Turkmenistan - Telecoms, Mobile and Internet

Paul Budde Communication Pty Ltd
January 16, 2012
19 Pages - SKU: PBC6773524
Attention: There is an updated edition available for this report.
Countries covered: Turkmenistan

Turkmenistan - Telecoms, Mobile and Internet

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The Turkmenistan - Telecoms, Mobile and Internet report includes all BuddeComm research data and analysis on this country. Covering trends and developments in telecommunications, mobile, internet, broadband, infrastructure and regulation.


Additional Information

Executive summary

Turkmenistani market in turmoil following suspension of MTS licence

Turkmenistan’s telecommunications services are considered to be the least developed of all the Commonwealth of Independent States (CIS) countries. Poor growth in telecom services can be attributed to a large extent to the slow development of the private sector and state control over most economic activities. Efforts to move towards a more market-oriented economy have been limited. In the telecom sector there has been some progress on this front, but this in turn has been overwhelmed by significant setbacks.

Overall, the telecom market in this poor and predominantly rural country is relatively small but has been trying boldly to expand in recent years. The state-owned Turkmen Telecom has been the primary provider of public telephone, email and internet services, and through a subsidiary has been operating a GSM mobile network in competition with a private mobile operator, BCT (BCT became MTS Turkmenistan in 2005 after being acquired by the Russian-based MTS). Not surprisingly it has been the mobile services that have been dominating the expansion activity. In 2008 the country saw annual subscription growth in excess of 140%, although growth slowed significantly to about 33% in 2009. As a consequence, in a two-year period Turkmenistan, one of the smallest markets in the region, saw its mobile penetration jump from 8% to 30%.Combined fixed-line and mobile teledensity had reached slightly more than 70% by late 2010.

The mobile market was thrown into turmoil in December 2010 and coming into 2011 after the government suspended MTC’s mobile licence and then decided not to renew the operator’s mobile concession. MTS had been by far the dominant mobile operator up to that stage with around 80% of the mobile market. It had also rolled out a substantial network, covering around 85% of Turkmenistan’s territory. By late 2011 there had been no progress on the resolution of the dispute and the parent MTS was operating as if its Turkmen subsidiary did not exist.

In other respects it had certainly not been smooth sailing for the operators. Over the 2008/09 period the mobile operators felt the impact of the global financial crisis. Revenues were hit as the monthly ARPU recorded by BCT in Turkmenistan fell more than 70% to less than US$13 by the fourth quarter of 2008.

Growth of the internet sector had been seriously stifled back in 2000 when the four existing independent ISPs were forced out of business due to the government’s decision to grant Turkmen Telecom a monopoly over data services. The abrupt closure of the ISPs was consistent with government policy, which required tight control over all communications in the country. Internet access continued to be severely restricted, and the few internet cafes that existed in Ashgabat were closed down in 2002.

After two decades of repression, the incoming president, Gurbanguli Berdymukhamedov, announced in early 2007 that the government had re-opened internet cafes in the capital Ashgabat and was set to follow this move in regional centres. One hour of computer time cost about US$4, however, a high price in a country where two-thirds of the population live below the poverty line and the average monthly income was less than US$100. It was not immediately clear how far these reforms would go. By 2010 it was evident that the new president was keeping his promise about keeping the internet cafes open. There were still considerable restrictions on the use of internet, however.

Market highlights:

The Turkmenistan telecom market has been dominated by the suspension and non-renewal of MTS Turkmenistan’s mobile licence; this happened in December 2010/January 2011, but the repercussions were felt right through 2011 and into 2012.

A major outcome was that state-owned mobile operator TM Cell, as the sole remaining mobile operator in the market place, was struggling to cope with the demand for service, with in excess of 2.5 million MTS subscribers left without a service provider.

By end-2011 it was not clear how many working subscribers were being served by TM Cell.

Prior to the suspension/non-renewal of MTS’ concession at the end of 2010 mobile subscriber numbers in Turkmenistan were finally on the increase but were still relatively low in number, having just passed the 3.2 million mark, representing a penetration of 63%.

By late 2011 there had been no progress on the resolution of the dispute and the parent MTS was operating as if its Turkmen subsidiary did not exist.

By December 2010 MTS, prior to its suspension, claimed around 80% of the mobile subscriber market.

For a number of years previous, growth had been outstanding; mobile subscriber numbers increased by almost 300% in the two year period 2008/09;

Fixed-line penetration in Turkmenistan had been struggling to break through the 10% penetration barrier; it finally did so in 2010;

Internet growth in the country had been hindered by severe government controls until 2007 when there was an apparent easing of restrictions; this has not, however, seen the expected lift in Turkmenistan’s internet usage; again, it was hard to confirm the precise situation with the limited official figures available;

There were early signs of broadband internet access being made available in the country; but an estimated broadband penetration of less than 0.1% in 2011 did not look promising.Turkmenistan - key telecom parameters - 2010 - 2011

Category20102011 (e)

Fixed-line services:1

Total number of subscribers520,000550,000
Annual change5%6%
Fixed-line penetration (population)10%11%

Mobile services:

Total number of subscribers (million)3.24.5
Annual change50%41%
Mobile penetration (population)63%88%
(Source: BuddeComm)
Note: 1the mobile statistics for 2011 are uncertain given the suspension of MTS licence

This report provides an overview of the trends and developments in the telecommunications markets in Turkmenistan.

Subjects covered include:

Key statistics;
Market and industry overviews;
Major operators (mobile and fixed);
Regulatory environment;
Infrastructure;
Mobile market;
Internet market.

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