Uzbekistan - Telecoms, Mobile, Broadband and Forecasts

Uzbekistan - Telecoms, Mobile, Broadband and Forecasts

Banned operator MTS returns to Uzbekistan's mobile market

Coming into 2015 the big news for the Uzbekistan telecom sector was that MTS Uzbekistan, the number one ranked operator that was first suspended and then finally had its licence revoked back in 2012, had returned to again play an active role in the market. A newly formed operator referred to as Universal Mobile Systems (UMS), the former MTS was now in a joint venture with the government. There was no doubt that the return of MTS was set to improve the outlook for the local mobile and mobile broadband market. The telecom sector was certain to benefit from the increased competition coming with an experienced player using its existing network and experience. This assessment of course puts to one side the events surrounding what turned out to be a temporary exit by MTS. The reality is that a poor business environment remains in place; this has the potential to choke investment and as a result limit the growth of the telecom sector.

For many years Uzbekistan's telecom infrastructure remained outmoded and inadequate. The country has been struggling to bring its telecommunications system up to the standard found in developed markets. Over the last decade or so, the situation has been steadily improving. This has in part been due to the government's decision to give national priority to the telecom and IT sectors. The result has been a definite upward trend in the country's telecom market, with increased investment in infrastructure, expanding subscriber bases and rising revenues. The government's strategic policy was to privatise the incumbent operator Uzbektelecom and to open the market to competition.

The state-owned national telecom operator, Uzbektelecom, has been responsible for the fixed-line network and services throughout the country. It was originally granted a monopoly on international voice services and VoIP until 2007. In the meantime, it controlled around 98% of local fixed-line telephony services and 96% of international fixed-line services. Little progress had been made in the government's plans to privatise Uzbektelecom despite several attempts over the last decade to sell off a sizable stake to a foreign investor. Again, with the events of 2012/2013 causing a major setback for both the mobile market in particular and the telecom sector as a whole, it was unlikely that a good opportunity to sell a stake in Uzbektelecom would present any time soon.

While the country's internet market had enjoyed considerable growth, especially over the last decade, actual internet subscriptions have remained limited for the majority of the country's population. Fixed broadband subscriptions in particular were small in number. By 2005 internet user penetration stood at just over 4%; by early 2015 it had reached an estimated 44% user penetration. As with most developing economies, the arrival of mobile broadband in Uzbekistan has given a major boost to the local internet market. While there were only 400,000 fixed broadband subscribers in early 2015, there were more than 7 million mobile broadband subscribers by that stage. (It is noted that the various sources for statistics on internet subscribers in Uzbekistan provide limited or contradictory information.)

Key developments:

by 2012 mobile subscribers in Uzbekistan had reached over 25 million (91% penetration);
however, the cancellation of the licence of number one player MTS caused turmoil in the market;
total subscriber numbers had fallen to below 20 million by end-2013;
the period 2012/2014 proved to be a difficult one for the mobile market in particular;
MTS re-entered the market in December 2014 in a joint venture with the government;
the new mobile operator was called Universal Mobile Systems (UMS);
the general feeling was that this would give a much needed boost to the market;
fixed-line growth in Uzbekistan, although positive, has been very modest over recent years;
there was a surprise surge in fixed subscribers in 2014, with penetration increasing to 9%;
recent growth in internet usage has been considerable;
user penetration was estimated at 44% coming into 2015;
fixed broadband subscriber penetration was still below 2% in 2015;
by contrast, mobile broadband had reached an estimated penetration of 24% by end-2014;
Uzbektelecom was continuing to roll out fibre-based internet access in 2015;
the number of fibre-based broadband subscribers remained small, however;
a new ministry, the Ministry of Development of Information Technologies and Communications (MDITC), was established in February 2015;
Uzbektelecom's mobile unit UzMobile has launched a GSM/WCDMA network in Tashkent.

Companies mentioned in this report:

Uzbektelecom, Uzmobile, Buzton, Buztel, East Telecom, Uzdunrobita, MTS-Uzbekistan, Universal Mobile Systems (UMS), Beeline (Unitel), UCell (Coscom), Vimpelcom, TeliaSonera, Perfectum Mobile.

