Cambodia’s Smart Launches WeChat Go SIM for Chinese Tourists

Cambodian mobile operator Smart Axiata has launched the Smart WeChat Go SIM, a prepaid product for Chinese visitors. The product is a result of Smart’s partnership with the Chinese messaging and mobile payment services provider WeChat. Smart WeChat Go SIM is available in three variants. Visitors receive unlimited access to WeChat and the Lingcod TV app; they also receive up to 8 GB of data for internet access, calls to China, and on-net calls and SMS in Cambodia.

The SIM cards will be available for purchase in designated distribution points in China as well as in Cambodia, at Siem Reap and Phnom Penh International Airports. In Cambodia, the three SIM types will be priced at US $3.00, US $5.00 and US $7.00, respectively. Smart WeChat Go SIM users can manage their usage through WeChat’s self-help mini-program in the Chinese language.

By 2020, nearly 2 million tourists from China are expected to visit Cambodia. An offer that is aimed at them is likely a very good idea for Smart, which can expect to sell a lot of SIMs to this fast-growing target market. And partnering with WeChat, which more than dominates the Chinese mobile market, is a natural way of doing it.

WeChat is the international brand name for the platform known in Chinese as Weixin (meaning “micro-message”). Developed by Chinese multinational Tencent, it combines a messaging service, its own social media and a mobile money functionality. It has more than 1 billion monthly active users, and more than 90 percent of its subscribers are based in China. WeChat also has very sophisticated business-oriented variations of its service. The influence and penetration of this so-called “super-app” outstrips anything the other OTT messaging apps, including WhatsApp, can do. That makes it in many ways a desirable partner for any operator outside China that is interested in developing a vigorous relationship with Chinese nationals.

The one potential problem for some operators in partnering with WeChat is that users in China have accused the app of participating with the Chinese government in censorship and surveillance efforts, and there are concerns globally about WeChat’s security or lack thereof. This cautionary note is being heard, but in markets such as Cambodia, these issues may be outweighed by the revenue opportunities and by the need to maintain a close relationship with China. In other markets, such as in the West, partnership with WeChat is likely to be less appealing and perhaps less necessary in any case.

Tarifica is the global leader in monitoring and analyzing telecom pricing. Covering hundreds of operators in every region of the globe, Tarifica’s databases of mobile and fixed line data and voice tariffs are among the largest and most in-depth in the world. Tarifica is also a leading publisher of benchmark and other pricing reports, and its analysts are recognized authorities in the telecom industry, relied upon by operators and businesses worldwide for pricing insight and guidance.  If you have any questions about this article, feel free to contact our Editor-in-chief John Dorfman at jdorfman@tarifica.com

To learn more about Tarifica, please visit www.tarifica.com 

TPG Stops Mobile Network Rollout Due to Huawei Equipment Ban

Australian operator TPG Telecom has announced that “due to factors outside TPG control, it has decided to cease the rollout of its mobile network in Australia.” Since the announcement of its mobile network strategy in April 2017, TPG has been designing and implementing a mobile network based mainly on small-cell architecture. The principal equipment vendor selected for use in the network was Huawei, and the Chinese vendor was supposed to enable TPG’s upgrade to 5G. However, TPG said, in light of the Australian government’s announcement last August that it would prohibit the use of Huawei equipment in 5G networks, that upgrade path has now been blocked.

Since that announcement, TPG has continued to deploy equipment which it had ordered from Huawei prior to the government’s ban, but having reached the decision point as to whether or not to place orders for additional Huawei equipment, TPG has concluded that “it does not make sense to invest further shareholder funds in a network that cannot be upgraded to 5G.”

The operator says it has already invested around AUD 100 million (US $71.8 million) in the network rollout. Prior to August 2018, it had acquired equipment for 1,500 sites, and to date it has fully or partially completed the implementation of around 900 small-cell sites. Additional capex of AUD 30 million (US $21.5 million) is already committed, TPG added.

In last week’s Story of the Week, we wrote about the Dutch government’s consideration of a plan to place restrictions on Chinese suppliers of equipment to build out 5G networks in the Netherlands. We pointed out that development of next-generation network technology without sufficient concern for security is risky, and that the particular risk of spying and disruption from China—to be achieved through Chinese-made equipment—makes it imperative to take seriously the idea of restricting the role of such equipment in 5G projects.

