Kcell

Kcell JSC is one of the mobile operators of Kazakhstan that supports the GSM, UMTS/WCDMA, LTE (4G) and LTE Advanced standards. The company serves almost half of the country's population, its subscribers are more than 8 million people. In the market, the operator operates under the Kcell and Soundbrands, the first of which is aimed at a business audience, and the second - at the B2C segment.

Services

Kcell provides mobile voice services, short message services, additional services (VAS) such as multimedia messaging, mobile content access, and data services, including Internet access. The company is represented in the market by two brands: Kcell, the target audience of which is corporate customers (including government agencies) and Nav, which is aimed at mass market subscribers. The company provides services through its extensive high-quality mobile communication network, which covers almost the entire territory of the Republic of Kazakhstan.

In the future, the company plans to continue investing in the development of its 3G/4G network to expand network coverage and provide high-quality communication services. Kcell aims to maintain high standards of service delivery in the mobile market by offering its products and services at competitive prices, expanding its range of products and services, maintaining the quality of its network and increasing the value of its brand.

History

2022: Askhat Uzbek - new CEO

In May 2022, Askhat Uzbek was appointed to the post of chief executive officer of Kcell JSC. He was also elected chairman of the board of the company. More details here.

2021

Kazakhtelecom sold a 24% stake in Kcell on the stock exchange. 9% acquired by the fund of ex-President Nursultan Nazarbayev

The main fixed-line operator of Kazakhstan, Kazakhtelecom, in October 2021 announced the sale of its 24% stake in the country's largest mobile operator Kcell. The sale took place on Kazakhstan Stock Exchange. Kazakhtelecom remains the owner of a 51% stake in Kcell. Kazakhtelecom itself is controlled by the state.

"The deal to sell a 24% stake in Kcell will attract long-term capital for the development of the Kazakhtelecom group of companies," increase its market value and profitability, create additional conditions for the investment activity of the Kazakhtelecom group of companies, and partially reduce the share of entities of the quasi-public sector in the economy and positively affect the stock market of Kazakhstan, what should be positively perceived by the market and society, "Kazakhtelecom said in a statement.

Trading in Kcell shares on Kazakhstan Stock Exchange ended at KZT1.342 ($3.15) per share. Based on such an estimate, the entire package sold was supposed to cost 42 billion tenge ($150 million).

At the same time, it became known that the Kazakh First Heartland Jusan Bank (part of the Jusan group) acquired a 9% stake in Kcell at open trading on the Kazakhstan Stock Exchange. According to the chairman of the bank's board, Aybek Kayypov, the acquisition of Kcell shares corresponds to the strategy of the Jusan financial group aimed at developing high-tech platforms.

At this time, the Jusan group is actively buying assets: recently the group acquired Kazakhstan ATF Bank, and in Russia the group acquired the rehabilitated Asia-Pacific Bank. The Jusan Group is controlled by structures associated with the first president and lifelong Leader of the Nation of Kazakhstan Nursultan Nazarbayev: Nazarbayev Foundation, Nazarbayev University and Nazarbayev Intellectual Schools. The head of the Nazarbayev Fund is the eldest daughter of ex-President of the Republic Darig Nazarbayev.

The press service of Kazakhtelecom told Interfax that the stake in Kcell acquired by First Heartland Jusan Bank was part of the stake sold by Kazakhtelecom on the stock exchange.

Appointment of Yuri Kharlamov as Chief Executive Officer

On January 3, 2021, Yuri Kharlamov took up the duties of Kcell's chief executive officer, replacing Kaspars Kukelis, who led the mobile operator for about two years. The corresponding decision was approved by the board of directors on December 18, 2020. More details here.

2020

Connection to the Sberbank payment system

On June 11, 2020, Sberbank announced the connection of all mobile operators of the Republic of Kazakhstan to its payment system. More details here.

Kazakhstan mobile operators agree to share network

In May 2020, the largest mobile operators in Kazakhstan agreed to share the network. The cooperation agreement was concluded by Kcell JSC (Soundand Kcell), KAR-Tel LLP (Beeline) and Mobile TelecomService LLP (Tele2). More details here.

2018

Kazakhtelecom buys 75% of Kcell's voting shares

On December 12, 2018, it became known that in Astana, an agreement was signed between Kazakhtelecom JSC and Telia Company and Fintur Holdings BV on the acquisition of 75% of the voting shares of Kcell JSC.

Participants of the transaction - Kazakhtelecom JSC, Telia Company and Fintur Holdings BV signed an agreement on the acquisition by Kazakhtelecom of a total 75 percent stake in the Kazakh telecommunications operator Kcell JSC. As of December 2018, as part of the transaction, Kazakhtelecom acquires a 24% stake in Kcell from Telia Company and a 51% stake in Fintur Holdings BV (a joint venture of telecommunications companies Telia Company (58.55%) and Turkcell (41.45%), respectively.

