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Axiata, the parent company of Hello, said last month that revenues for its Cambodian operations fell 17.4 percent in the second quarter, citing aggressive promotional activities in the industry, including the distribution of free SIM cards.

Millicom International, the Luxembourg-registered telecoms multinational that currently holds a majority stake in market leader Mobitel, cited over-competiveness in the Kingdom's mobile sector for its decision to withdraw. It is currently finalising a deal that would see the Royal Group buy its stake for US$346 million.

However, one industry insider, who declined to be named, noted that penetration and users were increasing across the sector, and that growing revenues were being redistributed from early entrants to the newer arrivals.

Moscow-based Vimpelcom, the parent company of the Beeline brand through its local subsidiary Sotelco, announced 28 million rubles (US$884,468) in revenues for its Cambodia operations since its launch in May. It noted "initial sales have been strong".

It has been accused by Mobitel of pricing its services, at $0.05 a minute, at below cost, a charge it denies. The company on Tuesday stopped taking new customers on its "Boom" tariff but has promised existing customers they will continue to benefit from its low rates.

Simon Perkins, CEO of Hello in Cambodia, said Thursday that even $0.06-a-minute calls were "not sustainable".

"Only the larger players can generate sufficient revenue to meet their operating costs at these levels because they have the critical mass of total customers," he told the Post by email. "Once the revenue drops below certain levels, operators have to cut back on capital investment."

Mark Hanna, chief financial officer of Royal Group, accused Beeline on Thursday of "damaging the industry" through its pricing policies.

"Selling below cost in order to gain market share is irresponsible in any industry," he said.

Beeline defended itself this week, arguing that charging $0.05 a minute on certain tariffs didn't represent below-cost price overall because it was still making money on other mobile-phone services. Industry insiders say that it costs all mobile firms in Cambodia $0.0595 for a one-minute call. Beeline added that it charges users by the second, whereas it pays interconnect charges by the minute or part thereof, meaning it did not necessarily lose money on the calls.

Beeline was unavailable for further comment on Thursday.

A number of mobile companies have revised their tariffs in recent weeks.

Mobitel has recently announced it will charge by the second on calls and not by the minute. Hello this week announced a flat rate of $0.07-a-minute calls to all networks, and Beeline is scheduled to announce its new pricing policy today following the discontinuation of Boom on Tuesday.