Digital Highways

Mobile telecommunications firms are rapidly changing the way that Cambodians live, work and do business. With more than eight million users, Smart Axiata is leading the field for subscriptions and for innovation. CEO Thomas Hundt speaks with Management Insider about the evolution of Cambodia’s digital infrastructure.

How would you describe the current state of digital infrastructure in Cambodia?

I think Cambodia has a pretty well-established digital infrastructure, far better than the traditional brick- and-mortar infrastructure. We are, in comparison to neighbouring countries, well-equipped with digital infrastructure, namely access to cheap, affordable Internet wherever you go. However, it is pretty much mobile. Literally 99% is based on mobile infrastructure, not on fixed infrastructure. But that is not necessarily a disadvantage these days, because 4G is competitive in comparison to fibre or other fixed-line technologies to connect households. The beauty in it is wherever you go in Cambodia you will find access to the Internet at affordable costs for everyone.

There’s now a perfect base for further digitisation of the country, with digital services going beyond just accessing the Internet.

How has this changed over the past five years?

Tremendously. As a result of a couple of factors, we have gone far. On the one side, it is a very liberal telecoms market, and on the other hand it is a very competitive market. Investments have been coming in and they have been focusing on bringing the latest technologies to Cambodia to different shades among the competitors. There’s now a perfect base for further digitisation of the country, with digital services going beyond just accessing the Internet. It’s a good basis now for e-commerce, for e-learning, and potentially for e-health. We’re ready now for IET [Innovative Environmental Technologies] in the next one or two years, cars getting connected, and smart cities being deployed.

What areas need to be improved to better suit the requirements of those doing business in the country?

There are areas where work needs to be done, and multiple stakeholders are required to tackle these shortfalls. We see a lack of highly-skilled IT and engineering people, so there’s quite a significant HR gap. Universities are not outputting enough people in that space.

The second area where we see work to be done is on governance. Quite a few areas are, at the moment, entirely ungoverned. Work is in progress, but still not completed, such as on e-commerce law. Also, in the telecoms space there are a lot of regulations to be done still. Cambodia finally got a telecom law at the end of 2015, after years of having no regulations at all. But the telecom law required a lot of further regulations to be crafted subsequently.
We also see the need of the government to allocate additional spectrum to the industry. Mobile lives from frequencies from spectrum; the more spectrum that is available, the higher-capacity networks we can build and higher speeds we can deliver to consumers.

There are a couple of other areas, such as a general acknowledgement by the government that telecoms services are public infrastructure and businesses which are doing greater good for the country, that would have impact on reliability of electricity supply. At the moment we are being treated like any other company, not like a public infrastructure provider.

It’s a very bold masterplan. If the government is able to execute just half of that masterplan, together with the industry, I think it would have made enormous progress.

How is Cambodia’s digital infrastructure likely to evolve in the medium- and long-term?

The government has, together with some involvement of the private sector, created an ICT Masterplan 2020, which is covering literally all aspects of digitising the country, such as the pure infrastructure perspective, which means the rollout of networks, and connectivity, and goals for what percentage of people should be connected to the internet by 2020, and so on. It’s a very bold masterplan. If the government is able to execute just half of that masterplan, together with the industry, I think it would have made enormous progress. There’s still a bit of doubt that we’re getting enough traction on it. I believe that the Cambodian consumers have now reached a stage where they’re demanding top-notch service. Super-fast connectivity is what they want. The role of the telecoms sector, the private companies, is obviously to satisfy those expectations… I’m not sure if Cambodia really needs 5G by 2020; I have my doubts. 4G can be scaled to probably 2023 in Cambodia, but if there is a consumer demand and an affordability criteria fulfilled, certainly we will see 5G coming relatively rapidly.

Digital infrastructure, also known as e-infrastructure, has been elevated to a place of major importance in today’s technologically driven world. Businesses are now heavily reliant on digital infrastructure to succeed in the marketplace, meaning that 4G networks and fibre optic cables arguably almost as essential as roads and ports in order for nations to compete on the world stage.

Even back in 2014, Cambodian had some of the fastest internet speeds in ASEAN, according to the now-discontinued Net Index, although it still had some catching up to do on a global scale. Internet usage remains largely centred on mobile, with 98.75% of total telephone subscribers on mobile and just 1.25% on fixed lines in 2016, according to the Ministry of Posts and Telecommunications, which industry experts agree translates to high levels of mobile Internet usage.

This could start changing soon, however, following the introduction of the country’s first undersea fibre-optic cable in March. The 1,300km-long cable, a $100 million project carried out locally by Ezecom subsidiary Telcotech, links up Malaysia, Cambodia and Thailand with the Asia-America Gateway. This pan-Pacific cable connects ASEAN to the US, a development which many observers say will bring faster and more secure connectivity – and may even lower prices.

Photograph provided