Original URL: https://www.theregister.com/2013/07/25/the_floating_mobile_phone_shop_on_the_edge_of_the_internet/

The FLOATING mobile phone shop on the edge of the Internet

Reg man splashes down amid Asia's smartphone shift

By Simon Sharwood

Posted in Networks, 25th July 2013 06:02 GMT

Google Maps can't find the Cambodian village of Prek Toal. Bing Maps is similarly clueless about the community of 6,000 nestled near the north-western end of Lake Tonle Sap.

But Cambodian mobile carrier Metfone knows all about Prek Toal: it has a dealer there in a floating building and may well operate one of three cells the village hosts, each perched on concrete platform that keep them above the high water mark to keep them above wet season floods.

The store's less sturdy. Like almost every other structure in the village, the store floats on a raft of long bamboo branches and styrofoam boxes. That arrangement spares buildings the fate of the local school, currently half-submerged after slipping off its piles.

The sunken school and Unicef's assessment that Cambodia has gross national income per capita of $US830 are just two of the things that make Prek Toal's possession of a mobile phone shop seem incongruous.

For example, fresh water only became available a couple of years back, thanks to the recent arrival of a solar-powered purification plant built by the United Nations Development Program. The water is free, transporting it home is not. Many locals have motor boats to make that easier, or hire one for the job. Fuel for the boats is sold in old whisky bottles at about $US1 a litre. Newer boats cost about $3000.

Metfone's floating phone shop

Metfone's floating phone shop

That's a fortune in a village where a dollar is a not-considerable sum. I stayed with a Prek Toal family whose members have lots of ways to make a crust, one of which is to make and repair clothes. One customer I saw paid 100 Riel – it's about 4,000 Riel to the US dollar - for a repair to his trousers. There's a 100-Riel note, so transactions of that value must be common.

The village isn't shabby or deprived – a meal can be a single cast of a net away – and there are some ways to score a big payout. The family I stayed with had a caged crocodile I was told would fetch a couple of hundred dollars for its skin, or five times that if it were a breeding female.

Yet I also saw local women re-using the small nails they use to help weave mats and baskets from water hyacinth stems. I could go to a hardware store and buy 500 such nails for less than a dollar. Yet the weavers each possessed a container filled with dozens of rusted nails they obviously planned to use over and over again.

Each of those women also possessed a feature phone, and weren't shy of using it.

When I popped into the floating Metfone branch I found a mix of photocopied and colour brochures. No handsets were on display: Prek Toal buildings don't look robust enough to include lockable doors.

A mobile phone mast in the Cambodian village Prek Toal

One of three mobile phone masts in Prek Toal

The handsets getting the biggest push were the $10 MF6202 and the $75, Android-powered and 3g-equipped Leopard MF800. Lesser Leopard models can be had from $35, a price point at which they offer a touch screen but don't name an operating system.

Meanwhile in town

Phones of this sort are also sold in bigger towns. I visited mobile phone shops in nearby Siem Reap, a 100,000-strong town that thrives thanks to its proximity to the temples of Angkor Wat, where vendors told me a basic feature phone costs $20. Samsung and Nokia dominate the market, but LG currently has a $10 model on sale. Many local shops displayed vinyl banners advertising the handset.

In Siem Reap, local carriers' promotions were everywhere: an outfit called Beeline offers black and yellow handsets from $15, locked to its network, which shows just how attractive that $10 LG will be.

The city's stores also had just about any other smartphone you could imagine on sale, at prices just about level to those on offer in more developed nations. Even very new handsets like the Galaxy S4 were on offer.

Some phones looked a little suspicious: a used “iPhone 3G” I was allowed to hold was startlingly white for a four or five year old device and also bore a regular crack around the perimeter of its rear casing. The vendor insisted it was genuine and when I turned it on it behaved just like an iPhone. I wasn't allowed to remove it from its cling wrap cover to put the matter to rest, but that crack looked like it would allow the phone's back to come off, which wasn't one of Steve Jobs's signature moves. Outside of the shops I visited, I never saw a local using a smartphone. But feature phones were ubiquitous. Even in Prek Toal, just about everyone we saw had a phone. The family I stayed with turned theirs on at daybreak, sparking a little chorus of electric birdsong.

FM radios seemed a popular accessory: many phones I saw in a local market (definitely not a tourist venue, although it deserves to be) and a silk factory (a tourist trap from central casting) were pumping music out through their tiny speakers. It turns out that Metfone has a digital music service called iMuzik. Other local carriers have similar offerings*.

Feature phones outnumbered smart phones in the shops, but there were also large numbers of phones with decent-sized screens and the collection of buttons you'd expect to see on a feature phone. Some even bore stickers explaining they could play Angry Birds, a game whose characters enjoy the status of Disney movie characters.

Just what operating system they ran or how the game arrived on the phone remained mysterious. But the phones have quickly found themselves in the familiar role of digital babysitter: I saw more than one pre-schooler with eyes fixed on the small screen and thumbs flying.

Phone shops told me that most Cambodians use pre-paid vouchers, at $1 apiece. Calls cost about ten cents a minute. TXT messages cost two or three cents. Data was more pricey, but also faster than local internet cafes and their promise of three-megabytes-per-minute downloads.

