293.05 7,274.42 8,639.16 10,351.83 10,401.94 11,242.27 12,829.54

GDP Growth (annual %)

10.34 13.25 10.77 10.21 6.69 0.09 5.96 7.07

2.3.4. Macro-Economic of Cambodia 1. Macro-Economic Development A. Growth, Poverty, Reform Priorities The development challenge facing Cambodia is to sustain growth, reduce poverty, and accelerate the completion of the reform agenda. To accomplish these medium term goals will require effective economic management and considerable inflows of external assistance in order to support the implementation of public investment priorities and raise the pace and consistency of structural reform. Moreover, mechanisms to reduce poverty and protect vulnerable groups from accelerated transformation must be put in place. The development needs of Cambodia have shifted from survival mode to a medium term strategic framework for rapid adjustment and growth supported by sound macro and sartorial policies, and complementary public investment and technical assistance programs. Adjustment and growth, such are the

2

http://en.wikipedia.org/wiki/Economy_of_Cambodia

21

objectives pursued by the MEF. It is important to strengthen the macroeconomic balances in order to allow for the healthy, sustainable growth of the economy. On this basis, sector-driven strategies tended to increase and diversify production, parallel with the budget strategy of reducing financial dependence and encouraging social progress. The path covered in five years (1994-98), albeit one that shows deficiencies to be corrected and delays to be resolved, seems satisfactory, overall. Progress has been noteworthy and the results indicators positive mainly due to a good concurrence of external factors affecting economic development, and also to the clear direction given by national policies. B.Results Indicators - Positive Development The outcomes of the results indicators appear to be positive, according to the information in Table below: 1. A real average annual growth rate of 5.2% for the period. Had it not been for the downturn in 1997 which will continue to make be felt to a lesser extent in 1998, the average annual growth rate could have reached 6.0%. In this regard, 1995 and 1996 have clearly very high scores, which were lining Cambodia up among the Asian dragons until the recent crisis occurred; 2. A per capita GDP on a constant growth curve, from US$241 in 1994 to US$303 in 1996, with a slight decline in 1997 ($290.9); 3. A CPI that broke free from the soaring increases of the previous years to stabilize from 1996 onwards at a about 9%; 4. A deficit in t he current balance excluding transfers, which is sustained at 14-15% of GDP, despite the. Increase in imports due to investments 5. Foreign exchange reserves that reached over two months of goods and services imports; 6. Foreign contributions that covered the gross deficit of the current balance on an annual average for 1994-97, in the amount of 134%, with the surplus helping to improve the gross foreign exchange reserves. 2. External Factors and the Funding or Deficits Factors external to the evolution of the economy are related to official transfers such as donations, capital transfers in the form of loans from international organizations and, lastly, to foreign direct investments (FDI). The aggregate of such external contributions covered, on a annual average from 1994-97, the gross deficit of the current balance in the amount of 134% (the surplus contributed to the improvement of the gross foreign exchange reserves to cover 2.7 months of imports in 1997). However, although official transfers and capital transfers are being maintained from one year to the next, about 8-1 1 % and from 2-3 % respectively of GDP, these did drop in 1997 by about 8 % with relation to the initial forecasts and by 20% compared to 1996. On the other hand ' FDI that had grown at a very sustained pace since 1093, dropped by 21% in 1997 with relation to the forecasts.There is reason to fear that, in view of the Asian

22

financial cataclysm, such investments will not rapidly pick up the dynamic growth that they experienced up till now. 3. National Policies and Economic Development - Budget and Monetary Policies Expansion of the monetary supply was strong during the years 1994-97, with an annual average rate of 35.7%, and for an average 5.2% of GDP. However, no monetary financing of the Treasury was undertaken with -the National Bank of Cambodia until late 1997. In reality, the foreign currency deposit component explains this growth; liquidity in Riels has grown at an annual average rate of 13.7%. Still, this development is especially due to the exceptional year in 1997 (+33.4%). Nevertheless, the Riel-US Dollar parity has remained very stable during the period, i.e. at the end of the period 2,593 in 1994; 2,560 in 1995; and 2,720 in 1996. It was only during the second half of 1997 that, suffering the effects of the Asian monetary cataclysm, the Riel went up to 3,500 for US$I; since that time, it has basically maintained itself at this level. However, a good macroeconomic performance was obvious in the – liberalization of the rate of exchange, the stabilization of inflation to a tolerable level, and the revamping of the commercial framework (removal of restrictions on imports and obstacles to exports). 4. Taxation-an up-to-date tax system, but still yielding inadequate results The Government undertook the renovation and reinforcement of a taxation and duty system that was still in infancy. The country was slowing getting away from a command economy. The option was made for a modern, performing tax system, but by means of a progressive approach that would allow for reasonable time for the new economic structures to adapt and for State employees to be trained. With the year 1998-after the Taxation Code of February 1997, pending enforcement of the VAT on large commercial enterprises in 1999, and with the Customs Code yet to come out-the Cambodian approach will be five years old.The current nomenclature of é taxes and duties is a good reflection of the tax structure as it is found in most countries in the world. An analysis of the relationship between tax revenue and the components of GDP that are the basis thereof gives rise to the following observations: What is called the tax ratio and which means the actual levy made on GDP, experienced a rapid increase between 1993 (4.32%) and 1994 (5.95%), when the initial tax measures kicked in. Since that time, the tax ratio continues to be around 6% -- with a peak of 6.46% reached in 1997 -- the lowest rate in the world, even compared to the Least Developed Countries (LDCs). In the Southeast Asian region, the tax ratio rate was already 9.53% in 1984 in the Philippines; 14.34% in Thailand; 1 26.93% in Indonesia; 21.53% in Malaysia. the Philippines is the only country where the rates appear relatively low-, although the rate

23

quickly increased to 15.5 1 % in 1992. That is about the same rate as in Vietnam (I 5.4% in 1993 for a GDP per capita that is lower than that of Cambodia), while Laos was at 7.4% in 1991.3

2.3.4. Cambodia Partnership Strategy Cambodia has achieved robust and steady growth over the past 2 decades. Considerable

investments have been made by the government and development partners in rural areas, where more than 80% of all Cambodians live, and the population below the poverty line decreased markedly. Cambodia and ADB celebrated 20 years of partnership in 2012. The aim of the partnership is to reduce poverty by promoting inclusive economic growth and social development.

The country partnership strategy (CPS), 2014-2018 for Cambodia aligns with the country’s strategic planning cycle and the new priorities of the government’s Rectangular Strategy for Growth, Employment, Equity and Efficiency, Phase III and the National Strategic Development Plan for 2014-2018 and the recommendations from the Independent Evaluation Department at ADB and ADB’s Midterm Review of Strategy 2020. Consistent with the government’s economic reform priorities, the impact of the CPS will be reduction in poverty and vulnerability. To achieve this, the CPS will embed the three strategic agendas of the Midterm Review of Strategy 2020 into all ADB operations:

Inclusive economic growth, through sustained high growth and the creation of more diversified economic opportunities, broader access to these opportunities, and targeted social safety nets to protect the chronically poor.

Environmentally sustainable growth, through the use of environment and climate-friendly technologies, implementation of environmental safeguard measures, and strengthened institutional capacities; and

Regional cooperation and integration, through closer policy coordination in support of regional and global public goods, and larger regional markets for goods, services, and capital. Responding to the recommendations of the Midterm Review of Strategy 2020, the CPS for 2014-

2018 will emphasize catalyzing resource flows and providing knowledge solutions. Public-private partnerships will be a key activity, as will strategies to enhance partnerships with Co financiers and implement knowledge activities.4

3

http://www.tourismcambodia.com/about-cambodia/economy.htm 4

http://www.adb.org/countries/cambodia/strategy

24

Current Cambodia Economic - ADB Trade and tourism in Cambodia slowed in the first half of 2014. Shipments of garments and

footwear rose by 14.5% to $2.8 billion, compared with a 17.0% gain a year earlier, and growth in total merchandise exports moderated to 20.0% from 27.0% in the first half of 2013. Imports also decelerated, to 6.7% from 24.7%.

Table 3: Current Cambodia Economic

Selected Economic Indicators (%) - Cambodia

2014 2015

ADO 2014 Update ADO 2014 Update

GDP Growth 7.0 7.0 7.3 7.3

Inflation 3.5 4.4 3.5 4.0

Current Account Balance (share of GDP) -11.3 -11.3 -10.9 -10.9

Source: ADB estimates. Tourism grew at a more gradual pace, largely because tourist arrivals to neighboring Thailand

declined. Tourist arrivals to Cambodia rose by 5.2% to 2.2 million in the first half of 2014, against a 19.1% rise in the year-earlier period. Other available data show that growth in credit to the private sector was 12.0% year on year in June 2014, well below the expansion rate of a year earlier.

Political tensions that followed last year’s Cambodian national elections have abated in recent months, and labor unrest in the garment industry eased after the minimum monthly wage for garment workers was raised in February this year. These developments are expected to lift investor confidence. This Update retains the Asian Development Outlook (ADO) 2014 forecast that gross domestic product (GDP) growth will ease to 7.0% this year before picking up in 2015. Inflation increased to 4.9% in June 2014 and averaged 4.4% in the first 6 months, driven mainly by higher food prices. A tightening of customs duty collections late in 2013 put some upward pressure on prices for imports. Inflation is now projected to be higher than previously expected. Current account forecasts are retained from April. Gross official reserves at midyear were $3.9 billion, cover for 3.8 months of imports of goods and services.5

5

http://www.adb.org/countries/cambodia/economy

25

2.4. Overview of Telecommunication Industry in Cambodia 2.4.1. The Definition of Telecommunications

Telecommunications refers to the exchange of information by electronic and electrical means over a significant distance. A complete telecommunication arrangement is made up of two or more stations equipped with transmitter and receiver devices. A single co-arrangement of transmitters and receivers, called a transceiver, may also be used in many telecommunication stations. Telecommunications devices include telephones, telegraph, radio, and microwave communication arrangements, fiber optics, satellites and the Internet. Telecommunications is also known as telecom.

Techopedia explains Telecommunications Telecommunications is a universal term that is used for a vast range of information-transmitting

technologies such as mobile phones, land lines, VoIP and broadcast networks. In telecommunications, data is transmitted in the form of electrical signals known as carrier waves, which are modulated into analog or digital signals for transmitting information. Analog modulation such as that used in radio broadcasting is an amplitude modulation. Digital modulation is just an updated form of this. Telecommunications and broadcasting are administered worldwide by an agency of the United Nations called the International Telecommunication Union (ITU). Most countries have their own agencies for enforcing telecommunications regulations.

2.4.2. Background Telecom Industry in Cambodia Cambodia has made significant gains in the information and technology sector in the past decade,

but there is still much work to be done. As far as telecommunications go, Cambodia is essentially cut off from the rest of the world. Their cell phone and Internet networks are far behind the rest of the region and there is little centralized authority controlling the process. Cambodia has made significant gains in the information and technology sector in the past decade, but there is still much work to be done. As far as telecommunications go, Cambodia is essentially cut off from the rest of the world. Their cell phone and Internet networks are far behind the rest of the region and there is little centralized authority controlling the process. The cell phone market in Cambodia has exploded as of late, but compared to neighboring countries, they are still far behind. As of the start of 2009, Cambodia had 2.6 million cell phones, accounting for about 18 percent of the population, of which the majority were located in the capital, Phnom Penh. This is an impressive growth considering only 1 million cell phones were in use in 2005, but as of 2008, over 3.6 billion cell phones, approximately 55 percent, were in use worldwide. Furthermore, its nearby neighbors have high market penetration, such as the Philippines with 71 percent and Thailand

26

with 78.5 percent. Even Vietnam has a significantly larger cell phone market with 40 percent of the country accessing cell phones.

In addition to its low cell phone penetration, existing service is extremely unreliable. Many consumers complain of failing calls and intermittent service, particularly when calling between the three major networks. But compared to its Internet service, Cambodia’s cell phone market is massive. As of June 2008, there were only 40,000 citizens with Internet access, a mere 0.5 percent. Besides Myanmar, East Timor and Bangladesh, Cambodia has the lowest Internet penetration in all of Asia. Even Africa, considered as having the worst Internet penetration in the world, has an average of 5.6 percent. The main problem with expanding Internet service is the lack of a national fiber optic network. Those without access to the fiber optic network rely on slow, erratic and expensive satellite coverage. Average monthly prices for satellite coverage in Cambodia run at $89, while commensurable service in neighboring Vietnam costs only $17.6 Table 4: Cambodia Telecommunications Profile 2014 Telephones - main lines in use 584,000 (2012)

Telephones - mobile cellular 19.1 million (2012) Telephone system General assessment: adequate fixed-line and/or cellular service in

Phnom Penh and other provincial cities; mobile-cellular phone systems are widely used in urban areas to bypass deficiencies in the fixed-line network; mobile-phone coverage is rapidly expanding in rural areas Domestic: fixed-line connections stand at about 4 per 100 persons; mobile-cellular usage, aided by competition among service providers, is increasing rapidly and stands at 92 per 100 persons International: country code - 855; adequate but expensive landline and cellular service available to all countries from Phnom Penh and major provincial cities; satellite earth station - 1 Intersputnik (Indian Ocean region) (2011)

Broadcast media mixture of state-owned, joint public-private, and privately owned broadcast media; 9 TV broadcast stations with most operating on multiple channels, including 1 state-operated station broadcasting from multiple locations, 6 stations either jointly operated or privately owned

6

http://www.asiaecon.org/special_articles/read_sp/12247

27

with some broadcasting from several locations, and 2 TV relay stations - one relaying a French TV station and the other relaying a Vietnamese TV station; multi-channel cable and satellite systems are available; roughly 50 radio broadcast stations - 1 state-owned broadcaster with multiple stations and a large mixture of public and private broadcasters; several international broadcasters are available (2009)

Internet country code Kh Internet hosts 13,784 (2012) Internet users 78,500 (2009)

2.4.3. Ministry of Posts and Telecommunications The Ministry of Posts and Telecommunications is the government ministry that governs the postal

system and the telecommunications systems of Cambodia. As of 2013 the Minister of Posts and Telecommunications was So Khun; the ministry maintains offices in Phnom Penh. Telecom Cambodia and Camnet Internet Service, the country's principal telecom operator and internet service provider, function under the jurisdiction of the Ministry. Camnet Internet Service is an Internet service provider operated by the Ministry of Posts and Telecommunications of Cambodia. Camnet was established in 1997 by the Cambodian government and Telecom Cambodia with the support of the International Development Research Centre of Canada. Camnet was the first Internet service provider in Cambodia. Its main offices are located in Phnom Penh.7 Departments of Administrative departments of the Ministry include:

Posts Department International Telecom Department Domestic Telecom Department Inspection Department Finance and Plan Department Frequency Management and Licensing Department The Ministry of Post and Telecommunication (MPTC) is in the process of further developing its

infrastructure as well. In some subsectors, the private sector also has an important role in such areas as mobile phones and the internet. In its current situation, the telecommunication sector should be backed by

7

http://en.wikipedia.org/wiki/Ministry_of_Posts_and_Telecommunications_(Cambodia)

28

a 57 appropriate regulatory and supervisory system. It is necessary to develop transparent and fair rules such as those for entry into business and for tariff setting. In this regard, the organizational framework should specify separate regulatory and operational bodies, as such would allow the formulation of rules to proceed smoothly. In electronic communications, there have been various attempts to develop a Khmer font, but until recently the different systems have been incompatible---i.e., to read and write electronic messages in Khmer, both sender and recipient must use the same font system.

