BMI View: State interference and political risk remains the most important risk of doing business in the Central Asian region. This was again amplified as government involvement became a key theme over the first six months of 2015. In Turkmenistan, a new state-owned company was created to spur competition, in Kyrgyzstan, state-owned Kyrgyz Mobile Company was sold to state-owned Mega C om and in Uzbekistan, state-owned Uzmobile launched a GSM network to better compete in the mobile market. This therefore does not appear to be a risk that is going to end in the short or long term. Kazakhstan is the most attractive of the region and its ascension to the WTO in June 2015 should lead to wide-scale privatisation of state-owned enterprises, Including in the telecoms sector. Transitions to 3G will continue to be vital across the region and though 4G is available, it will remain too expensive for mass uptake.
Altel, the mobile subsidiary of state-owned incumbent operator Kazakhtelecom, reportedly reached 2.1mn subscribers as of May 15 2015, representing annual growth of around 100%. The company expects to reach 3mn subscribers by the end of 2015, as it continues the rollout of its 2G/3G/4G network across the country. Altel is the only licensed provider of 4G in Kazakhstan, a situation which has been criticised by rival operators in the mobile sector. Altel also plans to stop providing services over CDMA technology on July 1 2015.
Kyrgyzstan's operators MegaCom, Sky Mobile (Beeline) and Nur Telecom's mobile subsidiary O! registered 67.66% (around 1.9mn), 80.25% (2.2mn) and 79.49% (1.5mn) of their respective SIM cards as of May 1, according to the National Communications Agency. All operators are required to register their SIM cards by August 8. The combined total of 5.6mn registrations to date implies that the operators now need to register around an extra 2mn SIMs by the deadline.
The State Property Fund of Kyrgyzstan has auctioned off 75% of Kyrgyzmobilecompany (KMC) for a price of KGS210mn (USD3.5mn), with the remaining 25% to be retained by the state. The cost was an increase from the initial price of KGS160mn (USD2.68mn), as two companies participated in the auction. The winning bid was submitted by existing mobile player Alfa Telecom, which operates as Megacom in Kyrgyzstan. KMC is a start-up operator which was awarded licences and spectrum to operate GSM and W-CDMA networks in the country in 2011 providing mobile connection, data transmission and M2M services.
A new closed joint-stock company has been formed Ashgabat Shaher Telefon Ulgamy (ASTU, or Ashgabat Urban Telephone Network) in accordance with a decree made by the country's president Gurbanguly Berdimuhamedov. The Ministry of Communications, holds a 30% stake in the new player, while state-owned Turkmentelecom holds 60%; the remaining 10% of shares are unknown. It is believed will only operate in the capital Ashgabat, and will increase competition in the telecommunications market
Uzmobile, the wireless subsidiary of state-owned incumbent Uzbektelecom, has commercially launched GSM and W-CDMA networks in areas of Tashkent city. The mobile operator has traditionally offered services through CDMA-450 EV-DO technology, reaching approximately 500,000 subscribers across the country and providing coverage of 85% of all settlements. The GSM network uses frequencies in the 900MHz and 1,800MHz ranges, while its W-CDMA platform will utilise 2,100MHz spectrum. Uzmobile is attempting to extend the service nationwide by the end of 2017 and is also planning on making 4G services available.
Turkmenistan launched its first telecommunications satellite, TurkmenAlem 520E, in June 2015. The Turkmenistan Ministry of Communication and the Turkmenistan National Space Agency contracted French-Italian aerospace company Thales Alenia Space in 2011 to construct the satellite and will have transmission for TV, radio broadcasting and the internet, improving the overall level of communication in the country.