In preparation for the transaction, Kazakhtelecom conducted an investment analysis, assessment and comprehensive audit of the results of Kcell's financial and economic activities in accordance with international standards for such transactions. The decision to acquire a 75% stake in Kcell was made by the Board of Directors of Kazakhtelecom JSC and the investment strategic committee of Samruk-Қazyna JSC.

It is expected that the acquisition of a controlling stake in Kcell will positively affect the shareholder value of Kazakhtelecom JSC, as well as serve the further development of the telecommunications industry of Kazakhstan as a whole, including by expanding the range and quality of modern telecommunications services offered to the population of the republic.

author = Kuanyshbek Esekeev, Chairman of the Management Board of Kazakhtelecom JSC As of December 2018, Kazakhtelecom intends to build an integrated network in Kazakhstan that allows providing high-quality mobile and fixed-line services. This transaction has strategic significance for us, including allowing us to start implementing a number of projects through the optimization and integration of networks. We also intend to promote the development of services while maintaining the main areas of Kcell's activities and ensure the quality of service for all customers, which will give an additional impetus to the development of both Kazakhtelecom and Kcell, and increase their investment attractiveness. I would like to note that the Antimonopoly Authority has established a number of requirements and conditions in the interests of consumers and the development of the industry as a whole and we are certainly ready to comply with all the requirements of the regulator in accordance with the law.

The transaction will allow Kazakhtelecom JSC to significantly expand its presence in the mobile communication market in accordance with the long-term development strategy of the company.

In turn, as Telia President and Executive Director Johan Dennelind noted, this transaction is another important step to exit the Eurasia market and focus on the Northern and Baltic regions as part of the company's strategy. This is the sixth deal in the region since 2015.

Kazakh antimonopoly authority approves deal to acquire 75% of Kcell shares by Kazakhtelecom

The Committee on Regulation of Natural Monopolies, Protection of Competition and Consumer Rights of the Ministry of National Economy of Kazakhstan considered the request of Kazakhtelecom JSC to acquire 75% of the voting shares of mobile operator Kcell, the press service of the ministry said.

According to the conclusions of experts^[1], Kazakhtelecom JSC and Mobile Telkom-Service LLP, representing the Altel and Tele2 brands on the market, is not included in the same group of persons, since the controlling stake (50.52%) in this partnership belongs to the Swedish company. Tele2 AB Thus, considering that Kazakhtelecom JSC does not have a market share in the market for cellular services, the Antimonopoly Authority provided consent to the economic concentration consisting in the acquisition by Kazakhtelecom of 75% of the voting shares of Kcell JSC, the press release said in July 2018.

With a positive outcome of this transaction, Kazakhtelecom JSC will enter the country's mobile market. According to preliminary estimates, the company's share will be 37.5%.

Freedom Finance raises 10.5% stake in Kcell

The Russian investment company Freedom Finance has consolidated 10.5% of the shares of the largest mobile operator Kcell in Kazakhstan. This is stated in the message of Kcell, placed on the London Stock Exchange (LSE).

Judging by the quotations of Kcell shares on the LSE, the value of Freedom Finance's current package of mobile operator securities is $103 million. A representative of Freedom Finance declined to comment on the CNews purchase.

Freedom Finance provides trading services on American and European stock exchanges. The company is also engaged in brokerage and trust management of securities. Including Freedom Finance is an active participant in the stock market of Kazakhstan (in addition to LSE, Kcell shares are listed on the Kazakhstan Stock Exchange).

The main shareholder of Kcell is Swedish Telia. 24% of Kcell's shares are owned directly by the Swedes. Another 51% of the shares of the mobile operator belong to FinTur Holding, in which Telia has a 58.55% stake, Turkish Turkcell - 41.5%.

2017: Over 10 million subscribers

As of December 31, 2017, the operator's subscriber base was more than 10 million people. The company provides communication services in GSM, UMTS/WCDMA, LTE (4G), LTE Advanced standards. 4G/LTE services cover 49% of the country's population. The company also provides access to entertainment OTT services, of which more than half a million subscribers became users in 2017.

2015: Capitalization $1.6 billion

• As of May 6, 2015, according to the Kazakhstan Stock Exchange, the capitalization of Kcell JSC is $1.6 billion^[2].
• The company's revenue in 2014 reached 189.1 billion tenge ($1.03 billion), which is 0.8% higher than in 2013.
• EBITDA margin increased from 55.8% in 2013 to 56.1% in 2014. Net profit of the company for 2014 decreased by 8.1% compared to 2013 and amounted to 58.2 billion tenge ($317 million).

As of May 6, 2015, the main shareholders of the operator:

• Sonera Holding B.V. (Rotterdam, Kingdom of the Netherlands) - 24% stake,
• closed partnership Fintur Holdings B.V. (Rotterdam, Kingdom of the Netherlands) - 51% of the shares. A controlling stake (74%) in Fintur Holdings is owned by TeliaSonera.

