Regionally, Cambodia is in second place behind Singapore for mobile Internet usage. These growing technologies are providing good opportunities for investors who use technology efficiently for the purposes of bettering their business and increasing their profits. The mobile telecommunications market is very competitive.
With the aim of providing a clear legal and regulatory base for both telecommunications companies and their customers, the Royal Government of Cambodia (RGC) has, after some years of discussions, brought about the passing of the Telecommunications Law (Telecom Law) through the National Assembly and the Senate. The Telecommunications Law was finally signed into law on December 17, 2015.
One of the key aims of the Telecom Law is to ensure the utilization and provision of network services by ensuring a high level of safety, quality, reliability, and affordability for customers and to promote fair competition.
Key takeaways from the Telecom Law:
- While the Ministry of Posts and Telecommunications (MPTC) retains power to regulate sectors by enacting regulations (Prakas), managing spectrum, and setting tariffs, the Telecommunications Regulations of Cambodia (TRC) also has significant powers; for example, issuing licenses, permits and certificates, supervision of activities and financial matters, and resolving disputes.
- Article 5 (f) of the law provides for the issuance of regulations on licensing regime, interconnection & access, service quality, numbering, spectrum management/allocation, and fair competition by MPTC. All of these regulations will eventually replace the existing regulations already issued in the respective areas.
- No person can build a telecom network or provide telecom services without a license, permit, or certificate issued by the TRC - Article 17 of the law stipulates the licenses required for telecom networks and services.
- Article 23 also gives the TRC the right to apply to the court to initiate insolvency proceedings against any telecom company which becomes insolvent or have “financial issues” and even to request a provisional administrator to be appointed. This is an unusual power by international standards.
- Articles 31 and 32 obligates each telecom network operator to provide interconnection, accessibility to its infrastructure and services on a non-discriminatory, transparent and cost based. The TRC has the final decision on any interconnection agreements if there is a dispute between operators.
- Article 39 establishes the principles of universal service (US) obligations of operators and service providers who bring connectivity to underserved areas of Cambodia, with the use of US funds to which all companies will contribute 1% of gross revenues annually.
- Article 54 gives the MPTC the power to regulate tariffs. Although Article 56 also gives the TRC the right to monitor and regulate telecommunications service tariffs – the division of responsibility with MPTC and TRC is not 100% clear. Interconnection and access services and retail prices should all be on a cost-based formula and Article 58 states that no service tariff should be lower than the cost.
- Articles 60-62 provide that the TRC will monitor competition in the telecommunications sector. There are lists of offences and abuses that are punishable by fines and other penalties. However, the Telecom Law does not provide a range of ex ante regulatory remedies for potential abuse of e.g. a dominant position in a telecom market or the regulation of a participant with “significant market power” in a telecom market.
- Article 63 – all mergers and takeovers or sale/purchase of equity in a license holder are subject to approval by TRC.
- Article 64 – the telecom operators and service providers are given right of consultation before any new laws or regulations are introduced – we would suggest that this should be a public consultation in line with the best international practice.
- Article 67 gives the TRC the power to resolve disputes between telecom companies and between a telecom company and its’ customers. This power is often given to a special court or to the general courts in other countries.
- Articles 69 and 70 provide for violation of law and the punishments thereof, including, but not limited to the right of TRC to appoint telecom inspectors to investigate and enforce the law and regulations. TRC also has policing powers in criminal investigations.
- Article 78 gives the TRC the rights to require compliance with, to suspend or to impose restrictions on a license in the event of violation of license terms, and the right and option to impose fines.
Some participants in the telecommunications sector are unclear about their positions under Article 110 as to when and how they are required to re-apply for permits, certificates, licenses (or if their existing permits, certificates, licenses are remain valid in the meantime). Article 110 states “Within one year from the enforcement date of this Law, telecommunications operators or persons involved with the telecommunications sector shall reapply for permit, certificate or license at TRC in order to unify those documents in accordance with this Law and other regulations”.
While the Royal Government of Cambodia is acting through the MPTC and retaining some discretionary powers in cases of force majeure or national emergency to order relevant telecommunications operators to take necessary measures. All of these operators must apply for a new license within 1 year of the effective date of the new Telecom Law (i.e. by December 17, 2016).
The Telecom Law is still new for Cambodia and the TRC has not yet started to issue the Prakas which are required by the Law, however, we understand that working on the new licensing regulations will start soon and may be issued by the end of 2016. Only when the full set of regulations have been issued in accordance with Article 5 (f) of the Telecom Law will telecom investors, operators and service providers fully understand how the law works in relation to their businesses.
