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Mobile merger is approved

Smart Mobile’s Chief Executive Officer Thomas Hundt (left) and chief
marketing officer Kirill Mankovsky (right) speak on Wednesday. Photo by: Sovan Philong
The long-awaited consolidation of Cambodia’s overcrowded mobile phone
sector started Wednesday, as Smart Mobile and Star-Cell officially
merged into one company.

Following the announcement of the
prospective deal last month, the firms on Wednesday claimed to have
obtained the “necessary approvals” for the merger.

The newly
formed provider will operate under the roof of the Smart Mobile brand
and claims to be the third largest of the Kingdom’s eight mobile
operators, with some 850,000 subscribers – though some in the industry
have previously expressed skepticism at the number.

“There is a
competitive advantage for those who are leading the market, including
Smart Mobile,” said Smart’s chief executive officer Thomas Hundt at a
Phnom Penh conference on the merger Wednesday.

“Those who cannot leverage on the economy of scale, they will have more difficulty to be successful, to be profitable.”

The
number of operators is likely to shrink further to reflect the reality
of the Cambodian market, he said, to perhaps four or five providers.

“There
are not so many countries in the world comparable to Cambodia, which
have such a high number of operators relative to the number of people,”
said Hundt.

Existing Star-Cell outlets and dealers will be rebranded to Smart Mobile by March this year.

The
combined provider will be 75-percent owned by Smart’s owners,
Cyprus-based Timeturns Holdings, and 25 percent by Star-Cells’s parent
company, TeliaSonera AB.

The two owners have also co-operated in other markets.

On
December 6, the same day that TeliaSonera first announced the merger,
TeliaSonera increased its ownership in Nepal service provider NCell to
60.4 percent, from 40.8 percent. Smart Mobile’s owners Timeturns also
have a stake in NCell, according to their website.

Thomas Hundt
said cooperation by the owners in other markets was a positive factor
influencing the Kingdom merger – but not its main impetus.

“At
the end of the day, it was a pure [business] decision based on the
facts and based on the value for the investors here in Cambodia,” he
said.

Hundt said that no cash payment had been made from one side to the other in respect to the merger.

The
deal came after rival Cambodian providers had also expressed interest
in acquiring Star-Cell. qb chief executive officer Alan Sinfield said
his firm made a cash bid for Star-Cell. Smart plans to expand its
coverage to the Kingdom’s 24 provinces by the first half of 2011, as
well as making 3G service available in the larger cities.

Phnom Penh Post
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