1. Sect oral Regulatory Frameworks This section illustrates the problems of Cambodia’s regulatory framework in three critical

services sub-sectors. It analyzes how the observance or lack thereof, of good governance principles has affected the development of telecommunication services, tourism, and professional services. These sub-sectors were selected because of their importance to the Cambodian economy, including export of services, their supporting role to the export of services, and more broadly due to their role in the country’s competitiveness. Furthermore, these sub-sectors provide a spotlight on the regulatory and institutional conditions of services that are commonly regulated i) at the ministry level (tourism), ii) by a public independent regulatory body (telecoms), and iii) by private agencies in coordination with the ministry (professional services)

2. Telecommunications services International obligations Cambodia’s accession to the WTO set the ground for an open market

policy for the telecommunications sector, based on foreign participation and market competition. Cambodia also committed to establish an efficient regulatory framework, headed by an independent regulator. Value-added telecommunication services, including mobile services, were immediately opened up to full foreign participation. Cambodia also agreed to ban restrictions on the provision of cross-border telecom services after 2009, and to open land-based basic telecommunication to foreign ownership, although domestic participation of up to a maximum of 49 percent may be required. It agreed to regulate the sector according to the guidelines of the WTO Telecom Reference Paper, including through safeguards to prevent anti-competitive practices, non-discriminatory access to interconnection, transparency of inter-connection arrangements, universal services, public availability of licensing criteria, and establishment of an independent regulator. Regulatory framework Cambodia’s regulatory framework on telecommunications remains patchy, opaque, inconsistent, and non-transparent, with many administrative decisions not made public. Several attempts have been made in recent years to produce a telecom law, drafts of which were discussed at Cabinet meetings, but to no avail. In the absence of such a law, the Ministry of Posts and Telecommunications (MPTC) acts as the policymaker as well as the

29

regulatory and supervisory authority in the sector, overseeing the issuance of licenses and the administration of the spectrum. The General Directorate of Posts and Telecoms functions as the implementing agency within the MPTC. Until the establishment of Telecom Cambodia in 2006, the state-owned MPTC also directly operated in fied-line telephony and internet markets as the monopoly provider. Telecom Cambodia remains tightly linked to the government, under the technical administration of the MPTC, and the financial administration of the Ministry of Finance (DFDL, 2011).8

2.4.4. Communication in Cambodia Communications in Cambodia, specifically the postal, telegraph and telegram services under the

Ministry of Communications, Transport and Posts were restored throughout most of the country in the early 1980s during the People's Republic of Kampuchea regime after being disrupted under the Khmer Rouge. In January 1987, the Soviet-aided Intersputnik space communications station began operation in Phnom Penh and established two-way telecommunication links between the Cambodian capital and the cities of Moscow, Hanoi, Vientiane and Paris. The completion of the earth satellite station (built on the grounds of Phnom Penh's old Roman Catholic cathedral) restored the telephone and telex links among Phnom Penh, Hanoi, and other countries for the first time since 1975. Although telecommunications services were initially limited to the government, these advances in communications helped break down the country's isolation, both internally and internationally. 1. Telecommunication Regulation

Recently, Cambodia made a strong effort to reach many achievements in the ICT and Telecommunication sectors such as increasing the number of subscribers in all technologies of mobile phone, fixed phone, and Internet. These achievements can be achieved through closed collaboration with the International Telecommunication Union (ITU). The Ministry of Posts and Telecommunications Cambodia understands the importance of the ICT and Telecommunication sectors and provides strong support to all cooperative projects with other development partners to strengthen the sectors (19). The Ministry of Posts and Telecommunications Cambodia is in charge of establishing policy, regulation and managerial roles including responsibility for issuing and managing licenses and frequency spectrums related to Telecommunication sector in Cambodia. Currently, there is no overarching policy or framework for the Telecommunication sector in Cambodia. However, there are existing laws and regulations that are noted to possess significant gaps and loopholes and are used to govern the sector. The draft version of Telecommunication Law was issued in 2000 and is under the process of discussion and revision at the

8

http://www.itu.int/ITU-D/asp/CMS/Events/2011/ITU-ADB/Cambodia/Telecom_Infrastructure_MPTC.pdf

30

Office of Council of Ministers. The Royal Government of Cambodia has shown a promising sign of putting effort into the law, but there is no exact deadline for its enactment (20). Therefore, we can understand that the Telecommunication sector in Cambodia has a lack of strong regulation and monitoring to accommodate the strong competition in the market. In addition, the sector is lacking policy support on backbone infrastructure and R&D investment.9

2.4.5. Digital Media of Cambodia The Cambodian media sector is vibrant and largely unregulated. This situation has led to the

establishment of numerous radio, television and print media outlets. Many private sector companies have moved into the media sector, which represents a significant change from many years of state-run broadcasting and publishing. Since emerging from the communist governments of the Khmer Rouge and the Vietnam-backed People's Republic of Kampuchea regime, the Cambodian media sector has become one of Southeast Asia's liveliest and most free, although a lack of professional journalism training and ethics, and intimidation by both government and private interests limit the Cambodian media's influence.

There are 11 TV stations nationwide, including two relay stations with French, Thai and Vietnamese broadcasts, as well as 12 regional low-power stations (as of 2006). On radio, Cambodia has two AM stations and at least 52 FM stations. There are over 100 registered newspapers in Cambodia, of which only a handful publish regularly. Perhaps less than 20 of these could be regarded as ‘real’ newspapers, with paid staff and a predictable publishing schedule. The leading Khmer daily newspaper is Rasmei Kampuchea (Light of Kampuchea) Daily, established in 1993, which has a section on arts and culture. Kampuchea Thmei Daily, another broadsheet, has emerged recently as its strongest competitor. Responsibility for regulation of the media sector in Cambodia is shared between the Ministry of Information and the Ministry of Posts and Telecommunications, with the Minister of the Interior as the ultimate upholder and enforcer of the law. While the duties of these ministries in relation to the media are set out in their respective Decrees and Sub Decrees, there is at present no comprehensive legislation relating to broadcast, print and digital media in Cambodia. History of Media in Cambodia

In 1987, the state controlled print and electronic media and regulated their content. The most authoritative print medium in 1987 was the ruling KPRP's biweekly journal, Pracheachon (The People), which was inaugurated in October 1985 to express the party's stand on domestic and international affairs. Almost as important, however, was the weekly of the KUFNCD, Kampuchea. The principal publication of

9

http://www.econstor.eu/bitstream/10419/72493/1/742717844.pdf

31

the armed forces was the weekly Kangtoap Padevoat (Revolutionary Army). During the Vietnamese occupation in 1987, Cambodia had no daily newspaper. Though this situation changed swiftly after the withdrawal of Vietnamese troops and the UNTAC supervised general election in 1993. Radio and television were under the direction of the Kampuchean Radio and Television Commission, created in 1983. In 1986 there were about 200,000 radio receivers in the country. The Voice of the Kampuchean People (VOKP) radio programs were broadcast in Khmer, Vietnamese, French, English, Lao, and Thai. With Vietnamese assistance, television broadcasting was instituted on a trial basis in December 1983 and then regularly at the end of 1984. As of March 1986, Television Kampuchea (TVK) operated two hours an evening, four days a week in the Phnom Penh area only. There were an estimated 52,000 television sets as of early 1986. In December 1986, Vietnam agreed to train Cambodian television technicians. The following month, the Soviet Union agreed to cooperate with Phnom Penh in the development of electronic media. Cambodian viewers began to receive Soviet television programs after March 1987, through a satellite ground station that the Soviet Union had built in Phnom Penh. Beginning in 1979, the Heng Samrin regime encouraged people to read official journals and to listen to the radio every day. Widespread illiteracy and a scarcity of both print media and radio receivers, however, meant that few Cambodians could follow the government's suggestion. But even when these media were available, "cadres and combatants" in the armed forces, for example, were more interested in listening to music programs than in reading about "the situation and developments in the country and the world or articles on good models of good people.10

Media in Cambodia The Kingdom of Cambodia, formerly known as Kampuchea, is a sovereign country located in Southeast Asia with a population of over 13 million people. The country, plagued by the longstanding social and political unrest during the early half 20th century has resulted in widespread instability and poverty. While devastation of the earlier years remains profound, aids to the Cambodian government in its efforts towards peace and security has led to a more stable economic environment. Since 2000, efforts to improve the communications market in Cambodia has led to increased usage of digital devices and the internet. While Cambodia still digitally lags behind its neighboring countries, there are remains large potential opportunities for companies to reach consumers via the World Wide Web.

10

http://en.wikipedia.org/wiki/Media_of_Cambodia

32

Digital Literacy Figure 2: Internet Penetration

Cambodia has 449,160 Internet users as by the end of 2011. This figure represents only a 3.1 per cent penetration rate of the entire population despite the seemingly substantial increase of 1200 per cent since 10 years ago. The expansion of internet services has also been overshadowed by the mobile phenomenon. Internet uptake rates remained disturbingly low for many years, presenting one of the lowest penetrations in the region. Of course, the limited fixed-line infrastructure has been a major inhibiting factor in the rollout of both dial-up and ADSL internet services. The internet market started to change in 2007 when wireless broadband services first began to appear in a serious manner. There has been a surge in the number of operators interested in mobile broadband and especially WiMAX. By 2011 there had been a major upturn in internet numbers on the back of the increased broadband penetration. Overall penetration remained low, however Internet use is particularly high among Cambodian university students, with almost 90 per cent of them using the Internet at least a few times per week. Generally well-resourced financially and technically, they are among those who use the Internet the most and has it highly integrated into their lives, from seeking information to socializing, from accessing entertainment to completing academic tasks (Peou & Chea, 2010; Peou & Lwin, 2011). 53% of Cambodian university students have also expressed their opinions on the internet at least once in the last three months during the time of survey.

2.4.6. Telecommunication Service in Cambodia Cambodia has been lagging far behind virtually every country in the world in terms of

telecommunication capacity. When the civil war ended, there were only 3,000 telephone lines in Phnom Penh. Only short-wave radio with a limited capacity connected these lines with provincial cities. By 2006, there was a 33.67-percent increase in telephones in use compared to that in 2005. The year before that saw an increase of 28.9 percent. Mobile phones in 2005, meanwhile, totaled 840,916 units (or 95.3 percent) compared to 644,389 units (94.2 percent) in 2004. Note too that the number of units in use per 100 persons increased from year to year (6.4 units in 2005 and 7.98 in 2006). As a result, the

33

telecommunication network expanded along with the increase in the number of telephone users (both mobile and fixed phones). Cambodia’s postal services used to be unreliable, but had recently been expanded and earning back the public’s confidence. So with the country’s national TV transmitter, 46 which has been upgraded. In 2006, the coverage, efficiency, and quality of government mass media (radio, TV, and press agency) were expanded and improved. About 70 percent of its people were able to receive news, education, and entertainment through the existing mass media, both government and private.11

Telecommunications in Cambodia include telephone, radio, television, and Internet services, which are regulated by the Ministry of Posts and Telecommunications. Transport and posts were restored throughout most of the country in the early 1980s during the People's Republic of Kampuchea regime after being disrupted under the Khmer Rouge. In January 1987, the Soviet-aided Intersputnik space communications station began operation in Phnom Penh and established two-way telecommunication links between the Cambodian capital and the cities of Moscow, Hanoi, Vientiane and Paris. The completion of the earth satellite station restored the telephone and telex links among Phnom Penh, Hanoi, and other countries for the first time since 1975. Although telecommunications services were initially limited to the government, these advances in communications helped break down the country's isolation, both internally and internationally. Today, with the availability of mobile phones, communications are open to all, though the country's Prime Minister Hun Sen decreed that 3G mobile phones would not be allowed to support video calling.