2014: The company's management resigned after the scandal with suppliers

The largest mobile operator in Kazakhstan, Kcell, announced in September 2014 the resignation of its financial director Baurzhan Ayazbaev. The reasons for the resignation are not called, but it is known that the operator's board of directors began the search for a new financial director. Earlier, on September 30, his work at Kcell was completed by his general director, Turkish citizen Ali Agan. Agan announced his intention to leave the board of directors in mid-September 2014^[3]

The board of directors is also looking for a new CEO for the operator. Its technical director, Rikard Slunga, has been appointed acting head of Kcell.

In parallel, Kcell announced the start of an internal investigation. This happened after the Kcell board of directors discovered violations of corporate procedures committed by the company when concluding contracts with external suppliers. To conduct the investigation, the board of directors allocated additional resources, in addition, specialists in English and Kazakh law will be involved in the investigation. What kind of violations were committed in Kcell and its controlling shareholder - the Swedish-Finnish TeliaSonera - are not disclosed.

2013: Subscriber base - 11.6 million people

At the beginning of 2013, the company's subscriber base is 11.6 million people. As of June 2012, cellular communications provided by the company are available in 4979 cities and towns of Kazakhstan. The company provides cellular communications to all villages with a population of 5,000 people.

2012: Renaming to Kcell JSC

On August 27, 2012, it became known that by the decision of the General Meeting, GSM LLP (JS Em) Kazakhstan OJSC Kazakhtelecom was reorganized into a joint stock company by transforming the organizational and legal form of a limited liability partnership. Name of the Company - GSM LLP (JS Em) Kazakhstan OJSC 'Kazakhtelecom' - changed to Joint Stock Company 'Kcell'. Joint Stock Company 'Kcell' is the successor of GSM LLP (JS Em) Kazakhstan OJSC 'Kazakhtelecom'. Thus, all the rights and obligations of the reorganized GSM LLP (JS Em) Kazakhstan JSC "Kazakhtelecom" passed to the newly emerged legal entity - Kcell Joint Stock Company.

2011: Turkcell shareholder charges

At the end of March 2011, Turkish operator Turkcell initiated an investigation against GSM-Kazakhstan^[4]

Kazakhtelecom owns 49% of the shares of the Kazakh operator, 51% - FinTur holding, in which, in turn, 58.55% of the shares belong to the Swedish-Finnish TeliaSonera. Turkcell owns the rest of the papers. The investigation was launched at the request of members of the board of directors of FinTur representing Turkcell.

What exactly caused the investigation, Turkcell does not disclose, noting only that the company confirms the information about GSM-Kazakhstan distributed in the Turkish media. A little earlier, a source in the Turkish group Cukurova controlling Turkcell told Today's Zaman that TeliaSonera was suspected of withdrawing millions of dollars from the Kazakh operator.

"Every time we asked why GSM-Kazakhstan does not pay dividends, we were answered that the company has overdue debts," a source in Cukurova said. - Now we realized that the money was stolen by falsifying payments: the company paid the Swedish supplier Ericsson for services that were not provided. "

Ericsson assures that the company's headquarters has already managed to verify the allegations. "The allegations made regarding our business with GSM-Kazakhstan are more than serious, so Ericsson conducted a special internal investigation, but no facts confirming the allegations were revealed," says Sergey Skripnikov, Ericsson's director of public relations in Russia and the CIS countries. - Illegal or unethical business practices are unacceptable to us. All our employees and business partners always sign a special code of ethics, in which they commit themselves to follow all our corporate standards, including regarding the rejection of corruption. "

Allegations of corruption against the Scandinavians were a retaliatory move by Cukurova in the struggle for control of Turkcell, which the Turkish group is trying to take away TeliaSonera together with the Russian holding Altimo.

51% of Turkcell's shares belong to the "paper" structure of Turkcell Holding, 47% of whose shares are owned by TeliaSonera (in addition, 15% of Turkcell shares are owned directly by the Scandinavians), 53% by Cukurova Telecom Holding (CTH). In this structure, 49% belong to Altimo, 51% to Cukurova, which allows the Turkish group to control Turkcell. TeliaSonera and Altimo are simultaneously litigating with Cukurova regarding CTH's controlling stake.

Shortly before that, the Russians with the Scandinavians opened a new "front," demanding the resignation of Turkcell Chairman Colin Williams. Now there are two representatives from Cukurova, TeliaSonera and Altimo on the operator's board of directors, as well as one independent director - Williams. However, TeliaSonera and Altimo together demand the departure of Williams, considering him a protege of Cukurova, and the introduction of three independent directors on the board.

1998: Creation of GSM-Kazakhstan

The company "GSM-Kazakhstan" was founded in 1998, and already in February 1999 began to provide cellular services under the brand name Kcell, in September of the same year the mobile brand Nav was launched on the market.

Social responsibility

For many years, Kcell has been implementing the principles of social responsibility, building a role model of socially responsible business in Kazakhstan. Therefore, the company initiates and supports many socially significant projects. Every year it supports about 50 social programs, and the total amount of investments in the social sphere for the entire period of operation of the company at the beginning of 2013 exceeded 2 billion tenge.

Notes