Telecom Tax in Pipeline

KHMER TIMES
MAY KUNMAKARA

People ride past a branch of the state company Telecom Cambodia in Phnom Penh. There are close to seven million users of mobile internet in the country. Reuters

Future growth of telecom networks in rural Cambodia will be funded by a three percent tax on gross revenue for the country’s telecom operators, due to begin within the first half of 2017.

Im Vutha, spokesperson for the Telecom Regulator of Cambodia (TRC) told Khmer Times yesterday that two percent of the tax will fund the Universal Service Obligation (USO) Fund, and a further one percent will be spent on research and development.

“So far we are preparing the sub-decree to be approved by the government on the process of using the funds – how the funds would be authorized and managed,” he said, adding that it will not likely to be ready until the new year, and will be approved by the government shortly afterwards.

Presently, the TRC is researching how other Asean countries approach collecting money for such funds, Mr. Vutha said. The fund will be under the control of the Ministry of Posts and Telecommunications, he added.

In India, for instance, the USO Fund is used to provide widespread and non-discriminatory access to quality information and communications technology services at affordable prices to people in rural and remote areas.

“In many other countries they have implemented such a fund, under the authorization of the relevant government ministries,” said Mr. Vutha. The TRC will act as regulator.

“Once we have the fund, it will be opened for bidding to the operators to begin implementing it, which is a system based on other countries’ practices,” he noted.

Idham Nawawi, chief corporate officer at Smart-Axiata’s parent company Axiata Group, said that such development funds are common across the region, and that the industry was waiting to see the specifics of the Cambodian plan.

“What is important from my view is that we want to see the sub-decree to learn how the funds will be spent, who can spend those funds, and what kinds of projects will be included – so I think it is important that everything is defined properly,” Mr. Idham told Khmer Times.

He said that the proposed three percent was acceptable, so long as the money was spent wisely, in ways that will further develop the telecoms network in Cambodia.

According to Mr.Vutha, by the end of September, there are six mobile, eight landline phone and 35 internet providers. There are some 19.3 million mobile contract subscriptions, 235,000 landline subscribers, seven million users of mobile internet and almost 90,000 home internet subscribers.