A Cellcard employee uses his mobile phone outside the company's service centre on Norodom Boulevard in Phnom Penh yesterday. Photograph: Vireak Mai/Phnom Penh Post

MFONE, part of the Thaicom group, has reached a deal with locally based Mobitel by transferring all its subscribers to Mobitel, a leading mobile operator in Cambodia.

The deal, struck last Friday, comes a month after Hello Axiata signed a merger agreement with the Latelz Comp-any, which operates under the Smart Mobile brand.

Officials and industry players said the latest merger would improve the industry, making it more sustainable.

Mobitel will provide an immediate roaming service to all Mfone subscribers in Cambodia for 60 days from today to avoid any interruption of service. At the same time, both companies will work together to transfer all Mfone subscribers to Mobitel.

“Today, Mfone announced that [we] are transferring our subscribers to Mobitel due to the financial problems [of] Mfone,” the statement said.

Mfone said that after careful consideration of maintaining customers’ benefits, it had decided to choose Mobitel for transferring its subcribers from the Mfone network.

“Mfone subscribers will receive a free Mobitel SIM card to let them use the Mobitel network. And Mfone subscribers will keep the number and prefix which are [already] being used.”

Kith Meng, chairman of the Royal Group, the parent company of Mobitel, declined to comment, only referring to the statement.

Thai newspaper The Nat-ion reported two days ago that Mfone had petitioned for insolvency proceedings in Phnom Penh last Wednesday after facing difficulties in an intensely competitive market and failing to complete the sale of its shares to INT Management Service.

“Mfone has been through a very difficult time over the past two years,” Thaicom chief executive Suphajee Suthumpun was quoted as saying.

“We were informed by [Mfone’s parent] Shenington Investments that despite all efforts to rescue the business, the latest setback had required it to make the extremely difficult decision to file a petition to enter insolvency proceedings.

“In discussions with Shenington and Mfone, we have been informed that Mfone will continue to operate and provide services to its cust-omers while the considers Mfone’s petition, and before it announces a decision.

“At the same time, Mfone will continue to uphold its responsibilities towards its employees in accordance with the laws and regulations of the Kingdom of Cambodia.”

According to Smart Mob-ile chief executive Thomas Hundt, the deal will help to strengthen the market.

“That Mfone made this move to file bankruptcy is no surprise, and it’s another move to clean up the telecom sector in Cambodia. [I am] not willing to comment on the potential arrangement they have made with Mobitel,” Hundt said.

“In any case, this arrangement is questionable.

“In terms of the subscriber base . . . in terms of the market, it’s an overdue situation that has finally happened. It will help make the telecom market in Cambodia sustainable.”

Posts and Telecommunications Minister So Khun said the ministry had not received any official documents from mobile-phone companies that wanted to merge or sell.

“I have not got an official letter from them yet. I think they may be working on the deals. However, I welcome them merging because it can help them [become] stronger,” he said.

“And I don’t think it affects the industry. It just reduces the numbers of operators, not the number of subscribers.”

Data from the Ministry of Posts and Telecommunicat-ions shows Cambodia has nine mobile operators. According to recent reports, the industry has sold about 20 million SIM cards, far exceeding the population of 15 million.

To contact the reporters on this story:

May Kunmakara at [email protected]

Anne Renzenbrink at [email protected]