Unlimited data at 1.6Mbps costs just $35 a month, writes Don Sambandaraksa in Phnom Penh
Think of 3G and advanced mobile data services such as streaming television and high speed broadband replacement, one of the last countries that comes to mind is Cambodia. But the kingdom's new QB network is promising to deliver these advanced services to a public that has no traditional alternative so to speak, and by doing so leapfrog the competition and bypass a decade of development.
QB (cube), the brand used by Cambodia Advance Communications or Cadcomm, is the fifth entrant to what is rapidly becoming a crowded
Morten Eriksen, CEO, explained that when he was invited to do a 3G project in Cambodia, his initial reaction was that "they must be crazy" and only after reluctantly travelling to Cambodia did he see the potential in a market with three incumbents providing bad, expensive service and where a 256Kbps ADSL line cost over $600 (19,900 baht) a month.
The project formally started in 2004 and they finally got a licence in 2006 before signing a turnkey network agreement with Ericsson in June 2007. Groundwork started in October 2007 and the first test call was made a month later. Finally on March 15, QB was launched with over 57,000 subscribers signing up on launch day courtesy of a huge concert and free SIM packages.
In retrospect, Eriksen said that the licensing delay was a blessing in disguise as it allowed them to take advantage of lower costs for 3G equipment both for network equipment and handsets.
"We are delivering broadband. We are talking differentiation. We decided to take what is intrinsically seen as advanced services, to give to everybody - Internet and mobile TV," he said.
The price for unlimited data for personal use is $35 a month or just $30 for students. The network has been tested to deliver up to 7.2Mbps but the current speed offered commercially is only 1.6Mbps.
Streaming television over 3G does put a heavy load on the network, but next year Ericsson is coming out with a multicast software upgrade which will considerably lower network traffic.
At launch, over 80 per cent of network traffic was data rather than voice and sms, a percentage that rivals developed countries such as
On the distribution side, QB also removed the master dealer and is treating its resellers as partners, with better training and a larger revenue share. It also has installed fingerprint readers to speed the sign-up process. Cambodian law requires a photocopy of an ID and a signature or fingerprint for SIM activation and by doing it electronically, they can cut long queues.
"You can view it as an expensive phone or a cheap Internet access terminal," said CTO John Kjellemo, referring to the higher price of 3G phones compared to cheap 2G only devices.
With low GDP and a small high-end market, many question would anyone consider
"By 2010, the GSM Association forecasts more customers on HSPA than on 2G. 2G will be a 20-year-old technology by then. 3G also has environmental benefits with much lower power consumption and much higher capacity," he pointed out.
With new antenna technology, the QB CTO said that he was getting outdoor coverage distances on his 2,100MHz WCDMA network comparable to old 900MHz GSM networks (lower frequencies travel further). In-building coverage was still a challenge today but already, Kjellemo was looking to the next big step which he strongly believes will be WCDMA on the 850MHz band. The new generation of so-called power cells on 850 with a huge 120km radius will be the key to providing affordable rural coverage, he feels.
Both WCDMA 850 and WCDMA 900 involves re-farming 2G CDMA or GSM spectrum, respectively. However, he believes that WCDMA 850 will win and provide the industry with the stronger in-building coverage and wide area coverage it needs because of a combination of momentum (850 is firmly established in Australia and Latin America) and the fact that there is more spectrum around 850 than there is with 900, not to mention the fact that 900 will have to be shared with legacy GSM for some time to come.
"Today you see a ratio of 95 to 5 between 850 and 900," he added.
QB does not block Skype or other VoIP technologies which many telcos fear so much. "Of course you can try to lock out the market but it can be a driver for increased network usage. History has shown that anyone who tries to be a monopolist will lose in the long run and you get a very bad reputation."
That said, Kjellemo does not expect price to be the main people use Skype for international calls as QB offers a very competitively priced VoIP gateway of its own at just 25 a minute to most countries. Rather, he sees it used for chat and Skype to Skype calls.
He also noted that VoIP in general is a regulatory grey zone with many governments fearing IDD bypass and losing control.
A very important market is the corporate market and QB provides high speed ADSL replacement and IP VPN (virtual private network) services. He expects this market to really take off with HSUPA which offers even higher speeds and much higher upload speeds.
Another popular service is for remittances and for sending money to relatives upcountry.
Kjellemo also had some interesting things to say about IP versus traditional ATM networks and backhaul. He explained that while legacy microwave equipment may indeed have capacity problems for 3G backhaul, today's PDH microwave systems have around 100 to 150Mbps of capacity which is more than enough for a typical 3G cell site.
"But for ATMs versus IP out to the Node B, if you need to save bandwidth on your network, then ATM is the way to go," he said, contradicting what most vendors have been preaching.
This is because that with ATM, the operator gets much better quality of service control than on a pure IP network. With fibre-connected base stations, bandwidth is virtually unlimited and IP does make sense. For microwave connections, operators need good QOS and need to save bandwidth, thus favouring ATM.
"There's nothing about voice or SMS and its everything about music," said Are Mathisen, Chief Marketing Officer who was responsible for the QB launch extravaganza that was the first of its kind, filling the Olympic Stadium with over 100,000 people to a huge concert that was broadcast live on prime time television.
Mathisen was keen to point out that none of the teaser ads prior to launch was about telephones and the showed the latest round of television advertisements which was also all about music and media The next step will be email and QB expects an entire new generation of users to be accessing email primarily thorough their mobile.
QB as recently signed a distribution agreement with MTV for online content the first of its kind in the region, and it is now being used as a basis for further contracts in more developed countries.
Aside from Ericsson for network, Cadcomm selected Canadian-based Redknee for its billing system which Kjellemo said provided a much more flexible and personal touch than the larger, more established names. Oddly it also has a diesel fuel partner as during summer months, power outages can reach over a hundred hours a month and land mine clearing partners.
So where does QB hope to be by next year? Ericksen said that they started fifth in the market, but managed to overtake the forth placed operator within just two weeks of launch. By the end of 2009, he hopes to see QB as
Whether that can be done remains to be seen.
With every operator claiming to be aiming for the number two spot after Mobitel, competition will be fierce. But while all the operators are focusing on traditional voice services, it will remain to be seen if QB's ultra modern data-centric open approach will work, of whether this team of ex-Telenor consultants and engineers go down in history as the crazy bunch who once thought they could bring advanced data services to