Telecommunication Market

Table 5: Numbers of all Telecom operators as of the end of 2010 1 Mobile 8 2 Fixed & WILL 8 3 3G 7 4 Gateway 3 5 ISP 27 6 VoIP 15 7 VSAT 16

11

http://www.eria.org/publications/research_project_reports/images/pdf/PDF%20No.2/No.2-part2-

2.Infrastructure%20in%20Cambodia.pdf

34

2.4.6.1. Telephone Service in Cambodia

Table 6: Telephones service in Cambodia as following: 1 Fixed: 530,000 lines, 95th in the world, 4 per 100 persons (2011)

2 Mobile cellular: 13.8 million lines, 58th in the world, 92 per 100 persons (2011)

3 Satellite earth stations: 1 Intersputnik (Indian Ocean region)

4 International access code: +855

The government state communications corporation is Telecom Cambodia, founded in 2006 as an expansion of the telecom operating department of the Ministry of Posts and Telecommunications. Fixed line service in Phnom Penh and other provincial cities is available. Mobile-phone systems are widely used in urban areas to bypass deficiencies in the fixed-line network. Mobile phone coverage is rapidly expanding in rural areas. Mobile-cellular usage, aided by increasing competition among service providers, is increasing. International calling access is adequate, but expensive. Fixed line and mobile service is available to all countries from Phnom Penh and major provincial cities.

o Phone Used There are 9 cell companies who have invested in Cambodia. As of June 2011, the penetration rate in Cambodia was estimated at 69.318% over a population estimate of over 14.7 million. Data from 2008 Census show that the number of households using fixed phone is about 1.13 percent and 37.35 percent are using cell phone. Table 7: The List of Cell Phone Companies Rank Operator Technology Subscribers

(in millions Ownership

1 MobiTel GSM 2.172 (March 2009)

Royal Group, Brand "Cell Card"

2 Mfone GSM UMTS

1.000 (February

Cambodia Shinawatra Co. Ltd. by Shin Satellite and Asia Mobile

35

2011 Holding 3 Hello GSM 0.77 (December

2009) Axiata Group Berhad

4 Star cell GSM 0.14 [citation needed]

Applifone by TeliaSonera

5 qb UMTS 0.05 [citation needed]

Cambodia Advance Communication

6 EXCELL CDMA 2000 1x-EVDO

0.004 [citation needed]

GT-TELL

7 Metfone GSM UMTS LTE (trial)

7.3 Viettel Cambodia

8 Smart Mobile GSM Not yet available Latelz and Timeturns Holding 9 beeline GSM - VimpelCom(90%)

Sotelco

2.4.6.1.1. Cambodia Telephone System Definition: This entry includes a brief general assessment of the system with details on the domestic and international components. The following terms and abbreviations are used throughout the entry:

1. General assessment: adequate fixed-line and/or cellular service in Phnom Penh and other provincial cities; mobile-cellular phone systems are widely used in urban areas to bypass deficiencies in the fixed-line network; mobile-phone coverage is rapidly expanding in rural areas

2. Domestic: fixed-line connections stand at about 4 per 100 persons; mobile-cellular usage, aided by competition among service providers, is increasing rapidly and stands at 92 per 100 persons

3.International: country code - 855; adequate but expensive landline and cellular service available to all countries from Phnom Penh and major provincial cities; satellite earth station - 1 Intersputnik (Indian Ocean region) (2011)

1. Broadcast media: Mixture of state-owned, joint public-private, and privately owned broadcast media; 9 TV broadcast stations with most operating on multiple channels, including 1 state-operated station broadcasting from

36

multiple locations, 6 stations either jointly operated or privately owned with some broadcasting from several locations, and 2 TV relay stations - one relaying a French TV station and the other relaying a Vietnamese TV station; multi-channel cable and satellite systems are available; roughly 50 radio broadcast stations - 1 state-owned broadcaster with multiple stations and a large mixture of public and private broadcasters; several international broadcasters are available (2009)(12).(13)

2. Telephone/ FAX How to telephone to/from Cambodia Cambodian telephone numbers are usually listed beginning with a '0' (for example: 023-000000.) The first three numbers (010, 012, 016, 023, 063, 034...) represent the provincial area code or mobile phone system. When dialing domestically, it is necessary to dial the entire number including the '0' at the beginning. (for example: 023-000000) When dialing internationally to Cambodia, use the country code but exclude the '0' (for example: +855-23-000000). When dialing an international call from Cambodia, precede the phone number with gateway code such as 177 or 001 (for example: 177-662-251-0000). Purchasing phone number/SIM card Cell phones in Cambodia use SIM cards. You can purchase a SIM card and telephone number at one of the many phone shops scattered across town. SIM cards are also available just outside the arrival terminal at the Phnom Penh International Airport where it can be purchased for as little as $1.50. Valid passport and visa required.

2.4.6.1.2 Growth of Mobile Operators in Cambodia Mobile operators are keen to invest in Cambodia because they see a lot of potential for growth.

With a mobile penetration rate of just 25 per cent, there are still many Cambodians who do not have phones and this provides a unique opportunity. According to the government, the number of mobile phone users in Cambodia increased by nearly 15 per cent in 2008 reaching 3 million users by year’s end. The government expects to collect around $30 million in revenue in 2009 as a result of expanding domestic demand for mobile phone services. Collected revenue in 2008 was $28 million.

The Ministry of Posts & Telecommunications (MPTC) has granted 11 network licences to date (March 2009), eight of which have commenced operations with three more preparing to enter the market. Those already operating are: Hello GSM (TMIC), Mfone (Camshin), QB (Cadcomms), Star-Cell (Applifone), Excel, CamGSM, Metfone (Viettel), and Smart Mobile (Latelz). Luxembourg-based Millicom International via its CamGSM unit is Cambodia’s largest mobile phone operator with 55 per cent of the market. Thailand’s Shinawatra operates Camshin which is in second position with a market

12

https://www.cia.gov/library/publications/the-world-factbook/geos/cb.html 13

http://www.indexmundi.com/cambodia/telephone_system.html

37

share of 18 per cent. Telekom Malaysia International Cambodia (TMIC) is close behind with a 15 per cent share. TMIC launched its new brand identity ‘Hello’ in November 2007. The company has seen the number of its subscribers almost double during the past 12 months and is now Cambodia’s third largest operator. To meet the needs of its growing number of subscribers, Hello has announced the launch of the new prefix number 081. Customers using the new prefix will still receive the same benefits as existing customers using the provider’s 015 and 016.In February 2009, the company launched an unlimited international roaming package. This is Cambodia’s first unlimited roaming package and will cut the cost of going online through a mobile when travelling outside Cambodia. The Daily Unlimited Data Roaming Plan is aimed at the small segment of business and government travelers who travel throughout the region and wish to use the internet overseas. TMIC is investing $150 million in Cambodia to upgrade network capacity and add 500 new Base Transceiver Stations (BTS) for coverage in rural and provincial sites. o New operators

Smart Mobile became service provider number eight in March 2009. Smart Mobile has a Russian parent company, Latelz, which is 100 per cent owned by Timeturns Holdings? a Cyprus based company created by shareholders for managing and operating GSM/UMTS operators around the world. With Cambodia’s telecommunications sector growing so quickly, Smart Mobile is confident it can capture a significant share of the market and is investing heavily in infrastructure. ‚Smart Mobile is very excited to offer its services to mobile users in Cambodia,’ said the company’s CEO, Mr. Thomas Hundt. ‘We intend to be highly competitive with our pricing, service packages and promotions, and will also bring a fresh modern approach to customer service - one that focuses on living what we call the Smart life. ‚Smart Mobile has designed a new high-tech, community-minded Smart Store in the heart of Phnom Penh that is open to anyone,‛ adds Mr. Rattana Um, Smart Mobile’s Corporate Counsel and Spokesperson. ‚It’s the Smart Mobile goal to make quality mobile technology accessible to customers across Cambodia and make the Smart life available to everybody.‛ At the cutting edge Smart Store on Monivong Blvd, Phnom Penh, consumers will be able to learn about Cambodia’s newest mobile service provider and its offering, to subscribe to Smart Mobile, to add services out of Smart Mobile’s service portfolio and to receive support. Inside are free internet and gaming kiosks and a large video screen set up for multi-media presentations- including seminars on ‘Smart living’ or game contests? There is also a stage designed to feature local artists, and a T&C coffee shop where customers can relax and take it all in. Gracing one wall of the store

38

is a tribute to local Cambodian art and design and a ‘green’ booth is set up to focus on local organizations that are pitching in to help the environment and the community.14 o Cambodia mobile phone market structure

Mobile phone market in Cambodia becomes fierce in competition and complicated in market structure. Before 2008 the mobile market consisted of only four main players that enabling market expansion. The Royal Government of Cambodia is promising to provide political stability and economic growth, which is a key attraction to investment in telecommunication sector. Currently, the mobile phone market consists of eight private companies, including the new merged companies – Latelz and Applifone –in early January 2010. The perspective from operators’ side is that the mobile phone market is overcrowded (7). As a result, the mobile penetration rate is growing rapidly. The following table will provide information about technologies, market share and basic tariff fees (within and across networks) as well as data access from each operator Table 8: Data is from each operator’s website and Total Population 14.7 Millions (5) Operators technology Within

network Across network

Subscriber market share%

Data Access

Viettel GSM 900/1800MHz & 3G

6.5¢ 10¢ 5,700,000 (44.99%)

1$/day for 150MB

CamGSM GSM 900/1800MHz & 3G 5¢ 7¢ 5¢ 7¢ 2,900,000 (22.89%)

400KB = 1¢

MFone

EGSM 900, GSM 1800 MHz, CDMA 450MHz & 3G

7¢ 7.5¢ 1,500,000 (11.84%)

50KB = 1¢

Hello GSM 900/1800

MHz & 3G 8¢ 11¢ 1,180,000

(9.31%) 100MB/5 0¢

Latelz-Applifone

GSM 1800 MHz & 3G

5¢ 6¢ 800,000 (6.31%)

50KB = 1¢

Sotel Co EGSM 900 & GSM 1800 MHz

5¢ 6.7¢ 500,000 (3.95%)

450Kb - 1¢

14

http://www.web-cambodia.com/en/article/Mobile_Operators_in_Cambodia-36045.html

39

Cadcomm MMS

3G 5¢ 7¢ 50,000 (0.39%)

1MB/¢

GT-Tell CDMA 1800MHz 5¢ 7¢ 40,000 (0.32%)

3$=1.5G B

Surprisingly, mobile phone and Internet penetration rates have grown noticeably. The mobile penetration rate has increased rapidly nineteen times from just 2004 to 2011. There were only 660,993 subscribers in 2004 and 12,500,000 subscribers in 2011. Cambodia was considered one of the fastest-growing mobile phone markets in the world, as mobile phone subscribers surpassed fixed phone subscribers in the market (4, 18). In 2011, the mobile penetration rate was 91%, and it is expected to increase more than 100%. Although Internet subscribers have increased eighty-eight times from 7,671 subscribers in 2004 to 680,000 subscribers in 2011, it is only 5%, which is still relatively low compared to whole population (7). In 2011 based on MPTC data among the operators, Vietnam's Military Telecom Corporation (4) captured the market share quickly up to 45% since it launched in February 2009 (4).15 o Mobile networks in Cambodia

Cambodia is one of the poorest countries in Southeast Asia, however, the telecoms infrastructure is expanding rapidly and the use of mobile phones is becoming increasingly popular. According to the Ministry of Post and Telecommunications, the number of mobile phones users increased from 3.8 million in 2008 to 6.3 million in 2009, and up to 9.8 million in 2010. Nowadays, five major mobile networks compete with each other for a share of Cambodia’s mobile market. Mobile phones in Cambodia are increasingly common and expats have a total of nine mobile phone operators to choose from. This may seem like a lot for a relatively small country like Cambodia with a population of only 15 million.SIM cards are sold everywhere so it may be possible for you to arrive with an unlocked phone and just use a Cambodian SIM card for your stay. There are multiple phone booths where you can get a SIM card the moment you arrive at the airport. SIM cards are sold for US$5 which includes US$10 credit. It is even possible to top up your SIM card with a minimum of US$1. Calls within Cambodia have a low rate that costs between 5-8 cents per minute; however, it depends on the network and time of day. International calls cost approximately 20 cents per minute. Mobitel/Cellcard, Beeline, Smart Mobile, Excell and MetFone all have different rates and different level of coverage.16

15

http://www.econstor.eu/bitstream/10419/72493/1/742717844.pdf 16

https://www.justlanded.com/english/Cambodia/Cambodia-Guide/Telephone-Internet/Mobile-phones

40

Metfone with Viettel is Cambodia’s largest mobile phone provider. A subsidiary of Vietnam’s military-run telecoms provider, Metfone offers Internet, mobile and fixed line services.

Mobitel/Cellcard is Cambodia’s second largest mobile phone provider with 2.6 million subscribers, about a 16% share of Cambodia’s mobile market. Mobitel is also a broadband Internet and fixed line provider and offers plans for people who make a lot of international calls.

Beeline offers a wide range of wireless, fixed and broadband technologies Smart Mobile has five million subscribers and offers call plans, international calls, international

roaming and mobile Internet (2.5G & 3.75G). Excell is Cambodia’s only mobile service to use CDMA technology, which does not use SIM

cards and requires subscribers to buy phones made for the service. o Making phone calls Using the phone in Cambodia

The telecommunication infrastructure has developed a lot in Cambodia over the past couple of decades. Making phone calls is easy and there are also chances to save money on international phone calls if you use the right provider.17 A. Local phone calls

If you would like to make a phone call within Cambodia, you usually dial the entire number with a ‚0‛ at the beginning of the number e.g. 012-000-000, 078-000-000. The area codes are listed below and only fixed local numbers should be added, e.g. 053-000-000 Battambang, 042-000-000, Kampong Cham. Table 9: Local phone calls Battambang 53 Kampong Cham 42 Kampong Chhang 26 Kampong Speu 25 Kampong Thom 62 Kampot 33 Kandal 24

Phnom Penh 23 Poipet (Paoy Paet) 54 Pursat 52 Siem Reap 63 Sihanoukville 34 Sisophon (Saophoan) 54 Suong 42 Ta Khmau 23

Mobile Penetration Cambodia is the first country in the world to have more mobile telephones than fixed telephones.

There are 8.151 million mobile phones in use in 2010 as compared to 358,800 main telephone lines; that is

17

https://www.justlanded.com/english/Cambodia/Cambodia-Guide/Telephone-Internet/Making-phone-calls

41

55 per 100 persons versus 2 per 100 persons. This is impressive growth considering only 1 million mobile phones were in use in 2005.Mobile-cellular phone systems are widely used to bypass deficiencies in fixed-line network. While majority of mobile phone users are located in the capital, Phnom Penh, mobile phone coverage is rapidly expanding in rural areas, aided by competition among service providers. Although the cell phone market in Cambodia has exploded as of late, they are still far behind when compared to neighboring countries. Its nearby neighbors have high market penetration, such as the Philippines with 71 percent and Thailand with 78.5 percent. Even Vietnam has a significantly larger cell phone market with 40 percent of the country accessing cell phones.

