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Kazakhstan - Telecoms, Mobile, Broadband and Forecasts


Attention: There is an updated edition available for this report.

Strong mobile and internet sectors in Kazakhstan are features of a still expanding telecom market

Although growth slowed significantly in 2009, Kazakhstan has continued to experience a booming telecom market and coming into 2013 it included a mobile penetration of 170% and an impressive 49 internet users per 100 people. This healthy market has come about on the back of a growing economy (despite a few recent setbacks) and a program of positive regulatory reform within the telecom sector. Legislation adopted in 2004 largely laid the foundation for liberalisation and development of the country’s telecom industry and put an end to the monopoly enjoyed by Kazakhtelecom, the state-controlled telecom operator.

The rapid and successful development of telecommunications in the country encouraged a number of foreign companies – both service providers and suppliers - to establish a presence in this emerging market. Since 1992, international operators and manufacturers have been active in Kazakhstan in providing services and installing state-of-the-art equipment, especially as part of the country’s international telecom network. Companies such as Motorola, Lucent, Siemens, Alcatel, Nokia, Daewoo and Nortel Networks have all been active in the market. Recognising the long-term potential of this market, many foreign telecom companies have been looking to invest and form partnerships with local telecom enterprises.

By 2005 four private operators had been licensed to provide international and long-distance services in competition with the incumbent Kazakhtelecom. They were state-railway subsidiary TransTelecom, KazTransCom (a subsidiary of the national oil company), Ducat and Astel. Up to 1,500 new telecom service providers of various kinds had been licensed by 2005.

Kazakhstan has a relatively strong fixed-line penetration (27 fixed lines per 100 inhabitants by 2012), with six operators providing fixed-line telephone services to about 4.5 million subscribers. There had been long waiting lists for fixed-line telephone services over the years. Despite the opening up of the market the bulk of the country’s fixed services (93% in 2012) were being provided by Kazakhtelecom.

In the meantime, and by contrast, the country’s mobile market has been booming since 2000 (no doubt boosted to some extent by the long delays in obtaining fixed-line services). The number of mobile services had exceeded fixed-lines by 2004 and has raced on to surprisingly high levels of penetration. Demand for mobile services was so strong that in 2006 that the government went on to auction a third GSM licence (and fourth mobile operator licence), which was duly awarded to NeoTelecom, a subsidiary of Kazakhtelecom. NeoTelecom then launched its mobile service in 2007.

Of special note has been the recent healthy growth in internet activity in Kazakhstan, with the move to broadband access in particular taking place at a rapid rate. Fixed broadband subscribers as a proportion of the population had reached a healthy 6% by 2011, with the market likely to continue its current rapid expansion. (Note: It was difficult to obtain a full statistical picture of the internet market in Kazakhstan, with indicators often not being unavailable or the information was conflicting.)

Major highlights:

After a decade of particularly strong growth in Kazakhstan’s mobile market, there has been a marked slowing;

With mobile penetration over 160% in early 2013, the market was continuing to grow but was expected to start saturating in the next few years;

Broadband internet was quickly expanding on top of a general upturn in demand for internet services;

There had been a significant shift to broadband access in 2009 and by 2012 an estimated 60% of internet subscribers were using broadband (Note: there were some inconsistencies in the publicly available market statistics for internet services);

Incumbent Kazakhtelecom continues to maintain a considerable presence across the market; however, this strong presence has not stopped the development of a diversified market that offers an energetic and competitive business environment, especially in the mobile sector;

GSM Kazakhstan (K’Cell) went with an IPO in late 2012, selling off some 25% of shares in the company;

On the economic front, after Kazakhstan experienced an eight-year period in which GDP had been growing at an annual rate in excess of 8%, a major slowdown occurred in 2008/2009;

A modest but sustained recovery in the local economy was taking place in the short term; GDP growth of between 5% and 6% was estimated/expected by the IMF for 2012 and 2013.Kazakhstan – key telecom parameters – 2012 - 2013
Category | 2012 (e) | 2013 (e)
Fixed-line services:
Total number of subscribers (million) | 4.50 | 4.70
Internet:
Total number of internet subscribers (million) | 2.50 | 2.75
Mobile services:
Total number of subscribers (million) | 27.5 | 30.0
(Source: BuddeComm)

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

Subjects covered include:

Key statistics;
Market and industry overviews;
Regulatory environment;
Infrastructure;
Mobile market;
Internet market, including broadband;
Scenario forecasts for fixed-line, internet and mobile segments.


