Communication (Kazakhstan market)

Internet regulation in Kazakhstan

Main article: Internet regulation in Kazakhstan

Development of 5G networks in Kazakhstan

Main article: Development of 5G networks in Kazakhstan

ICT market of Kazakhstan

Main article: Kazakhstan ICT market

2024 Azerbaijan and Kazakhstan invest $50 million in a communication line along the bottom of the Caspian

Azerbaijan and Kazakhstan are investing more than $50 million in the construction of a fiber-optic communication line along the bottom of the Caspian Sea. This became known in mid-June 2024. Read more here.

2023

Telecom market of Kazakhstan for the year grew by 11% to KZT1.22 trillion

At the end of 2023, the volume of the telecommunications market in Kazakhstan reached 1.22 trillion tenge (about 0.22 trillion rubles at the exchange rate as of August 6, 2024). This is 11% more compared to 2022, when the figure was 1.11 trillion tenge. Such data are given in the materials of the Bureau of National Statistics of the Republic, which TAdviser got acquainted with in early August 2024.

The volume of local telephone services in 2023 amounted to 28.33 billion tenge (approximately 5.07 billion rubles), which is 2.8% less than the previous year. Internet services were provided by 566.76 billion tenge (101.51 billion rubles), and the increase in annual terms was recorded at around 16%. Cellular services accounted for 259.75 billion tenge (46.52 billion tenge), while other telecommunications services brought 247.34 billion tenge (44.3 billion rubles). In total, Internet access services, cellular services and other telecommunications services in 2023 accounted for about 87.7% of the total telecom market in Kazakhstan.

As of the end of 2023, there were 25.3 million cellular subscribers in the region, as well as 17.93 million cellular subscribers with Internet access. Thus, the Internet penetration rate among mobile subscribers was almost 71%. The number of users of fixed Internet is estimated at 3.06 million, fixed telephone lines - 2.68 million.

It is noted that the industry received a significant impetus in the development of mobile communications in 2011, when 3G technology was introduced in the country. In 2014, operators began to provide communication services in the standard 4G/. During LTE 2019 Kazakhstan , a pilot project was implemented to test networks 5G in cities, and. Nur-Sultan Almaty Shymkent The first test results were positive, and experts reported the readiness of the introduction of 5G technology in the country.

In 2023, residents of the republic began to use less long-distance telephone communications: the volume of this segment amounted to 16.35 billion tenge (2.93 billion rubles), which corresponds to a decrease of 15.4% compared to the previous year. The materials of the Bureau of National Statistics of Kazakhstan say that the index of the physical volume (IFD) of communication services in 2023 compared to the previous year amounted to 107.1%. At the same time, the IFD of the volume of postal and courier services is 120% (99.5% in 2022). Revenue in the corresponding segment reached approximately 73.24 billion tenge (13.12 billion rubles), which is 20% more in comparable prices than in 2022.

In Almaty, the volume of communication services provided in 2023 increased by 2.3%, to 685.84 billion tenge, in Astana - by 15.4%, to 309.79 billion tenge, in Karaganda region - by 6.6%, to 22.73 billion tenge, in Aktobe region - by 5.4%, to 17.44 billion tenge, in Kostanay region - by 10%, to 17.03 billion tenge. These are the highest rates in the country. The least communication was used in Turkestan - 8.51 billion tenge (plus 8.8% on an annualized basis), Kyzylorda - 8.21 billion tenge (plus 13.7%) and Ұlytau regions - 3.46 billion tenge (plus 54.3%).

In regional terms, Almaty residents needed the services of couriers and mail the most in 2023: they were provided by 41.32 billion tenge (plus 16.5%). This is followed by residents of Astana - 8.82 billion tenge (plus 33.4%), Karaganda - 3.03 billion tenge (plus 28.1%), East Kazakhstan - 1.96 billion tenge (plus 23.7%) of Kostanay regions - 1.87 billion tenge (plus 32.4%). Least of all courier and postal services were in demand in the regions of Zhetіsu - 716.5 million tenge (plus 32.8%), Abai - 651.8 million tenge (plus 26.4%) and Ұlytau - 104.9 million tenge (plus 2.7%).^[1]

Kazakhstan agreed to launch Starlink satellite Internet in schools and named project costs

In mid-October 2023, it became known that broadband Internet access through the global satellite system Starlink will appear in rural schools in Kazakhstan, the deployment of which is carried out by SpaceXILON MASK. The cost of connecting will be comparable to the current costs of local educational institutions for satellite Internet. Read more here.