Figure 4: Statistics in Cambodia users

2.4.6.1.3. General Situation of Telephone Services 1. Telephone Service Ministry of Posts and Telecommunications (the MPTC) is a policy-maker and regulator in the field of telecommunications in Cambodia. The MPTC was also an operator of the fixed line network but, in January 2006, separated its telecom operation arm and established a new public enterprise called ‚Telecom Cambodia‛, having provided its own assets equal to US$ 40.3 million and 700 staff members,

42

to provide fixed line service with the 023 prefix. Telecom Cambodia is said to have been instructed by the RGC to list on the Cambodian Stock Exchange in 2012. Although Cambodian telephone-density has increased in 2008 more than six times as a whole since 2004 as shown in below table, the fixed-line subscribers have been slow to grow. Cambodian telephone-density at the end of 2008 was 30.93 of which 30.61 was occupied by mobile phone subscribers. In other words, 99.0% of all the telephone subscribers use mobile phones. Table 10: Telephone Subscribers and Coverage Population 2005 2008

12,824,170 13,395,682

Subscribers

Fixed Line 37,590 43,417

Mobile

660,933 4,100,000

Sub-total

698,523 4,143,417

Coverage

Fixed Line 0.29 0.32

Mobile

5.15 30.61

Sub-total 5.44 30.93 Source: National Strategic Development Plan Update 2009-2013 2. Telephone Service Providers In Cambodia, there are three providers of fixed-line telephone service, namely Telecom Cambodia, Camintel and Camshin, but Telecom Cambodia dominates the fixed-line service. The company also operates the connection to international calls. Currently there are eight providers for mobile phone service and the provider names and service are summarized in below table.

43

Table 11: Mobile Telephone Service Providers Brand Name Prefix Operating Company

Cellcard (Mobitel) 012/ 017/ 077/ 078/ 089/ 092/ 095 CamGSM (Royal Group+Millicom International) Metfone 088/ 097 Viettel (Cambodia) Pte.,Ltd Smart mobile 010/ 069/ 070/ 086/ 093/ 098 Latelz Co., Ltd Beeline 066/ 067/ 068/ 090 Sotelco Ltd. (Vimpelcom Group) Mfone 011/ 061/ 076/ 085/ 099 Mfone Co., Ltd Hello 015/ 016/ 081/ 087 Hello Axiata Co., Ltd Qb(Cadcomms) 013/ 080/ 083/ 084 Cambodia Advanced Communications Co.Ltd ExCell 018 GT-Tell (Cambodia) Investment Company Ltd.

Source: CDC Japan Desk For international calls, all the mobile telephone service providers provide the VoIP service with to most of the destinations in the world. The call rates are rather affordable ranging between US$0.06 to 0.50 per minutes, although the voice quality is not satisfactory yet to some destinations. 3. Internet services

Internet was introduced to Cambodia in 1997 by the MPTC with support from the International Development Research Center (IDRC) of Canada and Telecom Cambodia now runs internet service under the name of CamNet. Optic fiber was installed with assistance of German KfW in 1999 from Thailand to Vietnam through a route of Poipet – Battambang – Phnom Penh – Bavet. In addition, a loan agreement for ‚Greater Mekong Telecommunication Backbone Network Project (Cambodia Growth Corridor)‛ was signed in March 2005 between the Cambodian Government and JBIC and a project to install the total length of 400 km of optic fiber connecting Kampomg Cham, Phnom Penh and Sihanoukville has already started.As a part of ‚GMS Information Superhighway‛ project, 650 kilometers optic fiber cable laying has been completed in July 2009. The optic fiber cable links Cambodia, China, Lao PDR, Myanmar, Vietnam and Thailand. The cable runs from Siem Reap to Kampong Cham, to Memot and then Lao border. At Siem Reap, it links with the existing line which runs from Vietnam border to Thai border. It is said that the optic fiber cable network now covers two thirds of Cambodia.As of November 2011, there were about 33 ISP licenses issued. ‚Camnet‛, ‚Online‛, ‚TeleSurf‛, ‚Camintel‛, ‚Metfone‛, ‚CityLink‛, ‚WiCam‛, ‚Clicnet‛ and ‚Ezecom‛ are among them. The number of internet subscribers was 20,108 in 2008 and 291,413 in 2009 and was estimated to grow to 350,000 in 2010. MPTC projects that it will grow to 400,000 in 2011, 450,000 in 2012 and 500,000 in 2013 in the ‚National Strategic Development Plan Update 2009-2013‛.

44

4. Postal services Cambodia Post (C.P.) was established as a public enterprise with state company characteristics by Sub-Decree ##57 (RGC) on Establishment of Cambodia Post as Public Enterprise dated on 21 June 2010. Under the Sub-Decree, it is determined that CP shall be a national operator of the postal sector and shall have the following duties and rights.

1. to provide services, receive, collect, transport and distribute all postal mail of all types including Express Mail Service (EMS) inside and outside the country;

2. to sell other materials or products for serving the postal and telecommunications sector; 3. to operate postal financial and banking services; 4. to develop a list of charges for postal services for inside and outside Cambodia; 5. to establish postal offices in the Kingdom of Cambodia; 6. to obtain rights for the use of postal stamp machines for serving the postal sector; 7. to cooperate with companies and institutions in the country and abroad in conducting the postal

business; 8. to enter into a loan contract from other resources for further investment with approval from the

Ministry of Posts and Telecommunication and the Ministry of Economy and Finance; The initial capital of C.P. shall be determined by the MPTC and the MEF and the staff of C.P. shall be recruited from officers of the MPTC. MPTC currently aims to increase the number of postal station and reduce the number of client per station as shown in below table.18 Table 12: Number of Client per Postal Station

Particular 2008 2009 2010 2011 2012 2013

# of Client per Station 161,445 163,932 140,968 125,256 111,286 101,147

Source: NSDP Update 2009 – 2013

18

http://www.cambodiainvestment.gov.kh/investors-information/infrastructure/telecommunications.html

45

2.4.6.1.4. Cambodia Mobile Network Operators of the Asia List for Cambodia among each country As of June 2013, the penetration rate in Cambodia was estimated at 69.318% over a population estimate of over 14.7 million. Table 13: Cambodia network operators of the Asia 1

Rank Operator Technology Subscribers (in millions)

2 Grameenphone

GSM-900/1800 MHz (GPRS, EDGE) 2100 MHz UMTS, HSPA,HSPA+

49.088[9] (May 2014)

Telenor (55.8%),Grameen Telecom(34.2%) and Publicly held (10%)

3 Banglalink

GSM-900 MHz (GPRS,EDGE) 2100 MHz UMTS, HSPA,HSPA+

29.626[9] (May 2014)

Orascom Telecom(100%)

4

Robi GSM-900/1800 MHz (GPRS, EDGE) 2100 MHz UMTS, HSPA,HSPA+

24.077[9] (May 2014)

Axiata Group Berhad(92%) and NTT DoCoMo(8%)

5

Teletalk GSM-900/1800 MHz (GPRS, EDGE) 2100 MHz UMTS, HSPA,HSPA+

3.525[9] (May 2014)

State-owned (100%)

6

Citycell 800 MHz CDMA2000 1x RTT, EV-DO Rev.A

1.433[9] (May 2014)

Pacific Group & Far East Telecom Limited (55%) and SingTel (45%)

Cambodia’s telecom sector continues to grow The expansion of the internet in Cambodia has been largely overshadowed by the strong focus on mobile services. Internet take-up rates remained disconcertingly low for many years, with the country claiming one of the lowest internet penetrations in the region. The limited fixed-line infrastructure had been a major inhibiting factor in the roll-out of both dial-up and DSL internet services. The market started to shift in 2007 when wireless broadband services began to appear, offering an effective alternative fixed access

46

service to DSL. By 2014, however, fixed broadband internet penetration remained extremely low. By contrast, mobile broadband was expanding rapidly at the same time boosting online activity generally; as with telephony, mobile services were again clearly ‘filling the gap.19

Table 14: Cambodia - key telecom parameters – 2011 - 2014

Category 2012 2013 2014 (e)

Fixed-line services:

Total No. of subscribers 584,000 420,900 450,000

Internet services:

Total No. of fixed broadband subscribers 30,000 32,600 40,000

Mobile services:

Total No. of subscribers 19.1 million 20.3 million 21.3 million

(Source: BuddeComm)

19

http://www.budde.com.au/Research/Cambodia-Telecoms-Mobile-Internet-and-Forecasts.html

47

2.4.6.2. Radio Service in Cambodia In 2009 Cambodian broadcasters were a mixture of state-owned, joint public-private, and privately owned companies. Hence .In 2009 there were roughly 50 radio broadcast stations - 1 state-owned broadcaster with multiple stations and a large mixture of public and private broadcasters. Several international broadcasters are also available.

2.4.6.2.1 Radio Stations in Cambodia 1. List of radio stations

Voice of Youth FM91.5 launched in April 2014 covering Phnom Penh, nearby provinces and soon nationwide.

TOWN Radio FM 102.25 MHz TOWN RadioFM 95.7 MHz Battambang TOWN RadioFM 90.7 MHz Siem Reap TOP Radio FM 92.3 MHz Entertainment Radio Phnom Penh Radio FM 103 MHz Dance FM Phnom Penh's number 1# station NRG 89 fm. Phnom Penh's 1st dedicated music station, broadcasting 24hours a day. Radio Love FM 97.5 MHz - Cambodia's local western pop music radio station. Radio Australia 101.5 FM Phnom Penh & Siem Reap available 24 hours a day BBC World Service Radio FM 100. Broadcasting 24 hours a day. Available in and around Phnom

Penh (2007). Apsara Radio FM 97 MHz Family FM 99.5;MHz National Radio Kampuchea (RNK) AM 918 kHz and FM 96 Radio Beehive FM 105 MHz Radio FM 90 MHz Radio FM 99 MHz Voice of America(VOA):www.voanews.com/khmer Radio Free Asia Radio Khmer FM 107 MHz Radio Sweet FM 88 MHz

48

Royal Cambodia Armed Forces Radio FM 98 MHz Women's Radio FM 102 MHz of Women's Media Centre of Cambodia- Using media to promote

social change in Cambodian society. Sarika FM 106.5 MHz Radio FM 104.5 MHz (http://www.hangmeasfm.com/) Radio FM 95.7 MHz (http://www.hangmeasfm.com/)

2.4.6.2.2. In Phnom Penh Service

Table 18: Phnom Penh Stations 1. Apsara Radio FM 97 2. DAP Radio FM 93.75 3. Family FM 99.5 4. Hang Meas Radio FM 104.5 5. Koh Santepheap Daily FM 87.75 6. National Radio Kampuchea 7. Phnom Penh Radio FM 103 8. Radio FM 90.5 9. Radio Beehive FM 105

10. Radio Free Asia 11. Radio Khmer FM 107 12. Radio Love FM 97.5 13. Radio Town FM 102.3 MHz 14. Raksmey Hang Meas Radio FM 95.7000 15. Royal Cambodia Armed Forces Radio FM

98 16. Voice of America Khmer 17. Women's Media Centre of Cambodia

(WMC) Radio FM 102

2.4.6.2.3 Provincial Stations Table 19: There are radio stations in each of the following provinces:

1. Banteay Meanchey, 2. Battambang, 3. Kampong Cham, 4. Kampong Thom, 5. Kampot, 6. Kandal, 7. Pailin, Preah Vihear, 8. Siem Reap, 9. Sihanoukville 10. and Svay Rieng.

49

2.4.6.3. Television Service in Cambodia Television Overview

Cambodia launched a test television station; its call sign is XUTV, which began broadcasting in 1966. The station was part of state-owned Radio diffusion National Khmer in 1970, operating 12 to 14 hours daily, with advertising as its primary income. Its studios were destroyed by the Khmer Rouge in 1975, halting the role of television during the Khmer Rouge era. In 1983, the government launched another station, TVK, under the Vietnamese-backed People's Republic of Kampuchea regime. It began broadcasting in color from 1986. There was only one station until the 1992, when private companies began to launch their own stations, the first being TV9 and TV5. All of these stations have local programming, including serials, variety shows and game shows. Thai soap operas (dubbed in Khmer) were extremely popular, until a backlash following the 2003 Phnom Penh riots, after which Thai programs were banned. Cable television including UBC programming from Thailand as well as other satellite networks is also widely available in Cambodia. Many people in Cambodia do not watch Cambodia-produced television, instead applying for UBC from Thailand to view Thai programs. Cambodians living abroad can watch Khmer television content via Thaicom from Thailand, Myanmar, and Vietnam. Most television networks in Cambodia shut down in the evening. Since 2008, the governments have allowed TV channels to close at 12.00 a.m. (midnight) and resume at 6.00 a.m.

2.4.6.3.1 Cambodian Television Network Cambodian Television Network (CTN) was launched in March 2003 as a joint venture between local conglomerate the The Royal Group and Stockholm-based Modern Times Group, this free-to-air terrestrial television channel Cambodian Television Network (CTN) is now part of Mobitel. CTN provides viewers with a variety of entertainment and educational programmes, which includes home-grown documentaries, computer learning programmes and sitcoms. The channel has also bought rights to Sunday English Premier League football matches, European comedies and Asian and South American dramas. International news is transmitted to CTN's broadcast facility at Srok Takhmao via satellite from London, enabling the channel to offer international and Asian news. CTN is available through the website and mobile applications.

