Kazakhstan Telecommunications Report Q2 2016
BMI View: Our Q2 2016 update on Kazakhstan's telecommunications market presents a revised outlook forthe country's mobile and broadband subscriber sectors. We have also extended all of our forecasts throughto 2020. The revised mobile and fixed-line subscriber forecasts are based on Q4 2015 data for the threelargest mobile network operators. With penetration reaching over 146% at the end of 2015, saturation hasset in to the mobile market, with organic growth opportunities limited for companies. Going forward theemphasis will be on the promotion of 3G and 4G services. The introduction of mobile number portability(MNP) at the start of 2016 will help operator growth strategies; however, this will not contribute to totalmarket growth, as MNP involves capturing subscribers from rival players. Kazakhstan has relatively highbroadband penetration for the region, and in addition has stronger growth potential than its neighbours. Akey driver is likely to be the spread of LTE services, which were launched by Kazakhtelecom in January2013 in Almaty and Astana, and will be rolled out nationwide by 2018.Latest Updates And Industry Developments
We envisage moderate mobile subscriber growth of around 2% in 2016. This would see the marketgrow to around 26.34mn subscribers at the end of the year, equivalent to a penetration rate of almost148%. By the end of 2020 we envisage a market of around 27.9mn subscribers, equivalent to apenetration rate of almost 150%. We expect 3G subscriber numbers to increase to over 18mn in2020. This would be equivalent to 64.6% of the total mobile market.
In November 2015 it was announced that Tele2 and Altel, the third and fourth players in the Kazakhmobile market, had agreed to merge. Altel is the mobile arm of fixed incumbent Kazakhtelecom. BMIbelieves Tele2 is looking to take advantage of the uncertainty in the mobile market, as well asleverage its data leadership by reducing the costs of rolling out new networks. However, themacroeconomic conditions in the country pose a downside risk to the operation.
BMI forecasts a total of 3.56mn fixed-line subscriptions by the end of 2020, equal to penetration rateof 19.2%. Developed fixed-line infrastructure will help to entrench Kazakhstan as the region's mostsophisticated fixed broadband sector, with more than 8.2mn subscribers by 2020, equating to apenetration rate of 44.1%.
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