With telecommunications operators embroiled in what one industry insider called an “epic price war”, companies are starting to feel the impacts of predatory pricing sparked by Cellcard in January when it offered massively discounted mobile voice and data deals.

Now, nearly six months later, there are no sign of the industry ending their discounted services, despite the Telecommunication Regulator of Cambodia (TRC) calling for operators to offer products above cost-based pricing and threatening to penalise companies that are not.

Thomas Hundt, CEO of Smart Axiata, said that it should come as no surprise that industry revenues were taking a hit when operators offered products that he claimed give away high amounts of data for free.

“Certainly this epic price war has had an impact,” he said. “But we are still seeing our subscriber base growing, although it is more modest compared to years past because the market is starting to become saturated.”

Financial statements released by Axiata, showed that Smart’s data subscriptions have declined, going from 4 million by the end of the third quarter in 2016, to 3.6 million by the end of the first quarter this year.

However, despite the decline in subscriptions, revenue increased from $71.1 million to $71.4 million from the last quarter of 2016 to the first quarter of this year, driven by an increase of data subscriptions by 10.3 percent in 2017. These figures, Hundt claimed, showed that it had not lost its impressive market share.

“Obviously the price war has left marks on our revenue growth and we do not see the staggering rates we saw in 2014, 2015 and parts of 2016,” he said.

“But still, using our key measurements of data growth, we see constant revenue growth and there has been no change in the market share.”

While he called out the government’s lack of action in addressing industry concerns, claiming that no other operator has transparently released their financial statements, he said the ongoing price war will inevitably lead to instability in the sector.

“The problem is that the discussions on market sustainability have gone nowhere,” he said. “At best, industry wide revenues will be flat this year while some operators will lose revenue.”

Hundt remained confident that Smart would not see any losses as it tries to expand its subscriber base. The company would also continue to operate transparently, he said, something he claims cannot be said for the likes of Metfone and Cellcard.

“Because the Cambodian market lacks transparency, nobody is able to challenge what the telecom law states that operators should offer their services above cost,” he said.

“If the other providers do not submit their financial statements, it is impossible for the government to see who is operating properly.”

Both Cellcard and Metfone have declined to produce revenue figures or financials for this story.

Nevertheless, Ian Watson, CEO of Cellcard, said that in terms of subscriptions, the company has seen an impressive spike since January.

“Since the launch of the Osja Xchange and Big Love data offers in January and February, data consumption on the network has more than doubled, and data users have increased by 25 percent,” he said.

He added that the company has no plans of scaling back its offers that have been providing affordable data at the “best value, and the best network.”

“We will continue to drive mobile data penetration, which has a direct impact on GDP,” he said. “As the only Cambodian-owned operator we are committed to helping progress the nation and mobile data is key to this.”

Helene Veal, head of Metfone’s brand development division, also said that the price war has boosted subscription rates.

“From Metfone’s side, we are achieving impressive results during the first quarter, especially data 3G and 4G subnetworks,” she said in an email.

“Data subscriptions of Metfone grew by 73 percent and data revenue grew by 63 percent in first quarter of 2017.”

However, she acknowledged that there were valid market stability concerns.

“Metfone understands that if the Cambodian market continuously keeps this competitive landscape, operators will face difficulties of decreasing profits and taxes paid to the government, as well as resources for new investment,” she said.

As for Hundt, he said that with current monthly data consumption costing consumers less than a “cup of coffee from Starbucks” maybe the government will finally take notice when it sees a dent in its coffers.

“The bigger concern is that our competitors are not paying their taxes and there is no action so far to change this,” he said. “And this should be extremely troublesome for the government.”