50

Table 20: Cambodia Television Network-Transmitters

Location Channel Power (kW) Key station: National Road 2, Srok Ta Khmao, Kandal Province ch E21 10 kW Banteay Meanchey (Sisophon) ch E25 0.5 kW Battambang ch E21 0.5 kW Kampong Cham ch E24 0.5 kW Kampong Thom ch E29 0.5 kW Pursat ch E30 0.5 kW Siem Reap ch E23 0.5 kW Sihanoukville ch E21 Svay Rieng ch E26 0.5 kW Key station: National Road 2, Srok Ta Khmao, Kandal Province ch E21 10 kW

2.4.6.3.2. Television Stations in Cambodia In 2009 there were 9 TV broadcast stations with most operating on multiple channels, including 1 state-operated station broadcasting from multiple locations, 6 stations either jointly operated or privately owned with some broadcasting from several locations, and 2 TV relay stations - one relaying a French TV station and the other relaying a Vietnamese TV station. Multi-channel cable and satellite systems are also available.

1. Table 21: List of Broadcast and cable networks 1.Apsara Television (TV11) 2.Bayon Television 3.Bayon News Television 4.Cambodia Cable Television (CCTV) 5.Cambodian News Channel (CNC) 6.Cambodian Television Network (CTN) 7.CTV 8 HD 8.DTV STAR (Digi)

9.Hang Meas HDTV 10.Khmer Television 9 HDTV (TV9 HDTV) 11.My TV 12.National Television of Cambodia (TVK) 13.One TV (Cambodia)|One TV (Royal Media 14.Entertainment Corporation, LTD) 15.Phnom Penh Municipal Cable Television (PPCTV Co., LTD) 16.Phnom Penh Television (TV3) 17.Royal Cambodia Armed Forces Television (TV5)

51

2. Provincial television stations Kandal Province - Broadcasting on channel 27, Bayon Television is Cambodia's only UHF channel. A private television company belonging to Prime Minister Hun Sen, it also operates Bayon Radio FM 95 MHz. It was established in January 1998.

1. Mondulkiri - Established in 1999, relays TVK on channel 10. 2. Preah Vihear - Established in 2006, broadcasts on channel 7. 3. Ratanakiri - Established in 1993, relays TVK on channel 7. 4. Siem Reap - Established in 2002, relays TV3 on channel 12.

2.4.6.3.3 List of Terrestrial Television Stations

Table 22: List of television networks by country (Cambodia) 1.Bayon TV 2.CTV 9 (Cambodia) 3.CTN (Cambodia TV Network) 4.CTN International

5.TV5 Cambodia 6.TVK 7.TV3 Cambodia 8.Apsara TV 9.MyTV 10.SEATV (Southeast Asia Television)

Table 4: Face book States in Cambodia – TV channel

52

Table 5: Fastest Growth pages in Cambodia

Table 6: Face book pages stats in Cambodia

53

2.4.6.4. Internet Service in Cambodia Currently, there are seven internet service providers (ISPs), namely, Camnet, Bigpond (CogeTel),

Open Forum, CaminTel, Telesurf, Camshin, and Casacom. Broadband internet services are now being provided through ADSL wireless service or optic fiber in Phnom Penh. Expansion has occurred especially in rural areas of 24 provinces/municipalities, where more people are gaining access to e-mails and the internet. However, the cost of telecommunications remains high and burdens the entire population as well as businesses in Cambodia. During 2012 Internet access was somewhat available to the people of Cambodia, particularly in urban centers, and some 50 percent of Cambodians were able to access the Internet through their mobile phones, according to the Ministry of Posts and Telecommunications. Internet Users: 738,641 users, 122nd in the world; 4.9 per 100 persons, 187th in the world (2012) Fixed broadband: 30,653 subscriptions, 121st in the world; 0.2 per 100 persons, 158th in the

world (2012) Mobile broadband: 1,032,781 subscriptions, 70th in the world; 6.9 subscriptions per 100 persons,

100th in the world (2012) Internet Hosts: 13,784 hosts, 129th in the world (2012)

1. Access to internet Access to internet facilities is gaining momentum in the country. Internet is accessible only to 4.5 percent households in the urban areas and most of these households have access to internet outside their home. The use of internet in rural areas is still low. Table 23: Internet in rural areas Type of Internet Access

Households

Total Urban Rural Number 2,917,637 506,579 2,311,058 Total 100 100 100 No access 98,93 95,48 99,68 Access at home 0,11 0,43 0,04 Access outside home 0,85 3,64 0,24 Access at home and outside home 0,11 0,45 0,04 Source: National Institute of Statistics, Cambodia 2008

54

2. Internet Services - Internet Access Services + Dial up service

+ Broadband services: ADSL/Leased Internet, - Wireless Internet ( WiFi, WiMAX ) - Cable Modem (FTTH)

- Satellite Broadband Internet Access +Web hosting

- Satellite Broadband Internet (SBI): + Local SBI Hub: iPSTAR Satellite, Hybrid Ku/Ka band + Total subscriber: around 1000

3. Other Services - DNS .KH:641(.com.kh, .gov.kh, .edu.kh, .org.kh, net.kh,.per.khand .mil.kh) - Internet Café: 229118 in Phnom Penh - 111 in other provinces

2.4.6.4.1. Internet for Development in Cambodia Cambodia is a latecomer to the internet with commercial services only launched in 1997. It has the dubious distinction of having the lowest internet penetration in South East Asia as well as the highest pieces. The question is dose Cambodia has high internet prices because it has a small market or is the market small because the prices are high? One is related to the other, since, without a larger market, Cambodia cannot benefit from economic of scale to reduce costs. A part from the obvious barrier of poverty, exasperated by exceptionally faces a combination of distinct factors that inhibit the expansion of the internet. These include the lack of a vibrant academic community that could help nurture and sustain networking, the complexity of computerizing the written Khmer language, which hinders local application development an extreme shortage of dial-up telephone lines needed to access the internet and government policies that have restricted internet supply.

55

2.3.6.4.2. Internet Usage and Population Statistics

Table 24: Internet usage in Cambodia from 2000-2012

YEAR Users Population % Pen. GDP p.c.* Usage Source

2000 6,000 12,573,580 0.05 % US$ 380 ITU

2007 44,000 15,507,538 0.3 % US$ 648 ITU

2009 74,000 15,507,538 0.3 % US$ 775 ITU

2010 78,000 15,507,538 0.5 % US$ 805 ITU

2012 742,220 15,458,332 5.0 % US$ 820 FB

Note: Per Capita GDP in US dollars, source: United Nations Department of Economic and Social Affairs.

I. INTERNET USERS IN ASIAN A. Figure 7: Internet users in Asia 2014

56

B. Table 25: Internet Usage in Asia Internet Users, Face book Subscribers & Population Statistics for 35 countries and regions in Asia

INTERNET USERS AND 2014 POPULATION STATISTICS FOR ASIA

ASIA REGION

Population ( 2014 Est. )

Pop. %

World

Internet Users 30-Jun-2014

Penetration (%

Population)

Internet % Users

Facebook 31-Dec-2012

Asia Only 3,996,408,007 55.6 % 1,386,188,112 34.7 % 45.7 % 254,336,520

Rest of World

3,185,998,558 44.4 % 1,649,561,228 51.8 % 54.3 % 721,607,440

WORLD TOTAL

7,182,406,565 100.0 % 3,035,749,340 42.3 % 100.0 % 975,943,960

NOTES: (1) Asia Internet Usage and Population Statistics were updated for June 30, 2014. (2) Asia Face book subscribers are for December 31, 2012. (3) Population estimates are based mainly on data from the US Census Bureau. (4) The most recent usage comes mainly from data published by Nielsen Online , ITU , Social Bakers, Facebook country statistics and other trustworthy local sources. (5) For navigation help, definitions and methodology see the site surfing guide. (6) Data on this site may be cited, giving the due credit and establishing an active link back to Internet World Stats . Copyright © 2014, Miniwatts Marketing Group. All rights reserved worldwide.

B. Figure 8:Internet Penetration in Asia 2014

57

C. Figure 9: Asia Top Internet Users

II. Internet Users In The World A. Figure 10: Internet users in the world by Regions

58

B.INTERNET USAGE STATISTICS: Table 26: World Internet Users and 2014 Population Stats

WORLD INTERNET USAGE AND POPULATION STATISTICS JUNE 30, 2014 - Mid-Year Update

World Regions Population ( 2014 Est.)

Internet Users Dec. 31, 2000

Internet Users Latest Data

Penetration (%

Population)

Growth 2000-2014

Users % of

Table

Africa 1,125,721,038 4,514,400 297,885,898 26.5 % 6,498.6 % 9.8 %

Asia 3,996,408,007 114,304,000 1,386,188,112 34.7 % 1,112.7 % 45.7 %

Europe 825,824,883 105,096,093 582,441,059 70.5 % 454.2 % 19.2 %

Middle East 231,588,580 3,284,800 111,809,510 48.3 % 3,303.8 % 3.7 %

North America 353,860,227 108,096,800 310,322,257 87.7 % 187.1 % 10.2 %

Latin America / Caribbean

612,279,181 18,068,919 320,312,562 52.3 % 1,672.7 % 10.5 %

Oceania / Australia

36,724,649 7,620,480 26,789,942 72.9 % 251.6 % 0.9 %

WORLD TOTAL

7,182,406,565 360,985,492 3,035,749,340 42.3 % 741.0 % 100.0

%

NOTES: (1) Internet Usage and World Population Statistics are for June 30, 2014. (2) CLICK on each world region name for detailed regional usage information. (3) Demographic (Population) numbers are based on data from the US Census Bureau and local census agencies. (4) Internet usage information comes from data published by Nielsen Online, by the International Telecommunications Union, by GfK, local ICT Regulators and other reliable sources. (5) For definitions, disclaimers, navigation help and methodology, please refer to the Site Surfing Guide. (6) Information in this site may be cited, giving the due credit towww.internetworldstats.com. Copyright © 2001 - 2014, Miniwatts Marketing Group. All rights reserved worldwide.

59

C. Figure 11: Internet Users in the World by Geographic

D. Figure 12: Internet Penetration Rates by Geographic Regions

60

2.4.7 Telecommunications Market Structure Telecom in Market Structure - There has also been some major developments in Cambodia’s telecommunications sector. In 1990, the first full year of peace, most of the communications infrastructure in the country was outdated and there was extensive damage to the fixed line network. There were 0.032 phones for every 100 people or a total of only 3,115 fixed lines. In 1995, the ITU and UNDP helped prepare a master plan for the sector, which focused mainly on the installation of fixed line facilities, and resulted in some very limited improvements in connectivity (mainly in the capital Phnom Penh). Since then, the sector has been characterized by a high level of foreign and private investment. There is no incumbent telecommunications company in the traditional sense. Telecom Cambodia was only established in January 2005. The assets of Telecom Cambodia were transferred from MPTC which, prior to the establishment of Telecom Cambodia, was also an operator. These assets principally comprised some long distance backhaul network and a limited number of fixed line connections. Most of the growth and development has been in mobile communications, as is the case elsewhere in the world. In Cambodia this was achieved through a policy of foreign investment promotion, private participation, and light-handed regulation. Four mobile operators are offering services as of December 2007:

1. Mobitel – established in 1996 as a joint venture between Luxembourg-based Millicom International and the Royal Group of Cambodia;

2. Hello GSM – Telekom Malaysia International (Cambodia) Co. Ltd (TMIC), a subsidiary of Malaysian company Telekom Malaysia Berhad (TM);

3. Camshin – trades under the name Camshin, is a subsidiary of Shin Satellite PLC, Thailand 4. Starcell (owned by Applifone Company Limited) – currently operational only in Phnom Penh.

Estimated market shares for the above operators are shown in Annex 5. Viettel and Cadcomms are due to launch mobile services in 2008. According to ITU estimates, in 2006, there were 1.14 million mobile subscribers, or 8 mobiles per 100 persons, compared to 32,800 fixed lines, or less than 1 per 100 persons. At the end of 2006, reports estimated that there were over 1.5 million mobile subscribers with the number of subscribers growing at a rate of around 35% per annum. In 2007, publicly reported figures from Millicom, Shin Corporation and TM for the second quarter suggest that there are in excess of 2 million subscribers, or a national teledensity of 14 percent.20

20

http://www.wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2009/06/04/000333038_20

090604014018/Rendered/PDF/486210replacem1s0previous0document1.pdf

61

2.4.8. Communication Tourism in Cambodia The advent of mobile phones has dramatically improved communications between the main towns. That said, many of the landlines destroyed during the Khmer Rouge era have yet to be replaced, and the lack of phone lines not only hinders ordinary business but also keeps Internet access costs high everywhere except Phnom Penh and Siem Reap. It's only been a few years since mail destined for Cambodia had to be collected in Bangkok, but the postal service is now reasonably reliable, although inbound letter that attract the attention of staff-there's no rhyme or reason to this-often get pilfered. So we will showing some communication as business in Cambodia as following 1. Mail All Cambodia's mail is consolidated in Phnom Penh. Sending mail from provincial cities seems as reliable as posting from the capital, though it costs a little more as you'll be charged for your mail to go to Phnom Penh first. Within the capital itself, only the main post office is geared up to accept mail bound for abroad. Mail to Europe, Australasian and North America takes between five and ten days to arrive, leaving Phnom Penh for major international destinations around twice a week the specific days can be checked at the main post office. Stamps for postcards sent from the capital cost 1800 Riel to Europe and Australia, 2100 Riel to America (add 300 Riel if posting from the provinces).Parcels can only be posted in Phnom Penh, though at a whopping $17 for a one kilogramme parcel going abroad, it's worth deferring the task if you are subsequently heading to Thailand. You'll be charge 3000 Riel for the the customs form, detailing the contents and their value, to be completed, but it isn't necessary to leave the package open for checking. Post offices sell mailing boxes if you need them. 2. Phones You can make domestic and international calls at post offices or telecom offices in most towns. The government telecommunications network; Camintel (W) (www.camintel.com) usually runs these services, which along with the Australian firm Telstra, also runs public call boxes in Phnom Penh. To use these, you'll need a phone card, available in denominations ranging from $2 to $50; look for shops displaying the phone cards can't be used in each other's facilities, but with a Tele 2 phone card, you can make international calls from any call box by dialing the access code (T) 007 (instead of the usual (T) 001), then the country code and number as usual. With any of these options, making international calls is expensive at around $3 per minute, so It's worth looking out for deals offered by internet shops, guesthouses and travel agents, which can as much as halve the cost. For domestic calls only, the cut-price glass-sided booths, payable to the attendant. The booths vary in their coverage of Cambodia's various networks: accessible numbers will be written on the side of the booths (usually (T) 012 MobiTel numbers - see

