Recently released market study: Kazakhstan and Central Asia Telecommunications Report Q3 2013


New Fixed Networks market report from Business Monitor International: "Kazakhstan and Central Asia Telecommunications Report Q3 2013"


[USPRwire, Thu Aug 08 2013] While potential remains across a number of the markets in Central Asia, events in Uzbekistan highlight the significant downside risks that persist in the region, ultimately stunting investment. High levels of political risk have forced MTS out of Uzbekistan, and, with bribery claims surrounding TeliaSonera's acquisition of a 3G licence, the operator is rumoured to be exiting the region. Government intervention in Central Asia is pervading, with many operators owned by the state and a lack of independent regulators and transparency. With the opportunity for a new player to enter the Uzbekistan market, it will be interesting to follow whether operators are willing to take on such risk exposure. Many segments remain underserved but growth of wireless data demand has driven investment in network infrastructure. It is unlikely that fixed-line voice and fixed internet will see similar investment over our forecast period.

Full Report Details at
- http://www.fastmr.com/prod/640281_kazakhstan_and_central_asia_telecommunications.aspx?afid=302

Key Data:

* Results from the National Communications Agency show that the Kyrgyzstan fixed-line sector declined by 2.8% y-o-y, from 502,000 to 488,000 in 2012. This marks the first year of decline for the country, as lack of investment and mobile substitution take their toll.
* LTE subscribers for Kazakhtelecom reached 30,000 in the first three months of operation following the launch of the service in January 2013.

Key Trends And Developments

In April 2013, Kazakhstani national telecoms operator Kazakhtelecom announced the 100% acquisition of Digital TV, a pay-TV and cable operator, previously owned by holding company Alem Communications. This move follows Kazakhtelecom's acquisition of operator MaxCom in March 2013, both for undisclosed figures. BMI believes Kazakhstan favours a strategy of consolidation in the broadband, fixed-line and pay-TV sectors, as it looks to capitalise on a growing demand for data and strengthen its dominant position.

In May 2013, Kazakhtelecom completed work on its fibre-optic network connection with Turkmenistan national operator Turkmentelecom. This will allow Kazakhtelecom to connect with Turkmen, Afghan and Iranian networks, while providing Turkmentelecom with connectivity to Europe and South East Asia.

The assets belonging to MTS' bankrupt Uzbekistan subsidiary are to be put up for auction on July 1 2013, according to the Uzbek real estate exchange. The starting price for the sale is USZ600bn (US$286.9mn), and interested parties must submit a deposit of 20% of this figure in order to participate in the sale. Although Uzbekistan contains plenty of upside potential for growth, TeliaSonera is also accused of bribing Uzbekistan officials, forcing the CEO to step down and is now considering exiting Central Asia. BMI cautions that the business environment risks are too overwhelming for the country to be an attractive expansion location.

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