1. Executive summary
2. Key statistics
2.1 Country overview
2.1.1 Background
2.1.2 Economy
2.1.3 World Trade Organization (WTO)
3. Telecommunications market
3.1 Overview of Kazakhstan’s telecom market
4. Regulatory environment
4.1 Regulatory authority
4.2 Market liberalisation
4.3 Regulatory developments and issues
4.4 Privatisation
5. Fixed-network operators in Kazakhstan
5.1 Kazakhtelecom
5.1.1 Kazakhtelecom’s interests in the mobile market
5.2 Astel
5.3 Ducat (formerly Kazintel)
5.4 KazInformTelecom (KIT)
6. Telecommunications infrastructure
6.1 National
6.1.1 Overview
6.1.2 Forecasts – fixed-line market – 2015; 2020
6.1.3 IP-based services
6.1.4 Next Generation Network (NGN) development
6.1.5 Wireless Local Loop (WLL)
6.2 International infrastructure
6.2.1 Trans Asia-Europe (TAE)
6.2.2 Satellite networks
6.2.3 KazSat satellite series
7. Internet market
7.1 Overview
7.1.1 Internet statistics
7.1.2 Forecasts – internet services – 2015; 2020
7.1.3 Online censorship
7.1.4 E-commerce
7.1.5 E-government
7.1.6 Kazakh Network Information Centre (KazNIC)
7.1.7 Ashyk Alem Project
7.2 Broadband services
7.2.1 General
7.2.2 Broadband statistics
7.2.3 WiMAX
7.2.4 FttB
7.3 ISP market
7.3.1 Kazakhstan Online
7.3.2 Nursat
7.4 Internet Protocol TV (IPTV)
8. Mobile communications
8.1 Overview of Kazakhstan’s mobile market
8.1.1 Third GSM mobile operator licence
8.1.2 Mobile statistics
8.1.3 Forecasts – mobile market – 2015; 2020
8.2 Mobile technologies
8.2.1 Third Generation (3G)
8.2.2 Fourth Generation (4G) / Long Term Evolution (LTE)
8.2.3 Trunk Mobile Radio (TMR)
8.3 Major mobile operators
8.3.1 Altel
8.3.2 GSM-Kazakhstan (K’Cell)
8.3.3 Kar-Tel (Beeline)
8.3.4 Tele 2 Kazakhstan (formerly NeoTelecom)
9. Notes on forecasting
10. Related reports
Table 1 – Country statistics Kazakhstan – 2012
Table 2 – Telecom revenue and investment statistics – 2010
Table 3 – Telephone network statistics – 2012
Table 4 – Internet user statistics – 2012
Table 5 – Mobile statistics – September 2012
Table 6 – National telecommunications authorities
Table 7 – Kazakhstan’s GDP real growth rate – 2006 - 2013
Table 8 – Kazakhtelecom fixed lines in service – 2005 - 2012
Table 9 – Kazakhtelecom urban and rural fixed-line subscribers – June 2009
Table 10 – Kazakhtelecom – digitalisation of local network – 2007 - 2012
Table 11 – Fixed lines in service and teledensity – 1995 - 2012
Table 12 – Forecast fixed line subscribers and penetration rates – 2015; 2020
Table 13 – Internet users – 1996 - 2013
Table 14 – Internet subscribers – 1996 - 2013
Table 15 – Fixed broadband subscribers – 2003 - 2013
Table 16 – Fixed broadband subscribers and household overview – 2012
Table 17 – DSL subscribers – 2007 - 2012
Table 18 – Cable modem subscribers – 2007; 2010
Table 19 – Internet bandwidth capacity – 2001 - 2012
Table 20 – Forecast internet subscribers and penetration rates – 2015; 2020
Table 21 – Kazakhtelecom’s fixed broadband subscribers – 2009 - 2012
Table 22 – Kar-Tel’s broadband subscribers – 2008 - 2012
Table 23 – Active mobile broadband subscribers – 2010 - 2011
Table 24 – Mobile subscribers and annual change – 1996 - 2013
Table 25 – Mobile operators, subscribers and annual change – September 2012
Table 26 – Mobile operators – market share – September 2012
Table 27 – Forecast mobile subscribers and penetration rates – 2015; 2020
Table 28 – Altel’s mobile subscribers – 2009; 2012
Table 29 – K’Cell’s mobile subscribers – 2006 - 2012
Table 30 – Kar-Tel’s mobile subscribers – 2006 - 2012
Table 31 – Kar-Tel’s mobile ARPU – 2006 - 2012
Table 32 – Tele2 Kazakhstan’s mobile subscribers – 2010 - 2012
Exhibit 1 – Kazakhtelecom’s modernisation program for telecommunications – 2004 - 2007
Exhibit 2 – Construction of the National Information Highway (NIH) backbone

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