62

below - plus the local area code and sometimes other mobile providers).Faxing is extortionate in Cambodia, at $3-$6 per page. If you really must send a fax, the hotel business central and internet shops are the most reliable place to do so. 3. Mobile Phone There are five mobile phone service providers in Cambodia: MobiTel (T) 012, Beeline (T) 090, Smart Mobile (T) 010 & 016, Cube (T) 013, MetFone (T)097. MobiTel is the most widely used network and has transmitters in all major towns, although reception is still limited to within the town boundaries. Tourists can buy Sim Card for their mobile phones at arrival terminal of all airports in Cambodia and border Checkpoint. Usage is by pre-paid phone card, available in values from $2 to $100; in most towns, you'll find outlets displaying the logos of the various providers. When you get your card, scratch off the panel on the back to reveal your PIN, and then call up the top-up number-also given on the card-and enter the number to activate the card. Call rates are around $0.20 per minute within the same mobile network number or out to a local landline. 4. Internet access If you want to get online, do it in Phnom Penh or Siem Reap - here you're never far from an Internet shop or café and rates are under $1 per hour. Currently free Wi-Fi is available at most hotels, restaurants, Mini Mart, Café and shopping mall. In the provinces it's a different matter: even in Battambang and Sihanoukville access is limited, and expensive at around $3 per hour. One of the best ways to keep in touch while traveling is to sign up for a free email address that can be accessed from anywhere, for example Yahoo Mail, Gmail, Outlook or Skype or Facebook. Once you've set up and send mail from any Internet Café, or from a hotel with Internet access.There are Internet Service Providers in Cambodia such as Online, AngkorNet, Mekong Net, WirelessIp, Ezecom with reasonable price. Prepaid Internet Card is available at any shops and super markets and price is starting from $5 to $100.The restaurants and café shop like the M Café, Café Sentiment, T & C Coffee, Global Coffee, True Coffee, Kiriya Coffee and more offer free internet access with WI-FI - there you just bring your own laptop only.21

21

http://www.tourismcambodia.com/tripplanner/general-travel-information/communication.htm

63

2.5. ASEAN ICT Master Plan 2015 with Policy of ICT Development in Cambodia 2.5.1 ASEAN ICT Master Plan This year marks ten years of ASEAN cooperation in the ICT sector. Over the last decade, ministers, policy, makers, regulator and industry have come together to develop the ICT landscape within ASEAN. Whether we deserve to pat ourselves on our backs depends very much on which angle you are viewing our achievements.

2.5.1.1 Background of ASEAN The Association of Southeast Asian Nations, or ASEAN, was established on 8 August 1967 in

Bangkok, Thailand, with the signing of the ASEAN Declaration (Bangkok Declaration) by the Founding Fathers of ASEAN, namely Indonesia, Malaysia, Philippines, Singapore and Thailand. Brunei Darussalam then joined on 7 January 1984, Viet Nam on 28 July 1995, Lao PDR and Myanmar on 23 July 1997, and Cambodia on 30 April 1999, making up what is today the Ten Member States of ASEAN.

Figure 13: ASEAN Members state

A. The Founding of ASEAN

On 8 August 1967, five leaders - the Foreign Ministers of Indonesia, Malaysia, the Philippines, Singapore and Thailand - sat down together in the main hall of the Department of Foreign Affairs building in Bangkok, Thailand and signed a document. By virtue of that document, the Association of Southeast Asian Nations (ASEAN) was born. The five Foreign Ministers who signed it - Adam Malik of Indonesia,

64

Narciso R. Ramos of the Philippines, Tun Abdul Razak of Malaysia, S. Rajaratnam of Singapore, and Thanat Khoman of Thailand - would subsequently be hailed as the Founding Fathers of probably the most successful inter-governmental organization in the developing world today. And the document that they signed would be known as the ASEAN Declaration. B. Land Area and Population

AMSs span over an area of 4.46 million km2 with a population of approximately 584 million people (8.7% of the world population) in 20081. The most populous country in ASEAN is Indonesia, where 232 million people or about 40% of the total ASEAN population are living followed by Philippines (88 million) and Viet Nam (87 million). The country with the smallest population in ASEAN is Brunei Darussalam (0.4 million). There is also variation across the region in terms of land area. Land area ranges from under 704 km2 in the case of Singapore to over 1,860,380 km2 for Indonesia. Population density ranges from 24 people per km2 in Lao PDR to nearly 300 times this density in Singapore, at 6,844 people per km2. Figure 2-2-1 illustrates the population density of AMSs. In Indochina peninsula, the population density is particularly high at flood plains of major rivers downstream, such as the Ayeyarwady River in Myanmar, the Chao Phraya River in Thailand, the Mekong River and the Hong River in Viet Nam. Java and Bali Islands in Indonesia as well as Luzon, Negros and Cebu Islands in Philippines are also densely populated.

Internet User With more than 600 million people, the ASEAN region is a formidable presence in the Internet.

As of 2010, it represents around 9% of the world’s population and its Internet users represent approximately 6% of all Internet users worldwide - this shows clear potential for active E-Commerce activities. Figure 1 (Below) shows the number of Internet users in each ASEAN country.

Figure 14: Internet user

65

Among the ASEAN countries; Indonesia, the Philippines and Viet Nam lead the way in terms of Internet users with approximately 30, 29, and 24 Million users respectively. The Table 2 (Below) ranks each country in terms of its number of Internet Users.

Figure 15: Number of country internet users

ASEAN Population & Intern et Penetration Internet penetration rates refer to the number of a country’s Internet users with reference to its

population. This measures a country’s success in getting its population to use the Internet. Table 3 (Below) shows the Internet Penetration Rates as a part of total population.

Figure 16: Population and Internet Penetration

66

Figure 17: Internet penetrations rates

In this regard, Brunei Darussalam (81%), Singapore (78%), and Malaysia (65%) can be considered to be the most successful in encouraging usage and providing its population with Internet access having the highest Internet Penetration Rates.

2.5.1.2 ASEAN Communication Master Plan As ASEAN moves towards the realization of the ASEAN Community in 2015, its Foreign Ministers launched the ASEAN Communication Master Plan (ACPM) on 11 November 2014 at the capital city of Myanmar, Nay Pyi Taw. This is the committee's response to the growing importance for ASEAN "to be able to speak to its internal and external stakeholders with clear messages, and with one voice, using traditional and non-traditional means of communication." The ACPM provides a framework in communicating the character, structure and overall vision of ASEAN and the ASEAN Community to key audiences within the region and globally.[208] The said plan seeks to demonstrate the relevance and benefits of the ASEAN through fact-based and compelling communications, recognizing that the ASEAN Community is unique and different from other country integration models. In his opening remarks during the launch, current Secretary-General of ASEAN, H.E. Le Luong Minh stressed the need for the peoples of ASEAN "to understand what it means to be part of an integrated region where there are shared, equitable opportunities for personal, business and community growth.

67

ACMP Development

The ACMP was developed by the Committee of Permanent Representatives, with support from the Government of Japan through the Japan-ASEAN Integration Fund (JAIF), According to its manual; the ACMP also envisions harnessing the growing sense of collective ASEAN mutual support and empowerment during times of natural disaster when member states have bonded to provide humanitarian assistance and disaster relief.

2.5.1.3 ASEAN ICT Master Plan 2015 The ASEAN ICT Master plan is ASEAN needs an integrated and strategic approach to achieve these outcomes. This ICT master plan will provide a clear plan of action for the next five years to ensure that we achieve our intended objectives. It encapsulates the articulation of a single shared vision driven by 6 strategic thrusts to deliver 4 key outcomes:

1. ICT as a engine of growth for ASEAN countries 2. Recognition for ASEAN as a global ICT hub 3. Enhanced quality of for peoples of ASEAN 4. Contribution towards ASEAN integration

ICT will be a key enabler for ASEAN’S social and economic integration. By developing next generation ICT infrastructure and skilled human capital, promoting content and innovative industries, as well as establishing an enabling policy and regulatory environment, ICT will help ASEAN to transform into a single market. In doing so, ASEAN will empower its communities and advance its status as an inclusive and vibrant ICT hub, making ASEAN an ideal region for economic activities.22 VISION ICT will be a key enabler in the ASEAN's and economic integration. Be developing next generation ICT infrastructure and skilled human capital, promoting content and innovative industries, as well as establishing an enabling policy and regulatory environment, ICT will help ASEAN to transform into a single market. Such is envisioned towards achieving the e-ASEAN initiative. E-ASEAN is a collective effort of Southeast nations to encourage and facilitate the growth of e-commerce, promote the utilization of ICT in social services and government operations, and to narrow the digital divide within the region. In doing so, ASEAN will empower its communities and advance its status as an inclusive and vibrant ICT hub, making ASEAN and ideal region for economic activitie

22

http://www.asean.org/resources/publications/asean-publications/item/asean-ict-masterplan-2015

68

Strategic Thrusts 1. Economic transformation 2. People empowerment and engagement 3. Innovation 4. Infrastructure development 5. Human capital development 6. Bridging the digital divide

2.5.1.4 ICT in Asian Short About ICT in ASIA

Asia is not only the largest region by land mass; it is also the largest by population being home to approximately 60% of the world’s population (UN Population Division, 2014). It extends from relatively small countries surrounding the Black and Caspian Seas in Central Asia, moving eastward to include the Indian subcontinent and still further spreading towards East Asia and the Pacific, including Indonesia and the Philippines. Given the absolute size, Asia – more than any other region – varies broadly in terms of history, culture, language and ethnicity. Especially noteworthy for integrating and sustaining ICT across several domains, including education, Asia also exhibits significant economic disparity. Given high levels of investment in their national networks, some OECD Member States in Asia have matched or outperformed international standards in the field of ICT-assisted instruction (OECD, 2011 ), while in other countries upgrades to national networks, teledensity improvements, enhanced national connectivity, and the introduction of new Internet Provider (IP) delivery technologies are creating more favorable environment for the uptake of ICT. Nevertheless, much progress remains to be made, and this is more true for some countries than others. In several least-developed countries (LDCs), Internet-based forms of teaching and learning and the essential infrastructure to support it are limited except for but a privileged few, driving countries to consider other forms of ICT. Beyond sub-regional differences, the internal digital divide of developing countries has also increased significantly as urban centers quickly adopt ICT while it remains out of reach for rural and remote regions. Bearing these caveats in mind, ICT in education in Asia can be viewed from two very different perspectives. The first reflects a development discourse that stresses the role of ICT in eliminating the digital divide by reaching the unreached and providing support to those who cannot access essential infrastructure, trained teachers and other quality educational resources. The second perspective adheres to an e-learning paradigm and is a response to the emerging knowledge society where ways of teaching and learning are evolving at a rapid pace to foster learner-

69

centric educational environments, which encourage collaboration, knowledge creation and knowledge sharing. While countries are admittedly at different stages of integrating ICT in education, ultimately both perspectives will be increasingly relevant for countries in Asia.

ICT Infrastructure in Developing Economies

Figure 19: The Networked Readiness

"Despite efforts over the past decade to develop information and communications technologies (ICT) infrastructure in developing economies, a new digital divide in terms of ICT impacts persists", according to the latest rankings of The Global Information Technology Report 2012: Living in a Hyper connected World, released recently by the World Economic Forum. The NRI report shows, "Sweden (1st) and Singapore (2nd) top the rankings in this year’s report in leveraging information and communications technologies to boost country competitiveness", said the WEF. For China, the press release commented, "...China at 51st – still face important challenges to more fully adopt and leverage ICT. An insufficient skills base and institutional weaknesses, especially in the business environment, present a number of shortcomings that stifle entrepreneurship and innovation". The Association of Southeast Asian Nations (ASEAN)'s ICT industry is growing fast, employing 11.7 million people and contributing US$32 billion, or 3%, to the bloc's gross domestic product, reporting the newspaper. To achieve the goal of promoting ASEAN as a global ICT hub under the ASEAN's master plan for ICT, ASEAN members need to collaborate more on trade and investment promotion, innovation and efforts to bridge the digital divide. The ASEAN Economic Community (AEC) in 2015 - the single market and trade investment cooperation is forcing ASEAN companies to accelerate the use of ICT. The development could be seen to.23

Reshape the business models of ICT services, with collaboration among Asian member countries playing a major part

Companies and public organizations Mobilizing ICT-skilled labor 23

http://www.business-in-asia.com/ict/asia_ICT.html

70

Enhancing connectivity among ASEAN countries Promoting data exchange via cloud-based systems

2.5.2. ICT Policy and Development in Cambodia

The Kingdom of Cambodia, with an area of 181,035 square kilometers is located in Southeast Asia, on the south-western part of the Indochina Peninsula. It is bordered by Thailand on the west and north-west, by Lao PDR on the north, and by Vietnam on the east and southeast. Cambodia is bounded by the Gulf of Thailand on the south-west with a coastline that is 435 kilometers long. After National Elections in 1993, the Information Communication and Technology (ICT) have improved gradually based on economic situation, electricity access and population size increase. The Gross Domestic Product (GDP) per capita at current price has increased from US$ 319 in 2001 to US$ 830 in 2010. The percentage of contribution by sectors in 2010 is i) Agriculture (33.9 %), ii) Industry (21.9%) and iii) Service (38.3%).The transportation and communication had contributed 4.5% among 38.3%. The population size has increased from 11.4 million in 1998 to 13.4 million (with 2.8 million households) in 2008. With improvement in electrification in the whole country, the phone (mobile and fixed phone) and internet usage are increasing rapidly. The density of phones in 2010 per 100 persons in Cambodia was 59.8 cell phones. Including the fixed phones the telephones per 100 persons is 62.2, compared to 2004 with 5.3 telephones per 100 persons. The internet subscribers increased six times compared to 2009. The optical fiber is installed in Cambodia to improve bandwidth and enable more internet subscribers.