1. Executive summary
2. Key statistics
3. Country overview
3.1 Background
3.2 Economy
3.3 World Trade Organization (WTO)
3.4 Corruption
4. Telecommunications market
4.1 Overview of Uzbekistan's telecom market
5. Regulatory environment
5.1 Background
5.2 Uzbek Agency for Communications and Information (UzACI)
5.3 State Committee for Communications, Information and Telecommunication Technologies (CCITT)
5.4 Ministry of Development of Information Technologies and Communications (MDITC)
5.5 Regulatory developments
6. Fixed network operators in Uzbekistan
6.1 Uzbektelecom
6.1.1 Privatisation of Uzbektelecom
6.2 Buzton
6.3 East Telecom
7. Telecommunications infrastructure
7.1 National telecom network
7.1.1 Background
7.1.2 Statistics
7.1.3 Forecasts fixed-line subscribers 2015; 2017; 2020
7.1.4 Fibre optic cables
7.2 International communications
7.2.1 TAE cable
8. Internet market
8.1 Overview
8.2 Internet statistics
8.3 ISP market
8.3.1 Overview
8.3.2 Unitel
9. Broadband market
9.1 Overview
9.2 Broadband statistics
9.3 Forecasts fixed broadband internet subscribers 2015; 2017; 2020
9.4 WiMAX
10. Mobile communications
10.1 Overview
10.2 Background
10.3 Mobile statistics
10.4 Forecasts mobile subscribers 2015; 2017; 2020
10.5 Mobile data
10.5.1 3G
10.5.2 4G / LTE
11. Major mobile operators
11.1 MTS-Uzbekistan (formerly Uzdunrobita)
11.1.1 MTS encounters major regulatory problems
11.1.2 MTS licence cancellation and aftermath
11.1.3 Universal Mobile Systems (UMS)/ MTS Uzbekistan
11.2 Beeline (Unitel)
11.3 UCell (Coscom)
11.3.1 Overview
11.3.2 TeliaSonera's alleged bribery scandal
11.4 Uzbektelecom Mobile (UzMobile)
11.5 Other mobile operators
11.5.1 Uzmacom
11.5.2 Buztel
11.5.3 Perfectum Mobile
12. Notes on forecasting
13. Related reports
Table 1 Country statistics Uzbekistan 2015
Table 2 Telephone network statistics 2014
Table 3 Internet user statistics 2014
Table 4 Mobile statistics 2014
Table 5 National telecommunications authority
Table 6 Uzbekistan's GDP real growth rate 2006 - 2017
Table 7 Historical - Fixed lines in service, annual growth and teledensity 1991 - 2005
Table 8 Fixed lines in service, annual growth and teledensity 2006 - 2015
Table 9 Forecast fixed-line subscribers and penetration rates 2015; 2017; 2020
Table 10 Internet users and penetration 1999 - 2015
Table 11 Fixed internet subscribers 1999 - 2013
Table 12 International internet bandwidth 2001 - 2015
Table 13 Proportion of households with a computer 2002 - 2015
Table 14 Unitel fixed broadband subscribers 2011 2014
Table 15 Unitel's fixed broadband ARPU 2011 - 2015
Table 16 Fixed broadband subscribers 2003 - 2015
Table 17 Fixed broadband subscribers and household overview 2014
Table 18 DSL broadband subscribers 2003 - 2015
Table 19 FttH broadband subscribers 2010 - 2015
Table 20 Mobile broadband subscribers 2009 - 2015
Table 21 Forecasts - fixed broadband internet subscribers 2015; 2017; 2020
Table 22 Historical - Mobile subscribers, annual change and penetration 1995 - 2005
Table 23 Mobile subscribers, annual change and penetration rate 2006 - 2015
Table 24 Mobile operators, subscribers and annual change June 2012
Table 25 Mobile operators, subscribers and annual change 2013
Table 26 Mobile operators, subscribers and annual change 2014
Table 27 Mobile operators by share of total mobile market 2014
Table 28 Forecasts - mobile subscribers and penetration rates 2015; 2017; 2020
Table 29 Historical - MTS (Uzdunrobita) mobile subscribers 1998 2012
Table 30 MTS (Uzdunrobita) mobile ARPU 2005; 2011 2012
Table 31 - UMS (formerly MTS) mobile subscribers 2014 2015
Table 32 Unitel (Beeline) mobile subscribers 1998 - 2015
Table 33 Unitel (Beeline) mobile ARPU 2006 2015
Table 34 Unitel (Beeline) mobile revenue by market segment 2012 2015
Table 35 Unitel (Beeline) total capex 2012 - 2014
Table 36 UCell (Coscom) mobile subscribers 2006 2015
Table 37 UCell (Coscom) mobile revenue by market segment 2014
Chart 1 - Uzbekistans GDP real growth rate - 2006 2017
Chart 2 - Fixed lines in service and annual change 2006 - 2015
Chart 3 - Internet users and penetration - 2006 2015
Chart 4 - Fixed broadband subscribers and penetration - 2007 2015
Chart 5 - Mobile broadband subscribers and penetration - 2009 2015
Chart 6 Mobile subscribers and penetration rate 2006 - 2015
Chart 7 - Mobile operators by share of total mobile market - June 2014

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