Vendors also offered me coverage maps that show, like this one from another Cambodian carrier Smart, that Prek Toal's not on the fringe of connectivity. Local carriers clearly feel it's a market worth servicing.

The edge of the internet

Was my experience typical?

Yes and no, according to Daniel Pang, IDC Asia/Pacific's ASEAN research manager.

Pang classified Cambodia as a country whose economic development lags behind other south-east Asian nations like Indonesia, Vietnam and The Philippines, but ahead of laggards like Laos.

Throughout the region, he says mobile phone adoption and the move from feature phones to smartphones “is completely driven by economic growth.” Cambodia doesn't have it, Indonesia et al do, and the former is therefore dominated by feature phones.

IDC is yet to study Cambodia, but Pang said your correspondent's account of Metfone's rural store accords with previous patterns in other nations in the region, which quickly adopt feature phones because they become affordable and for the simple human need of liking a chat.

There's a productivity and business angle too: Pang believes that a phone call to gain information on simple things like market prices for goods can make a big difference to a farmer or fisherman.

That's certainly the case in Prek Toal, because one of the things it is hard to do in a floating village is grow fresh vegetables. My guide said locals therefore try to get to town every week or two to stock up, at a price of about $10 per person for the round trip. If locals can know they'll get a better deal for their goods on arrival at local markets, they'll be able to time their shopping trips judiciously which will mean the phones pay for themselves in short order.

That may be an obvious use for mobiles in a remote village, but Pang said it won't be long before Cambodia moves to smartphones.

That shift's already started, according to market-watcher GfK, who provided us with the table below showing phone sales trends in four developing nations.

  Bangladesh Bangladesh Indonesia Indonesia Kampuchea (Cambodia) Kampuchea (Cambodia) Vietnam Vietnam
Handset sales expressed by per cent of market June 2011 - May 2012 June 2012 - May 2013 June 2011 - May 2012 June 2012 - May 2013 June 2011 - May 2012 June 2012 - May 2013 June 2011 - May 2012 June 2012 - May 2013
Mobilephones 98.6 95.4 77.4 70.3 76.5 64.3 89.1 71.9
Smartphones 1.4 4.6 22.6 29.7 23.5 35.7 10.9 28.1
Sales value as per cent of market June 2011 - May 2012 June 2012 - May 2013 June 2011 - May 2012 June 2012 - May 2013 June 2011 - May 2012 June 2012 - May 2013 June 2011 - May 2012 June 2012 - May 2013
Mobilephones 91.7 81 39.7 29.2 29.4 16.3 60.7 33.8
Smartphones 8.3 19 60.3 70.8 70.6 83.7 39.3 66.2
Average selling price in $US June 2011 - May 2012 June 2012 - May 2013 June 2011 - May 2012 June 2012 - May 2013 June 2011 - May 2012 June 2012 - May 2013 June 2011 - May 2012 June 2012 - May 2013
Mobilephones 38 34 55 42 49 36 55 43
Smartphones 234 166 285 243 376 335 289 215

Pang said the killer app for the more expensive handsets is social media. Facebook, he said, is wildly popular in South East Asia for the same reasons it's wildly popular elsewhere. Other social networks in local languages also rack up the visits.

Cambodian carriers offer Facebook-over-SMS, but Pang says as wealth increases locals will want smartphones. Feature phones will be handed down to parents or others with more modest communications needs. Younger and more connected folk will buy no-name Chinese smartphones, the region's dominant variety of handset.

Many will also buy tablets with 3G radios, a class of device Pang said accounts for about three per cent of tablet use worldwide but around 20 per cent in South-East Asia. Locals skip PCs, he feels, and go straight to tablets when they want more than the mobile phone experience.

Still to come, Pang said, is a local ecosystem of apps. The likes of Google, Apple and Samsung are starting to engage local developers, he said, and businesses are emerging with their own app stores.

When they get up and running, those stores will find a ready audience and, if my own experience is anything to go by, networks well and truly capable of satisfying customers.

My last exploration of Cambodian mobile telephony came with the purchase of a SIM, from local carrier QB. $US3 bought me 60MB of data and 10 minutes of international calling time. Only full-sized SIMs were on sale, but the store possessed punches to reduce them to either micro-or-nano sizes.

Service was excellent: calls to Australia went through in seconds, were exceptionally clear and suffered no lag or echo. Internet access throughout Siem Reap was swift and plentiful.

Prek Toal may not be on the map today and is scarcely on the internet. Keeping it off looks to be impossible. ®

Bootnotes

I visited Prek Toal on a recent (entirely self-funded) holiday in Cambodia and stayed a night in the village on a tour organised by eco-tourism outfit Osmose. I shan't forget the experience in a hurry, for all the right reasons.

*The existence of legal digital music services is notable, as I also spotted plenty of pirated music and movies sold at market stalls.

One store even offered a hard drive filled with myriad movies and music. Prices started at $US150 and rose with drives' capacity. The store was almost certainly aiming at western tourists: PCs sell for western prices in Cambodia and would be very expensive for many locals.