Kazakhstan telecoms market

Kazakhstan telecoms market

The Kazakh telecoms market has experienced significant growth since its modernisation in 1995 and is enjoying a strong start to 2013.

Legislation established in 2004 ended Kazakhtelecom's monopolisation of the market and paved the way for further development of the industry, as well as allowing for increased economic growth.

The mobile sector in particular has recorded impressive growth, with penetration rocketing to 162% at the beginning of 2013, partly due to the delay in advancing fixed-line services. Furthermore, in 2010 three GSM operators launched 3G services to enhance their mobile offerings after acquiring licenses from the government.

The Ministry of Transport Communications and Tourism (MTCT) last year confirmed preparations for the deployment of 4G LTE. The service is due to be available to customers in Almaty and Astana by 2013, with further plans to extend coverage to all regional centres by 2014, and all municipalities (which covers a population of over 50,000) by 2015. The MTCT stated that this deployment would be overseen by Kazakhtelecom.

Kazakhtelecom is the country's national incumbent and was founded in 1994. In 2012, the operator's fixed subscriber base made up roughly 93% of national fixed subscriber figures and it continues to be the largest Telco in Kazakhstan. In March 2011, the incumbent announced it would invest over KZT10 billion (approximately $66.3 million) in the expansion of its telecoms infrastructure with an expected completion date in 2016. The plans include the deployment of a large-scale FTTH network to be rolled out in the provinces of Aktobe, Atyrau and Mangystau.

Competing with Kazakhtelecom are Arna-Sprint Data Communications (Astel) and Ducat. Astel, established a year earlier than Kazakhtelecom, operates the country"s first public data transmission network, KazNet. KazNet nodes were installed in all regions of the country, and over 50 countries across the globe now have access to the network. When first rolled out, it was the most advanced commercial public network in Kazakhstan.

Ducat became Kazakhstan's first privately-held telecoms company in 1993. Formerly named Kazintel, it was the result of an agreement between operators Arna and Ratel in 1998 and the merger enabled the companies to significantly reduce costs of their network expansions. Kazintel has been operating as Ducat since 2002, and in 2009 made plans to roll out WiMAX to 36 cities covered by its licence by the end of 2012. However, it issued a statement in mid-2011 that its WiMAX network was shutting down with the explanation that "it is the intent of the company to open a new, faster, higher capacity network in the future".

Telecoms infrastructure in the country has improved rapidly over the last few years with the deployment of fibre optic cables, microwave links and satellite services. Kazakhstan has replaced virtually all of its analogue equipment with digital technology and by the end of 2011, 96% of its network was digital.

The Eastern Fibre Optic Cable Link (FOCL) was completed in 2003 and was designed to provide a high-quality network connection for 29 settlements, covering the centres of Taldykorgan, Ust, Kamenogorsk, Pavlodar, Astana, Kokshetau and Petropavlovsk.

Kazakhstan is connected internationally via the Trans Asia-Europe (TAE) fibre-optic cable which today covers 20 countries, and spans from the east coast of China to Frankfurt in Germany. In 1999, Kazakhtelecom and Siemens partnered to deploy the 1,750km section of the cable from the country's border with China and Uzbekistan. The cable was built under an agreement between the country incumbents throughout 1994-95, following a proposal by the Ministry of Posts and Communication of China in 1992.

In January 2011, Alcatel-Lucent announced the deployment of Kazakhstan's first Gigabit Passive Optical Network (GPON) for azakhtelecom in Astana, which enabled the incumbent to deliver advanced broadband services. June 2012 saw 2Day Telecom, a subsidiary of Russian operator VimpelCom, sign a deal with SES for long-term mobile backhaul, allowing the operator to increase its capacity utilisation and provide mobile services over Kazakhstan's mountainous landscape. As the largest land-locked country in the world with an abundance of rock canyons, deltas and wide stretches of deserts, connectivity is challenging to accommodate.

With this increasing demand for improved telecoms infrastructure and services, the satellite communications market in Kazakhstan has been expanding at a considerable pace.

Kazakhtelecom utilises four Intelsat satellites with earth stations in different regions. Kazazkhtelecom and a further three private companies were granted rights to use the Intelsat system by the MTCT, and Nursat, one of the three, was the first fully digital satellite to serve the entire country.