Russian telecommunication operators’ landing in Cambodia

The Russian Telecommunication companies have broken through in their international expansion, having entered the Southeast Asia market. The Altimo Holding has bought Sotelco, the Cambodian mobile and wireless operator. The given operator has no network of its own, so Altimo is likely to resell it in the near future.

The Altimo Telecommunications Holding announced buying a 90% stake in Sotelco, providing WiMax wireless services in Cambodia and having a license for GSM 900/1800. That is the first transaction on purchasing the Southeast Asia assets by a Russian telecommunications company. Besides Cambodia, Altimo is going to make some purchases in Vietnam and Indonesia. Dmitri Vosianov, handling Altimo stake in MegaFon, is to supervise the given line.

Altimo indicates neither the transaction charge, nor the seller’s name, nor the bought operator performance index. When preparing the given publication, it was impossible to get any of the company’s representative for comments. The operator is likely to have been granted the cellular license not long ago, so it has not even started providing the services. At present there are three GSM-operators in the Cambodian market. They are CamGSM (operating in the 900 MHz range under the Mobitel brand, owned by the Millicom International Cellular international corporation), Cambodia Shinawatra (Camshin, 1800 MHz) and Telekom Malaysia International Cambodia (900 MHz, Hello GSM trading mark). Cambodia Advance Communications (Cadcomms) and Applifone also own the unrealized license for the 1800 MHz range.

Thus, Sotelco is the only mobile operator possessing frequencies in both GSM ranges. But Sotelco has no license for the 3G communication. At the same time, CamGSM and Cadcomms have license for 3G compatible with GSM UMTS, while CDMA-200 is owned by Azcom (800 MHz range) and Camshin (450 MHz).

Cambodia population is 14 mln., the absolute market leader being CamGSM with 1.3 mln. subscribers. “The mobile communication penetration in Cambodia is a little bit more than 10%, - Mr. Vosianov notes. – However, the country is rich in natural resources, including offshore oil, its economy growth exceeding 7% a year. We believe Cambodia cellular market growth potential is high”.

However, holding controlling interest is not characteristic of financial investors, such as Altimo. Of all it assets the Holding holds control only over Metrosvyaz CDMA-operator, a small Russian operator. According to a person, familiar with the situation, Altimo is to resell Sotelco, VimpelCom is likely to be the buyer. Altimo owns 44% of voting shares in the mentioned operator and has been reselling its mobile assets in Russia and CIS to VimpelCom so far.

Although the mentioned transaction was the first telecommunication assets acquisition in the Southeast Asia for the Russian investors, the CIS companies has already got assets in the mentioned market. According to CNews, a group of Kazakh investors launched Spice Nepal Private cellular network in Nepal in 2005, which is the second mobile operator in the republic after the public Nepal Telecommunications Corporation. The Kazakh partners in the given projects are the local governmental authorities businessmen. It is interesting the same investment group together with Altimo owns BiTel and SkyMobile, the Kirghiz mobile operators.