Essar looks to Cambodia

The Essar Group, which owns 33% of Indian cellco Hutchison Essar, is planning to launch telecom services abroad, reports the India Times. According to the paper’s sources the Essar Group’s maiden foray will be in Cambodia, where it is set to launch GSM-based mobile services soon, having reportedly finalised a joint venture (JV) with a local company.

A company spokesman said, ‘Some issues still have to be sorted out, like the allocation of spectrum. After settling these issues, the JV will apply for a licence with the Cambodian Ministry of Post and Telecommunications.’ The Essar JV is hoping to join an increasingly crowded market in Cambodia, competing with the three operational cellcos Casacom, Camshin and Mobitel, as well as South Korean-backed SLD Telecom and Vietnamese firm Viettel, who are planning to join the fray with the launch of commercial services in the near future.

Cambodia is seen as an lucrative emerging market on account of its poor telecom penetration. Its mobile market has been growing at an annual rate of 35% over the last two years, but there are only about 1.5 million subscribers, translating to a penetration of less than 10%. Additionally Cambodia has only 42,000 fixed line users and an even lower number of internet users. Telecom services are expensive in comparison to other countries in the region.