State-owned Telecom Cambodia (TC)’s IPO on the local stock exchange has reportedly been postponed indefinitely due to poor financial performance.
The telco will not be allowed to list on the Cambodia Securities Exchange until it redesigns its business…
State-owned Telecom Cambodia (TC)’s IPO on the local stock exchange has reportedly been postponed indefinitely due to poor financial performance.
The telco will not be allowed to list on the Cambodia Securities Exchange until it redesigns its business plan and improves operations, according to the Phnom Penh Post citing a government source.
Sarak Khan, secretary of state at the Ministry of Post and Telecommunications, told the local paper that the telco’s financial performance was worse than the ministry had realised.
Current regulations stipulate that a company must make a net profit for three years before being allowed to float on the country’s stock exchange.
TC is said to make more than 50% of its revenues from transit fees, which is a service fee they charge people to connect to other provider networks. The fee is charged at one cent per minute and reportedly makes the company around US$17m per year, said Khan.
However, excluding the transit fees, the fixed-line operator’s revenues have decreased year-on-year since 2008, according to a report from auditor KPMG cited in the Phnom Penh Post.
TC lost around US$14.4m in 2011 and US$10.2m in 2012, said the report.
TC has a new competitor now that Axiata Group recently expanded its presence in the Cambodian market.
As TelecomFinance reported in December, the Malaysian telco acquired local telco Latelz, which operates under the Smart Mobile brand name, for US$155m.
Axiata is merging Latelz with its Cambodian subsidiary Hello Axiata, creating one of Cambodia’s largest operators in terms of subscribers and revenue.
BofA Merrill Lynch acted as sole financial adviser to Axiata.
