IHS Jane's Intelligence Weekly
22 July 2014
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EVENT
On 24 July what appeared to be a draft telecommunications law was apparently leaked from the Cambodian Ministry of Posts and Telecommunications (MPTC), detailing a government plan to take greater control over the sector.
According to Phnom Penh Post , which reportedly received the draft from an unnamed source, the 31-page 100-article Khmer-language document stated that no company can both operate infrastructure assets and also provide telecoms services, such as telephone, radio, television and internet.
If the supposed draft law is submitted and approved by the ruling Cambodia People's Party (CPP)-dominated National Assembly in its current form, telecoms companies that want to retain their retail operations would be required to sell their infrastructure assets and rely on what the government-controlled infrastructure provides, the Phnom Penh Post reported. The draft law also reportedly stated that the "ministry will use the telecom sector as a tool to maintain social order".
FORECAST
The draft law is likely to be politically motivated. This is because the law would ensure the government, which has agreed to grant the opposition access to television and radio station licences as part of the deal to end the year-long political deadlock following disputed July 2013 elections, has the final control. If approved, the law would significantly increase expropriation and contract frustration risks for both domestic and international telecoms companies with operations in Cambodia, as it is likely to involve a reassessment of all telecoms licences. The approval of the draft law, which has been labelled as a draconian effort to nationalise the industry by Cambodian telecommunication companies according to the Phnom Penh Post , would be an unprecedented move by the government. Expropriation to date has been confined almost exclusively to land and property of domestic entities and as ownership of the former is barred to foreign nationals and access to the latter is restricted this has not been a major problem for overseas investors operating within the country's legal system.