However, as the present example from Australia shows, that course of action is not without risks of its own—including foreclosing the possibility of 5G development in the case of some operators.

Australia did not ban all Chinese-made equipment, but last summer it did impose a total ban on equipment from one Chinese supplier, Huawei, which happens to be the biggest telecom equipment maker in the world. The resulting lack of access to its devices was enough to doom the 5G development of one operator, TPG, and as a consequence, of TPG’s entire mobile-network project.

TPG is an internet service provider and also owns Australia’s largest MVNO; it had been planning on becoming an MNO, as well—an ambition that now cannot be achieved. We should bear in mind that restrictions on Chinese equipment such as Australia’s will not necessarily have such as dramatic effect on other operators’ plans; TPG was building a network from the ground up, and since it was a new entrant into the MNO market, it was of course more vulnerable than established actors. Still, the case contains a lesson, which is that banning access to equipment, while potentially a very sound idea in terms of cybersecurity, can have a chilling effect on 5G and even 4G development, under certain circumstances.

Therefore, governments should bear that in mind and do whatever they can to make alternatives available and encourage technological development by every means possible. Just this week, German operator Deutsche Telekom warned that Europe would fall behind the U.S. and China if European governments ban Huawei equipment. The German government is currently considering a ban, and DT estimates that if enacted, it would delay the rollout of 5G by at least two years.

As a side note, we should point out that last week we quoted the former chief regulator of the U.S., Tom Wheeler, to the effect that in its effort to win the 5G “arms race,” the U.S. government is not doing enough to promote security. This week, a U.S. media report states that the U.S. is about to come out with a sweeping ban on U.S. companies using Chinese-made 5G equipment and is pressuring allies such as Britain and Poland to do likewise.

 Tarifica is the global leader in monitoring and analyzing telecom pricing. Covering hundreds of operators in every region of the globe, Tarifica’s databases of mobile and fixed line data and voice tariffs are among the largest and most in-depth in the world. Tarifica is also a leading publisher of benchmark and other pricing reports, and its analysts are recognized authorities in the telecom industry, relied upon by operators and businesses worldwide for pricing insight and guidance.  If you have any questions about this article, feel free to contact our Editor-in-chief John Dorfman at jdorfman@tarifica.com

To learn more about Tarifica, please visit www.tarifica.com 

iPhone Could Reveal “State Secrets”

Chinese state media broadcaster CCTV has warned that the iPhone’s location-finding technology could be used to track customers’ whereabouts and movements. Quoting Ma Ding, head of the department of network security at China People’s Public Security University Information, the broadcaster reported that information such as the user’s home address and location can still be recorded even if the location services feature is turned off. The CCTV report further stated that mass collection of such “sensitive” data could possibly reveal “state secrets.” Citing the revelations of former U.S. security contractor Edward Snowden, the Chinese report said that Apple passed users’ personal data to U.S. spy agencies.

It is somewhat ironic that now that the three major Chinese operators are offering the iPhone (China Mobile, the largest, having struck a deal with Apple in December 2013), the Chinese government has chosen to make a statement that will cause uncertainty in the marketplace as to future viability of the device in China. While we cannot offer any opinion as to whether or not the smartphones actually compromise Chinese state secrets, the CCTV statement was likely motivated at least in part by the U.S. government’s charge last week that five Chinese military officers hacked into its computer networks. Whatever the case may be, the situation is bad for Apple, which with the China Mobile deal gained potential access to a subscriber base of 760 million. The company has posted a statement on its Chinese-language website saying that it has never “worked with any government agency from any country to create a backdoor in any of our products or services.”

 

“By awarding 4G licenses to the country’s three operators, the Chinese government has clearly indicated that it wants the high-speed networks to succeed. However, two of its recent actions seem to work against that goal. Restricting subsidies on 4G-compatible mobile devices could very well diminish the number of potential customers who will be able to afford them and thereby reduce demand for 4G. The anti-iPhone statement could hurt sales of a very prominent 4G device, and if it were to lead to any restriction or elimination of iPhone distribution in China, the effect on the 4G sector could be even worse.”

John Dorfman,

Editor-in-Chief,

The Tarifica Alert