1. The Status of ICT in Cambodia Cambodia’s MPs approved the National Strategic Development Plan (NSDP) for 2014-2018. This ambitious document is the country’s blueprint for economic policy, and since it contains a full section dedicated to ICTs, this is a good opportunity to take stock of the current state of this increasingly strategic sector.

2. Why has Cambodia made the development of ICTs a priority? Simply because ICTs can have a transformational impact and pave the way to Cambodia’s sustainable development. They can boost the economy both in the short and longer run. In 2009, the World Bank showed that using ICTs enable companies to increase their productivity but also that a 10 percent increase in the Internet penetration can contribute to 1.38 percent of GDP growth. On top of these economic benefits, ICTs can also improve the life of the most disadvantaged by granting them a better access to basic services.

71

3. How is the Cambodian ICT sector doing? There is a paradox. Traditional information and communication services are of poor quality. Public postal services are unreliable; mass media do not reach 15 percent of the Cambodians; and only 3.96 percent have a fixed phone line. When you look closer, though, the picture is different. It turns out that Cambodia has been closing its technological gap by moving straight to mobile and Internet. In 2008, 3.8 million people had a cell phone; in 2014, there are 20.2 million SIM cards in circulation, which is a 130 percent penetration rate (regional average rate reaching 89 percent).The Internet sector is also doing well. Six years ago, fewer than 10,000 Cambodians had a web connection, and it was extremely slow. Today 2.5 million people have Internet access at home, and an additional two million Cambodians go online daily using their smart phones.

4. To which extent have ICTs impacted the Cambodian society? It took only a few years, but ICTs have already transformed the Cambodian society. On the economic level, they have boosted entrepreneurship: 2011 census showed that the tech industry was among the fastest growing in Cambodia. Moreover, ICTs have had a positive impact on other economic sectors, such as agriculture. In central Cambodia, for instance, Oxfam has been implementing an ‚e-agriculture‛ program. By providing rural women with a mobile phone, they have given them a tool to plan when to harvest, integrate with the national market and eventually increase their revenues. On the social level, ICTs have proven they can be impactful as well, in particular by expanding the access to basic services. In 2014, for example, Women’s Media Center of Cambodia launched a radio show in order to promote maternal care in the countryside. To make sure they reach everyone, they decided to develop an Interactive Voice Response system. And it has worked: in only three months 4,500 people called to get information. However, the most striking impact has been political as ICTs have helped further strengthen the Cambodian democracy. During the 2013 elections, many voters would check Facebook and YouTube to get not-censored reports. Despite some irregularities, the opposition party obtained 44 percent of the votes. Eventually, Cambodia’s Prime Minister who has been incumbent since 1985 had to agree to share some of its power.24

24

http://discover.isif.asia/2014/08/the-status-of-ict-in-cambodia/

72

2.5.2.1 Cambodia Comparisons ICT Infrastructure

Comparison-Infrastructure in Asian Countries Infrastructure (airports, seaports, roads, bridges, etc.) are all important to a country in terms of attracting investment and business and to a company when it is time to decide where to locate an investment, build a factory, establish a regional office, etc. How easy a country is to travel to and the modernity and efficiency of its air and seaports is always something a company and its executives need to consider. Asia is growing fast and infrastructure in terms of air and seaports is constantly changing. Below are insights on logistical key installations throughout the region.

Table 27: ICT Infrastructure Comparison

Ranking on

Telephone lines

Ranking on

Internet users

Ranking on

Extent of business internet use

Cambodia 123 120 94

China 52 75 75

Hong Kong 15 18 24

India 98 94 31

Indonesia 95 97 48

Japan 22 19 13

Korea 14 4 1

Malaysia 63 32 27

Philippines 97 83 51

Singapore 29 12 21

Thailand 80 61 28

Vietnam 74 76 111

Resource: World Economic Forum’s Global Competitiveness Ranking Report 2006-20

73

2.5.2.2. ICT Policy in Cambodia A. Education Policies ICT in Cambodia I. Information and Communication Technology in Cambodia Cambodia’s information and communication technology (ICT) for education policy document was developed in keeping with its ‚Education for All‛ vision of ensuring all citizens equal access to basic quality education, and to prepare them to participate actively in Cambodia’s reconstruction and integration into the knowledge-based global community. The policy was developed in consultation with national and international partners and places emphasis on the role of ICT in distance education, the training of professionals, non-formal education, and the quality of education at the upper-secondary and post-secondary levels, in recognition of the importance of ICT skills in a knowledge-based society.

1. The ICT in education policy focuses on four areas: The provision of ICT access for all students and teachers, and using ICT to reduce the digital

divide between Cambodian schools and those in neighboring countries; The function and role of ICT as learning and teaching tool in education, and as an independent

subject; The promotion of education for all, regardless of personal characteristics or location, through the

integration of ICT with other communication mediums; and The use of ICT to raise the efficiency, productivity and effectiveness of education management. 2. The goals of Cambodia’s ICT in education policy are: To increase access of all citizens to both formal and nonformal basic education, using ICT as a

primary learning and teaching tool. To improve the quality of basic education and support lifelong and independent learning; and To ensure Cambodia’s ability to complete in an interconnected world, by ensuring a workforce

skilled in ICT is available for employment in a knowledge-based society.

3. ICT Developments in Teacher Training Since 2003, students in teacher colleges have been required to attend ICT courses 2 hours per

week. Computer availability in teacher colleges increased significantly during 2003, and all colleges now have a computer lab. More than 300 of the 600 teacher trainers had undergone training in basic ICT skills by September 2004.

74

4. ICT in Higher Education The majority of higher education establishments is located in urban areas and possesses internet

connectivity and good ICT facilities. ICT-related courses are among the most popular subjects. 5. Non-Formal Education and Distance Learning

Non-governmental organizations (NGOs) have been primarily responsible for developing the ICT infrastructure and Khmer content necessary for non-formal education and distance learning. Many rural Cambodians receive the majority of their information through television and radio, which have not been fully leveraged for educational purposes.

6. ICT Readiness in Schools Seventy-five percent of secondary schools in Cambodia have no power supply. Of state schools, six percent of lower-secondary and 35 percent of upper-secondary schools have one or two computers, while eight schools have greater than 10 computers. Many private schools offer computer classes. II. Strategy for Promoting the Use of ICT in Education The medium-term objectives from 2004 to 2010 include: to develop an ICT infrastructure and provide hardware for all levels of educational institutes and centers for the purposes of education and training; to priorities human resource development to meet the requirements of the ICT and education sectors; to use ICT as a teaching and learning tool to promote skills in research, communication, problem solving and innovative thinking; and to raise administrative efficiency through the use of ICT for educational management.

1. Human Resource Development The medium-term strategies for human resource development include: the establishment of courses for ICT professionals in higher education; the training of all teacher trainers in ICT use for professional development and administration; updating the primary and secondary school teacher-training curriculum to include ICT use for professional development, administration, teaching and learning; promotion of ICT-based research and independent/lifelong learning activities in all educational institutions; and training a minimum of one staff member from each educational institution in computer repair and maintenance. 1. Use of ICT in Schools

Medium-term strategies include the promotion of ICT use to enhance teaching and learning in foreign languages, science, math, and social science; the modification of secondary school curriculum to incorporate ICT use in above subjects where possible; the provision of ICT as a life skills course; and the ethical use of ICT in schools.

75

2. Knowledge Management System Medium-term strategies include establishing a National Clearing House online for the dissemination of Khmer and foreign language teaching and learning resources; and providing links to a variety of educational resources in Cambodia and worldwide. III.Education

1. ICT Applications for Open Schools and Distance Education Access to primary and secondary education will be expanded through the promotion of ICT-enabled Open Schools. The current five year education plan will create open schools, distance education, and equivalency education in order to provide education in areas where conventional schooling is not available; learner-choice in how they want to learn; an opportunity for school drop-outs to precede with their education; and the opportunity to combine education with work and learning.

2. ICT Use in Universities ICT should be used to leverage the scarce human resource capacity of universities, and also connect learners to virtual learning resources around the world. A cyber campus consortium will be created to promote ICT use in teaching, learning, research, and administration; digitize Khmer language books and translate others into Khmer; and link to virtual universities elsewhere.

3. Cooperation and Partnership Medium-term strategies include the promotion of cooperation between NGOs, national and international organizations, and individuals in order to build on opportunities for ICT development in education; and the building of partnerships with civil society and private organizations for the purpose of sharing ICT resources.25 B. Development of ICT Programmed in Cambodia Since 2000, Royal Government of Cambodia (RGC) has been issuing policies to adopt and promote the ICT use in governmental organizations as well as in other sectors. Cambodia could gain the most benefits from those ICT policies to boost the economy and bridge the digital gap. The policies are aiming to build Cambodia to become information-base and knowledge base society.

1. In order to monitoring the massive of developments, RGC has been adopted ICT as a tool to provide, gain knowledge from all information and established e-Government services such as Residential Registration System, Vehicle Registration System, Real Estate Registration System, e-Health/Mobile Health Care services, and also providing e-Visa service (http://www.mfaic.gov.kh/e-visa/vindex.aspx) to

25

http://www.web-cambodia.com/en/node/36083

76

ease international visitors/tourisms for applying visa to enter Cambodia. These are the basic data that government need which could lead to provide efficiency and enhance the quality of e-Services. Also we had developed automate custom clearance system for sea port, which help the speed of shipping of products to international market and importing products faster and easier.

2. Increase competitiveness of national ICT industry, improving quality of life of people and boost opportunities for Cambodian people to get the better services.

3. Encourage development of national ICT industry by promoting widespread adoption of ICT applications, especially promoting the development of ICT applications in local language (Khmer Language).

4. Reduce the gap of living standard, improvement of information accessibility and constructing basic ICT infrastructure on nationwide level through National Information Infrastructure (NII), National Backbone, and the cooperation with telecommunication sector to run Optical Fiber cable and wireless/satellite technology over the country.

5. Reduce public administration time, costs and improve quality of public services through development of ICT.

6. Promoting e-banking/internet banking which is the basic for e-Commerce and e-Business transactions by starting from full function of ATM and internet banking services

7. Citizen could gain more knowledge from data/information which provides by government as well as other sources, which could help them in the competitive of Free Market.

8. Tax could be increase since the availability data of transactions/incomes and other through e-banking system.

9. ICT training policies has been provided for Human Capacity Building for both government officials and society in general by established Training Centre as well as provided policy to enable private sector and development partners to build Community Information Centre (CIC) and Public Information Centre (PIC) where citizen could access free of charge. Also promoting private ICT training centers to train students and other to get deep in their skills

10. WID (Women in Development) in ICT sector, promoting women to join the development of ICT by providing priority to women to get ICT related scholarship in universities as well as in other training centre.

77

There are two authorities who are responsible for developing ICT and Telecommunication policies: 11. In August 2000, NiDA has been established and responsible for researching, proposing,

formulating, promoting, implementing, monitoring and evaluating all of National ICT policies, e-Government, and Information Security Initiative in Cambodia. (www.nida.gov.kh)

12. Ministry of Post and Telecommunication (MPTC) is responsible for researching, proposing, formulating, promoting, implementing, monitoring and evaluating of Telecommunication sector and Network Backbone in Cambodia. (www.mptc.gov.kh)To achieve those missions, resources are planned and milestones to be reached:

13. for national ICT policies: http://nida.gov.kh/index.php?language=en 14. for telecommunication policies: http://www.mptc.gov.kh/ 15. for ICT policy in education: http://www.moeys.gov.kh/en/education/ict/index.htm 16. for Banking: http://www.nbc.org.kh/index.asp

The international/ global dimensions of these policies are: the first goal is to connect to the world through high-speed network that would make this world becomes closer in term of communication and space. Second, with ICT applications and high-speed network, governments could share each other the most important data/information that could protect and fight against terrorisms to keep this world with peace. Since the connection of high-speed network between Europe and Asia has been connected (TEIN3), data/information has been sharing among academic research area that would boost the growth of ICT and find the new trend of ICT in the future. Table 28: ICT Main Programmers in Cambodia Services S&T e-ASEAN (ICT) Economic

Development 1.E-Banking 2. E-Government 3.Mobile-Health Care and E-Health 4. E-Library 5.Information Sharing

6.Unicode of Khmer Font 7.Smart Card 8.Information Security 9.Open Source Development in Khmer Language 10. Green IT

11. ICT in Education 12. ICT training 13. E-Learning 14. E-Learning Platform 15. Video Conference

16.Promote the use of ICT in SMEs 17.Promoting e-Commerce 18.Public Private Partnership programmed on ICT development 19. Promote the using local language (Khmer) in ICT applications

78

Objectives of these programmers are to reduce time, cost of transaction, space, to make user friendly, and increase/resize business market which will sustain the economic development and reduce the gab of living standard in the region as well as the world at large. The main stakeholders setting and implementing: from government side NiDA, MPTC, MoEYS, NBC, ect., from private sector are Intel Cop, Telecom firms, Angkor net, Commercial banks, VietTel, etc., and from non-profit organization are ADB, UNDP, World Bank, ect. With PPP (public private partnership) policy, they have been working closely to contribute most of their efforts to those programmers to make sure that they would be smoothly implemented and successful. Resources are planned for these programmers are NiDA, MPTC, NBC, MEF, MoEYS, and other. The Success Criteria are to sustain the economic development, socio-cultural development, share experiences and gain knowledge amongst ASEAN countries and partners, especially on R&D of S&T and supporting policies. International dimensions of these programmers are to expand market from local to International by starting e-Commerce and e-Business as well as to reach the international ICT level and the world of closer. With these programmers, the level of economic and S&T in Cambodia could be sooner caught up with other. Beside those programmers, Cyber, e-Signature and e-Commerce law are under processing of research and draft. At the same time, telecommunication law is on the process of final drafting and will pass to National Assembly soon.

