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Kyrgyzstan - Telecoms, Mobile, Internet and Forecasts

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Kyrgyzstan’s telecom market striving had to reach its full potential

The telecommunications sector in Kyrgyzstan is characterised by an open market that has welcomed both foreign and domestic investors. This has been effectively done in accordance with the requirements set down by the WTO. Under the terms of the country’s accession to the WTO (which took place in 1998), full liberalisation of the telecoms market had been expected to be achieved by end-2006. According to the ITU, Kyrgyzstan had implemented full competition across all segments of its telecoms sector by 2007. Nevertheless, despite the market being ‘fully competitive’ there remains mare to be done on the regulatory front to take full advantage of the reforms now in place. There also remains a culture of poor transparency in some aspects of corporate behaviour; this needs to be addressed if the telecom market is to reach its full potential.

The telecom sector has been part of the final phase of a large scale privatisation program that has been steadily progressing in the country since 1992. The start of market reforms in 1991 saw the state telecommunications agency, Kyrgyztelecom, begin to expand and upgrade its legacy telecom network, which at the time was out-dated and poorly distributed. With the expansion of the telecoms sector, upgraded standards have been adopted. At the same time, a new regulatory authority – the National Communications Agency which later became known as the National Agency for Information Resources, Technologies and Communication - was set up to oversee the sector. At an early stage, Kyrgyztelecom was restructured as a public corporation and the government moved towards a partial sale of the operator to the private sector. Around 10% of the company quickly passed into private hands. After a series of failed attempts to sell off the government shareholding, the government is still holding almost 78% of Kyrgyztelecom.

Private operators, which actively operate in the mobile market and in the provision of internet services, have been investing in the necessary infrastructure. The two big GSM operators – Sky Mobile (Beeline) and MegaCom – have continued to dominate the market, claiming around 85% of the total mobile subscriber base between them. Since the first GSM network was launched in 1998, the number of mobile subscribers has grown rapidly from a few thousand in 1999 to around six million by early 2013. By this stage mobile penetration was around 110%. Growth in the country’s mobile market was continuing to moderate compared with the general growth in recent years. It was likely that the next few years will see annual expansions of less than 10%. With positive indications that the market will continue to steadily expand for some time yet, there is growing interest in the development of mobile broadband and data services.

As for fixed-line services, the country’s national teledensity was 9% in 2012, not much different from the figure a decade earlier. Growth in this market segment had effectively stalled by 2012. Apart from the lack of growth, there was concern over the imbalance in the market place. Teledensity was around 25% in the capital, but only 5% in the rest of the country.

Kyrgyzstan’s internet user penetration was running at 21% in 2012. Personal computers (PCs) remain unaffordable for the vast majority of the population and by 2012 there were only about 7% of households with a PC. Inevitably cybercafés have become the preferred means of accessing the internet in the country. Around 50% of all users are estimated to access the internet in this way. The workplace and educational institutions also make up a significant proportion of access points. Fixed broadband internet services, whilst a growing proportion of the market, are still small in number.

Market highlights:

Coming into 2013 mobile penetration in Kyrgyzstan was around 110%;

After very strong growth in the three years to 2008, the expansion of the country’s mobile subscriber base had eased, the annual growth rate having fallen to less than 10%;

Fixed-line penetration in Kyrgyzstan stood at 9% by end-2012, with the market expansion having completely stalled by that stage and no signs of further growth in the short term;

The conversion of the country’s fixed network from analogue was moving slowly, with an estimated 80% digital by 2011, but well up from just 37% in 2004;

Kyrgyzstan’s internet usage has undergone a healthy expansion over the last few years, with user penetration reported at about 21% coming into 2013;

Actual internet subscriptions remained generally low (around 2% penetration for fixed internet connections), with the local population making extensive use of public internet access (cybercafés, etc). (Note: On the basis of ITU figures and estimates, the ratio of internet users to subscribers was running at about 10 to 1; this is a relatively high ratio compared with other similar markets and suggests some inconsistencies in the published internet figures.)

