Issue Description
The Royal Government of Cambodia reserves the right to allocate and assign the use of defined wireless spectrum bands to telecommunication companies. At present there are many private sector entities holding spectrum in Cambodia, though some of these entities hold the spectrum exclusively while not actually providing any services. Wireless spectrum is a scarce natural resource and only a narrow range of this spectrum is suitable to deliver reliable wireless signals; a system of allocation that does not ensure effective utilisation hinders the development of telecommunications services.
The Cambodian Law on the Management of the Nationally Reserved Spectrum was enacted in 2016 to regulate the use of radio frequencies in Cambodia. The law established a framework for the management of the spectrum, including the auctioning, assignment, and licencing of frequencies, as well as the regulation of interference and the protection of public safety.
An auctioning system differs from a competitive tendering process as an auction allocates the spectrum based on the highest value offered by interested parties, whereas with a competitive tender, allocation is based on a submitted business plan that is then judged against specific criteria. Spectrum auctions are an allocation method that is common in other countries. However, such auctions must be subject to reasonable controls to avoid inflation of the price by speculative bidders who do not have the financial capabilities to pay the prices that they bid for or the competencies to roll out services using the spectrum.
Impact on business
The telecommunications sector would benefit from the Royal Government of Cambodia ensuring that spectrum is in the hands of service providers who will make use of this resource as these service-providing companies contribute more to tax revenues, job creation and increasing connectivity. Conversely, the hoarding of spectrum assets without offering services represents an opportunity loss for the Royal Government of Cambodia in the full realisation of the digital economic potential, in terms of telecom traffic, e-commerce, video streaming and other areas.
Recommendation
- Restrict future auctions to the allocation of new spectrums and ensure that bidders are appropriately screened.
Should the Royal Government of Cambodia follow through with its decision to introduce spectrum auctions, we would recommend that this mechanism only be utilised for the allocation of new spectrums such as for 700MHz, rather than for the renewal or reallocation of existing concessions, for which the existing competitive tendering process is sufficient. This together with the requirement that bidders go through a pre-bidding procedure before participating in the auction, will ensure that the prices of spectrums are not artificially driven up by bidders. Pre-bidding screening should require companies to demonstrate serious intent to offer services on the spectrum that they are bidding on, for example by offering roll out plans and demonstrations of financial capacity, before being granted permission to participate in the bidding process.
Furthermore, we recommend that the existing spectrum allocations of current licences should be maintained (unless not utilised at all), while minimal roll out obligations or similar controls should be considered to deter non-serious players. Additionally, more spectrums should be released for mobile services to support Cambodia’s digital inclusion agenda.
Royal government of Cambodia
Initiative from Eurocham: The issue has been raised by the Digital & Technology Committee within The White Book edition 2024 in the Recommendation No. 27.
National Counterparts
Ministry of Posts and Telecommunications
Contributors