2.5.2.3. ICT Development in Cambodia

Cambodia is the one country trying to rapidly adopt new technology. Until now, Cambodia is more improved for ICT and for reaching it to provinces according to population increase and economic growth in the serial years. However, some problems are still faced like want of required electricity, limited internet access, low knowledge of ICT and high price for internet and mobile services charge. In addition, some cell companies became bankrupt which affected the users of that system.

1. Strategy for ICT Development

The main strategy for ICT development should focus on ICT Framework, ICT Service, ICT infrastructure, ICT Development and commitment to global issues.

ICT Framework:

- Develop a national ICT legal and regulatory framework to ensure national economic and social stimuli.

79

- Develop measures to achieve the e-ASEAN Framework Agreement, as well as to ensure efforts to keep pace with the ASEAN level of ICT technology through the promotion of a national ICT innovation.

ICT Service:

- Improve government services through the application of ICT

- Support the use of ICT in the private sector and the growth of e-commerce

- Encourage the growth of a national ICT industry and its links among the ASEAN region.

ICT Infrastructure

- Develop a reliable national ICT infrastructure

ICT Development

- Enhance the level of ICT literacy among the population

- Develop regionally competitive ICT experts and ICT savvy human resources

- Support WID (Women in Development) in the ICT Sector

Commitment to Global Issues

- Encourage an awareness of ICT as a tool for fighting global warming

2. Cambodia ICT Development Strategy 2011-2015

Law

- Telecom Law and Related law on Telecom / IT

- Competition and Quality of Service

- Cyber Law

Strengthen the Regulation and Policy

- Policy and technical standardization following ITU recommendation and other world organizations.

- Encourage the fair competition in according to local and world market.

80

Readjusting on license issuing

- Standardization on service policies

- Other condition on services

- Revenue sharing with government

Following the 2015 ASEAN ICT Master Plan responding to the large number of users

Key Action Items for Immediate Term 2010-2015

1. Harmonize ICT Regulations

2. Sharing of Best PPP Models

3. Study to Lower Intra-ASEAN Data Roaming Charges

4. Promote Secure Transactions within ASEAN

5. Reward ICT Innovators

6. Ensure Every Child has Broadband Access

7. Cambodia CIO Forum

8. Establish Cambodia Broadband Corridor

9. Establish and Domestic Internet Exchange Network

10. Develop a Framework for Network Security

11. Develop ICT Skills Certification & Skill Upgrading26

26

http://pikom.org.my/cms/CAMBODIA/ICT_Outlook_2011-2015_in_Cambodia.pdf

81

2.6. The Benefits of Using Telecommunication in Businesses Today if we talk about communication is a tools for connect to social network also very important toll for

business and it opportunity companies to communicate to effectively to customer service. More than is can make a relationship with other people to communicate as a key element in teamwork within officer or workplace in organization later. General know that mobile telecommunication gives companies the opportunity to introduce more flexible working by allowing employee to work efficiently from home or difference place of worker, so very necessary for today to using

telecommunication in businesses with gives companies opportunity and benefit for do businessman today. 1. Customer Service The telephone remains an important element of a customer service strategy. By using call management techniques, you can handle incoming calls quickly, even when lines are busy, and you can route calls to employees with the right skills to deal with the inquiry. Alternatively, you can offer callers the ability to choose from a range of options, such as "Press '1' for Accounts," or Press '2' for Sales." You can also use the telephone to contact customers proactively, following a service call, for example, or after a purchase. 2. Collaboration Collaboration between different departments can help your company improve performance in projects such as new product development, customer relationship management and quality initiatives. According to consultancy McKinsey & Company, collaborative, complex problem solving is the essence of the work of many employees. Telecommunication helps your project teams maintain momentum and make important decisions, even when all members cannot attend meetings. Absent members can join a teleconference or a Web conference if they have a Smartphone or computer with Internet connectivity. 3. Remote

82

If your employees in sales, technical and service teams spend a large portion of their working days with colleagues, visiting customers, working at home or traveling, mobile telecommunication can help them maintain essential contact and work productively on the move. The Yankee Group Enterprise Mobility Survey found that 40 percent of respondents regarded more than a third of employees as remote or mobile workers. 4. Smartphone’s The increasing sophistication of smart phones makes mobile telecommunication an integral part of a wider communication capability. Employees can use the same telecommunication device to access data, send and receive emails, work on documents or participate in multimedia conferences. According to the Cisco Visual Networking Index Study, data-intensive applications are the main component of the growth in communication network traffic.

2.6.1 The Advantages of Using Telecommunication Systems in E-Business E-business, or electronic business, refers to the organizational system in an enterprise that applies

computer-controlled technologies in its operational system in order to facilitate a more efficient execution of business activities. E-business requires an enterprise to invest in the application of information technology and IT professionals and the use of the Internet in its operations. There are notable advantages for businesses that select to apply telecommunications in their operations. 1. Reduced Operational Costs Application of telecommunication systems in e-

business provides the business with the opportunity to reduce its operational costs. For example, the use of automated machines reduces the costs set aside for wages and salaries because there is a reduced need for physical labor. Additionally, the use of the Internet for communication, such as email, saves the business from incurring phone, paper and postal charges. When the business engages in the use of video conferencing as a substitute for conducting personal meetings, it saves money and time spent on travel. 2. Marketing Strategy In e-business, the organization can apply the use of a website to market their goods or services to a wider Internet market. As the online community expands, businesses have a wider audience to market their

83

company and acquire new clients. A website allows customers to have uninterrupted access to your business details and carry out transactions. The business benefits in turn from increased sales and reduced advertising costs as compared to the use of traditional advertising avenues. 3. Access to a Wider Market Using telecommunication systems in e-business gives a business the opportunity to access a wider client market. The business can tailor the marketing process to suit a variety of clients who visit the website. In addition, the enterprise can design its marketing strategy to center on a certain locality in order to establish a strong local market. Telecommunication systems also allow the business to expand its services to the national or global market, which in turn may lead to an increase in sales and profits. 4. Efficient Customer Service The application of telecommunications systems allows the business to improve its customer service. For instance, the use of the Internet in making orders and carrying out transactions provides a fast and reliable system of transmitting goods and services to a wider market. Online payment systems improve the process of cash transactions and reduce the costs incurred -- for example, reduction in interest charges and bank fee

2.6.2 Using Telecommunication & Networking in Business Telecommunication simply involves sharing information over a distance, which has made globalization in business possible. Networking means forging connections with other business people and clients in order to maximize your opportunities for growth. Every small business should take advantage of emerging networking opportunities that use telecommunication to share its message with a broader audience. 1. Modes Telecommunication involves communication via email, which you probably already do frequently. It also involves sharing information via social-networking sites, websites and a blog. Software-sharing programs and web-conferencing programs allow for an instant exchange of ideas. Online chats are another example, and so are phone calls, including those between two parties or more than two individuals. 2. Strategies Determine how telecommunication will most benefit your business, rather than haphazardly testing different strategies. For example, if you believe your products would succeed in another country, use web conferencing to build a strategic alliance with a company based in that country. If you wish to save on overhead costs and don't need your employees to work on-site, use software that lets them collaborate on projects from a distance. Consider using phone conferencing to discuss ideas as a team in real time. Also

84

consider hiring a virtual assistant to book appointments from a remote location if you don't have a full-time assistant. 3. Advice Use telecommunications to improve communication when in-person communication is difficult or impossible. Don't use it to eliminate all interpersonal interaction in the name of efficiency. If your employees work from home, have them meet in the office once a week to maintain a sense of team spirit. Many managers have used this strategy with great success. If you're web-conferencing with someone who works half an hour away, an occasional lunch may benefit your relationship. Additionally, if you're presenting in a web conference, remember that it can seem more difficult than an in-person presentation. Not seeing your audience can be daunting, and you probably won't have any breaks for questions until the end, so practice giving your speech to a computer screen beforehand. 4. Response Employees will probably respond positively to technologies that allow them to work from home or increase their productivity. In fact, they tend to become more productive when working remotely. Evaluate your changing communication systems to ensure they function at their best. Spending money on fancy new technology does not in itself ensure strong communication. Have your information-technology staff explain how to use communication tools to all staff members, and when web conferencing, have a knowledgeable IT staff member on hand. Introduce new technologies gradually, too, so you don't overwhelm your employees or yourself.

2.6.3. Telecommunication Plans for Businesses A telecommunication plan can help your company improve efficiency, productivity and customer service by giving your employees the right communication tools. You can also extend those benefits to employees away from the office by including support for mobile staff and remote workers in your telecommunication plans. Your telecommunication plan should take account of billing plans so that you acquire a cost-effective solution that delivers strong business benefits. 1. Office Identify the number of office-based employees who use the phone for internal and external communication. If your company makes a large proportion of internal calls or calls to other offices or branches of your company, consider a solution that routes those calls over a private network to minimize external call costs. If you make a large number of national or international calls, choose a call plan that offers the best rates on external calls.

85

2. Unified Communication Improve productivity and efficiency by planning a unified communication strategy in your telecommunication plan. In unified communication, all forms of communication are carried on the same network. Employees can access messages from phone, email, text, instant messaging or voicemail through a single channel, rather than searching multiple sources. 3. Remote Increase the flexibility of your company by extending your telecommunication plan to remote workers based at home or in other offices. Remote employee’s access your company telecommunication network via secure connections so that they can enjoy the same communication facilities as office workers. 4. Mobile Your telecommunication plan should also cover the employees who regularly work away from the office, such as sales representatives, service engineers or managers visiting other sites. It is essential that they can keep in touch with the office and exchange information with colleagues. The latest Smartphone’s incorporate facilities for transmitting data and accessing email and the Internet, as well as making calls. 5. Customer Service The right telecommunication plan can help you improve the quality of customer service. If the number of incoming sales or service inquiries is too much for individual employees to handle efficiently, consider setting up a call center. Customer service specialist’s work together to handle the incoming workload Call center telecommunication solutions enable employees to place customers in queues, transfer customers to the right specialists or automate certain call handling facilities. 6. Collaboration By integrating your telecommunication plan with your wider information technology strategy, you can support effective collaboration in your business. Project teams working on new products or other developments can use voice conferencing or video conferencing to collaborate over the same network.

2.6.4 Telecommunication Methods in Business Communication With the expansion of technological advances in communication, businesses no longer have to rely solely on local employees or liaisons to conduct business. Telecommuting allows employees to fulfill job responsibilities at a site other than their primary business location, often at home or at a coffee shop. Telecommunication also allows businesses to reach clients without having to meet them face-to-face 1. Email Email has become a staple of business communication because of its ease of access and reach. Plus, it's often the most efficient way of sending information to large groups at once. Email allows businesses to

86

send proposals and products to clients and employees without incurring the cost of postage and paper. Moreover, email can be forwarded to multiple individuals efficiently and at no cost. Email is also an ideal platform for business communication as it unlimited and not restrained by time zones like telephone communication. 2. Video Conferencing Video conferencing provides the same benefits as face-to-face communication and can be accomplished with an online service provider, such as Go to Meeting, through software, like visit and WebEx, or through televised cable or satellite mediums. Video conferencing allows businesses, clients, and employees to attend meetings without having to physically travel to a location, saving untold amounts of time and money. Video conferencing not only allows parties to see each other, but has the added benefit of allowing for the sharing of visual aids, such as charts and graphs. However, video conferencing has one major disadvantage; a lagging in signal carry time can cause feeds to stall, break up or freeze. 3. Voice Conferencing Like video conferencing, voice conferencing saves time and money because there are no travel expenses involved. The drawback to voice conferencing is that graphs or charts cannot be shared through it, but it does have the advantage of being able to be used by a larger group of attendees; video conferencing is usually restricted to a few individuals. Voice conferencing also has the distinct advantage of allowing hosts to conference in additional parties and does not have a lag time like video conferencing. 4. Fax Faxing provides businesses with the ability to pass hard copies of documents to an employee or client without the need to wait for delivery or incurring of mailing expenses. Faxing also gives users the capability to send multiple hard copies of a document to multiple recipients. Fax services often provide hard copy receipt confirmations upon delivery of the document to the recipient(s)

2.6.5 Marketing Techniques in Telecommunication Telecommunication companies market their products and services to consumers, business customers and other service providers. Marketing techniques vary for each sector. The aim of telecommunication marketing is to generate the highest level of revenue from your network and strengthen customer loyalty. In consumer markets, focus on selling bundles of products to customers, while in business sectors, and aim to build strong relationships as a channel for marketing additional services.

87

1. Consumer In consumer markets, you can utilize broadband access to offer what is known as the triple play – telephone, video and Internet. This enables you to increase revenue and customer loyalty and protects your customer base against competitive activity from low-cost telephone service providers and indirect competitors such as cable network companies. 2. Business Market your services to business customers using consultative selling techniques. Work with your customers to discuss their communication needs and provide advice on the services that meet those needs. The rapid changes in communication technology make it important to educate your customers on the relevance and benefits of new technologies. Discussion papers, seminars and other events form an important part of your marketing program. 3. Carriers Wholesale marketing is an important part of your program. You can offer service providers, such as other telecommunication companies, online video publishers and content providers, access to your networks to carry their traffic. These are called carrier services; they increase revenue for your business and enable other providers to extend their networks without building additional infrastructure. To market carrier services, communicate the benefits of a network with the reach, performance and capacity to meet customers’ needs. 4. Product Development To increase revenue and return on investment in your network, you must develop new products and services. The latest multi-service networks as of 2011, based on Internet Protocol (IP) technology, enable you to offer a much wider range of services on the same network than traditional dedicated voice networks. You can use the capability of IP networks to build video, data, Internet and voice services over the same infrastructure. To accelerate service development, work with network companies who provide advice on market opportunities as well as technical advice and support. 5. Mobile The increasing importance of mobile telecommunication threatens the voice revenue that was the mainstay of traditional telecommunication providers. Thus, it's important to develop your own mobile offering or work in partnership with other mobile operators to offer joint services.