The fixed broadband internet market was relatively small with subscriptions running at around 0.3% of the population;

According to the ITU, Kyrgyzstan has implemented full competition across all segments of its telecoms sector.Kyrgyzstan – key telecom parameters – 2012 - 2013
Category | 2012 | 2013 (e)
Fixed-line services:
Total number of subscribers | 485,000 | 490,000
Total number of subscribers | 110,000 | 135,000
Mobile services:
Total number of subscribers | 6.0 million | 6.5 million
(Source: BuddeComm, based on industry data)
This report provides an overview of the trends and developments in the telecommunications markets in Kyrgyzstan.

Subjects covered include:

Key statistics;
Market and industry overviews;
Major operators (mobile and fixed);
Regulatory environment;
Mobile market – voice and data;
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
3. Telecommunications market
3.1 Overview of Kyrgyzstan’s telecoms market
3.2 Government projects
3.3 MegaCom scandal
4. Regulatory environment
4.1 Regulatory authority
4.1.1 Kyrgyz National Communications Agency
4.2 Regulatory developments
4.2.1 SIM registration
5. Fixed network operators in Kyrgyzstan
5.1 Kyrgyztelecom
5.1.1 Privatisation of Kyrgyztelecom
5.2 Others
6. Telecommunications infrastructure
6.1 National telecom network
6.1.1 Overview
6.1.2 Fixed-line statistics
6.1.3 Forecasts – fixed-line market – 2015; 2020
6.2 International infrastructure
6.2.1 Satellites
6.2.2 Optical fibre cable systems
7. Internet market
7.1 Internet development
7.2 Internet statistics
7.3 Overview
7.4 Forecasts – internet services – 2015; 2020
7.5 ISP market
7.6 WiMAX
8. Mobile communications
8.1 Overview of Kyrgyzstan’s mobile market
8.1.1 Mobile statistics
8.1.2 Forecasts – mobile market – 2015; 2020
8.1.3 Mobile data
8.2 Major mobile operators
8.2.1 MegaCom (BiMoCom Ltd)
8.2.2 Sky Mobile (Beeline)
8.2.3 Aktel (Fonex)
8.2.4 Katel
8.2.5 KT Mobile
9. Broadcasting
9.1 Broadcasting statistics
10. Related reports
Table 1 – Country statistics Kyrgyzstan – 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 – 2012
Table 6 – National telecommunications authorities
Table 7 – Kyrgyzstan’s GDP real growth rate – 2006 - 2013
Table 8 – Fixed lines in service, annual change and teledensity – 1991 - 2013
Table 9 – Forecast fixed line subscribers and penetration rates – 2015; 2020
Table 10 – Internet users – 1998 - 2013
Table 11 – Internet subscribers – 1998 - 2013
Table 12 – Fixed broadband subscribers – 2003 - 2013
Table 13 – DSL subscribers – 2003 - 2012
Table 14 – Cable modem subscribers – 2003 - 2011
Table 15 – Fixed broadband subscribers and household overview – 2012
Table 16 – International internet bandwidth – 2006 - 2012
Table 17 – Households with internet – 2006 - 2012
Table 18 – Forecast internet subscribers and penetration rates – 2015; 2020
Table 19 – Mobile subscribers, annual change and penetration rate – 1998 - 2013
Table 20 – Mobile operators and subscribers – 2011
Table 21 – Mobile operators – market share – 2011
Table 22 – Forecast mobile subscribers and penetration rates – 2015; 2020
Table 23 – SMS sent – 2010 - 2011
Table 24 – Active mobile broadband subscribers – 2009 - 2012
Table 25 – MegaCom subscribers – 2009 - 2012
Table 26 – Sky Mobile subscribers – 2007 - 2012
Table 27 – Sky Mobile - ARPU – 2005; 2011 - 2012
Table 28 – Aktel (Fonex) subscribers – 2007 - 2011
Table 29 – Key broadcasting statistics – 2011
Table 30 – Terrestrial multichannel TV subscribers – 2005 - 2010

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