PHNOM PENH – In a sector where speed is crucial, telecom operator Smart Axiata’s delivery of the first nationwide network of blindingly-fast 4G LTE has left its competitors scrambling to roll out their own high-speed networks.
Smart, the nation’s second-largest telecom company, announced this month that it had extended its 4G LTE coverage to all 25 provinces. The company claims its high-speed broadband Internet service is now accessible in the capital and dozens of provincial towns, while its rivals are still months away from launching their own service.
“We were the first to launch 4G LTE in Cambodia in early 2014, and we were the first to make 4G LTE available in all 25 provinces,” Smart CEO Thomas Hundt told Khmer Times. “Smart has a significant lead in this play and we will further innovate and invest heavily to maintain this leadership [position.]”
4G LTE, or fourth-generation Long Term Evolution, is the fastest mobile broadband Internet standard in Cambodia, designed to handle massive volumes of data at speeds that put its 3G predecessor to shame. Better connectivity results in faster download speeds and smoother play when streaming video services such as YouTube and Netflix.
By comparison, a person could download a 50-megabyte high-quality music video to their phone in 15-20 seconds on Smart’s 4G LTE network, while the same file would take over three minutes to download on 3G. At average speeds, a high-quality feature-length film of about 1.5 gigabytes can be downloaded in under seven minutes – about a tenth of the time it would take on 3G.
Mr. Hundt said some telecoms are deceptively marketing mobile broadband technologies such as Wimax and McWill as 4G, though they are not compliant with internationally recognized standards.“We’ve seen in Cambodia some companies advertising 4G, but the underlying technologies are by far not comparable and competitive to LTE,” he said. “Only LTE is 4G.”Over 100,000 of Smart’s 7.5 million subscribers are already using 4G LTE, while the company is investing heavily in expanding its network in anticipation of a surge in consumer demand. It is a low-risk gamble, say experts, given the stakes.Internet use in Cambodia grew a staggering 414 percent since January 2014, according to a report released in March by We Are Social. The Singapore-based consultancy attributed the growth to the increasing use of mobile devices such as tablets and smartphones, and the growing number of active social media users, which doubled last year to 2.4 million.Evolving Telco Customer BaseAnthony Galliano, CEO of social media marketing firm Dynamo Digital, said the increasing affordability of 4G-capable mobile devices and broadening demographic demand for high-speed Internet is driving the push for 4G deployment.“The customer base of telcos is evolving,” he said. “The previous generations of telco customers were concentrated in the 20-year-old band. That has dramatically changed as the demand for internet services has increased [in every age bracket,] from toddlers to seniors.” How people access and use the Internet is also changing, according to Mr. Galliano, as mobile devices replace television and print media as the primary sources of information and entertainment.“There has been a paradigm shift in how consumers interact and use their mobile devices,” he said. “While the phone remains a communication device for basic voice and text, it is now used as the primary gateway to the Internet and in this respect for news, entertainment, and video and text communication. The laptop survives primarily as a workplace tool, while the mobile phone and tablets rule as the primary consumer interface to the Internet, thus the persistent and increasing demands from consumers for high-speed internet from their telco provider.”Falling entry-level smartphone prices are increasing the number of mobile broadband users. Budget 3G-enabled handsets are already available for $50, while Chinese-manufactured 4G-capable smartphones are expected to soon drop below the $100 threshold – putting them in the hands of the Cambodian mass market. While Smart blazes ahead with its infrastructure already in place, rival telcos are scrambling to roll out their own 4G networks – and woo subscribers. South East Asia Telecom (Seatel), a new entrant to the Cambodian market, announced this week that it would provide 4G-capable mobile phones to former Excell customers ahead of the Excell network’s scheduled end of service on June 27.The Singapore-based telecom company is currently building its own 4G VoLTE network – a spin on 4G LTE that allows voice traffic without interrupting data flow – and expects to launch its service in the next few months. The company is set to invest $500 million over the next two or three years on what it describes as the “most advanced 4G network in Cambodia” in an attempt to carve out its own niche.Metfone, a subsidiary of Vietnamese military-owned telco Viettel, is also building a 4G network in Cambodia and has the weight to be a formidable competitor. The company declined requests for an interview.First-Mover AdvantageMr. Galliano said voice and text have become commodity products as consumers increasingly using their mobile devices for uploading content to social media, online gaming, and streaming music and video. The companies that offer the fastest mobile internet networks will gain market share from those that do not.“Smart has gained an enormous competitive advantage as a first-mover,” he said. “While Metfone and Seatel plan to play catch-up, the window of opportunity is closing fast. A consumer may have a second SIM, however the dominant one – and the one that generates the most revenue – will be the [operator] that meets the demand for high-speed internet access.”Mobile operators slow to deploy the latest technologies risk obsolescence, Mr. Galliano warned, pointing to the fate of telcos like Beeline that exited the market having failed to upgrade their infrastructure.“We have already seen what has happened to telcos that could not keep up,” he said. “There have been casualties for those that could not offer 3G, and I expect the same for later-comers in 4G.”