Vietnam’s Metfone to Absorb Struggling Beeline

Metfone, Cambodia’s largest mobile phone provider by subscribers, will absorb Beeline, which has struggled to gain a foothold in the country’s fiercely competitive telecoms market, Beeline announced Thursday in a statement posted to its Facebook page.

Beeline, whose parent company is Sotelco Ltd., was purchased by Cambodian businessman Huot Vanthan in 2013 from Amsterdam-based VimpelCom Ltd. Metfone is a subsidiary of Viettel, which is wholly owned by the Vietnamese military.

In its statement Thursday, Beeline says that as of March 24, all of its subscribers will be shifted to Metfone along with their outstanding account balances.

“Sotelco will be terminating contracts with its subscribers as well as ceasing to provide mobile services,” the statement says.

“In order to minimize disruption of mobile services as a result of the transaction, Sotelco and Metfone will cooperate to support Beeline Cambodia subscribers in registering onto Metfone’s networks,” it continues.

“As such, from the 24th March, Beeline subscribers should stop topping-up via Beeline scratch cards, change to Metfone’s SIM cards and top-up via Metfone’s scratch cards at Metfone’s stores nationwide.”

The statement offers no details about the terms of the agreement between Metfone and Beeline, and representatives of the companies either could not be reached or declined to elaborate on the deal.

Tek Eklakana, a call center operator for Beeline, confirmed the deal but said there were “no details about the merger yet.”

“Today, our company just announced to the public and its customers that the Beeline and Metfone companies will merge into each other from the 24th of this month,” she said.

Cambodia’s oversaturated mobile phone market has seen gradual consolidation over the past few years, with Mfone shutting down after declaring bankruptcy in 2013 and Smart merging with Hello in a $155-million deal in 2012.

Stephen Higgins, a managing partner at corporate consultancy Mekong Strategic Partners, said it would be a mistake to characterize the latest deal between Beeline and Metfone as a “merger.”

“It is really just Viettel mopping up Beeline’s user base,” he said in an email. “Beeline has been struggling for some time, and didn’t have the scale to compete with the major players, particularly given the need to invest in a next generation 4G network.”

Mr. Higgins said further consolidation of the market, which now has six firms fighting for a share of users quickly moving online, was likely on the horizon.

“I think most people would have the view that the market can only support 3 players at most, and we’re moving towards that pretty quickly,” he said.

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