SIM cards in Kazakhstan will be sold only after biometric verification of citizens

SIM cards in Kazakhstan will be sold only after biometric verification of citizens. The procedure does not mean collecting fingerprints, but scanning the face. This is stated in the concept of public security developed by the country's authorities. The document assumes the following innovations:

• introduction of responsibility of mobile operators for non-compliance with the rules for registration of subscriber devices;
• legal and practical settlement of the procedure for the import and sale of mobile phones, excluding the presence on the domestic market of devices with the same IMEI codes;
• introduction by telecom operators of subscriber identification by person when registering SIM-cards (by analogy with the bank verification procedure);
• improving the procedure for fixing vehicles at checkpoints at the state border, which provides for automated verification of the body number or VIN code for criminal and registration accounts.

To buy a SIM card in Kazakhstan, you will now need to go through a face scan procedure

Minister of Digital Development, Innovation and Aerospace Industry of the Republic of Kazakhstan Bagdat Mussin says there are times when hundreds of rooms are issued for one person. Then SIM cards are taken abroad, and with their help fraudsters commit crimes. To end this practice, the ministry is making the necessary changes to the regulatory documents on biometric identification.

Technically, we are ready. You see, on eGov, Kaspi and Halyk bank, biometric identification is used everywhere. After that, there will be fewer such people buying a thousand rooms. Or, if they issue these numbers for themselves, and fraudulent actions will be committed through them, then the person will answer in full. With biometric identification, there will be one hundred percent confirmation, "he said.[2]

Azerbaijan and Kazakhstan agree to stretch 330-km fiber optic under water between countries

In January 2023, the largest telecommunications companies in Azerbaijan and Kazakhstan - AzerTelecom and Kazakhtelecom, respectively - entered into an agreement on the terms of cooperation within the framework of the Trans-Caspian Project, designed to lay fiber-optic communication lines (FOCL) along the bottom of the Caspian Sea. The main route of the submarine line will run from Kazakhstan's Aktau to Azerbaijan's Siazan and will be more than 340 km.

Cable laying is a key part of the large-scale Digital Silk Way project, aimed at creating a digital telecommunications corridor between Europe and Asia. The project is of great interest to the countries of Central and South Asia, where there is a great need for Internet channels.

AzerTelecom and Kazakhtelecom agree to lay fiber-optic Internet cable along the bottom of the Caspian Sea

AzerTelecom said that the implementation of the project will allow Kazakhstan and Asian countries to improve the connectivity and reliability of the network, and Azerbaijan to transform into a regional digital hub. The passage of information flows between Asia and Europe through Azerbaijan and Kazakhstan will create new opportunities for the development of digital business in the region, the company is confident.

All Central Asian countries are interested in the speedy implementation of the project, since the availability of alternative routes plays a large role in providing guaranteed Internet access to residents of our countries, "said Bagdat Mussin, Minister of Digital Development, Innovation and Aerospace Industry of Kazakhstan.

Almat Karamanov, head of Kazakhtelecom's corporate business, added that within the framework of the project, Kazakhstan will be able to create other large infrastructure projects, such as a hyperhighway or the construction of new data centers.^[3]

2020: Kazakhstan's mobile operators agree to share network

In May 2020, the largest mobile operators Kazakhstan in agreed to share the network. The cooperation agreement was concluded by JSC "" Kcell(Activ and Kcell), LLP) Beeline and LLP. Mobile TelecomService (Tele2)

The agreement reached involves the joint construction and operation of a mobile broadband network to cover settlements with a population of 250 to 1000 people, roads of national and regional significance and railways.

The largest mobile operators in Kazakhstan agreed to share the network

Each company will independently build and manage the mobile broadband Internet network and provide other parties with the opportunity to use the network infrastructure in their coverage areas under the terms and conditions provided for by the agreement.

The volume of construction of the network infrastructure is distributed in a proportion of 35% for KaR-Tel LLP and 65% for companies included in the Kazakhtelecom group of JSC.

The agreement does not provide for joint ownership or disposal by the parties of property constituting the network infrastructure.

It is noted that the agreement is not aimed at limiting competition between the parties in the field of wholesale or retail sales and is not any kind of market sharing agreement. Each party has every right to continue its own activities in the field of wholesale and retail sales as it sees fit.

Earlier, Kcell and Beeline agreed to share 4G the network/nationwide LTE in order to "improve efficiency and significantly speed up the implementation process and provide improved service quality." However, this contract was terminated, and Kcell paid a penalty of 14.5 billion tenge. The termination of this cooperation occurred because Kazakhtelecom acquired a controlling stake (75%) in Kcell.^[4]

2018: Internet penetration compared to other countries

2018

2017

In Kazakhstan, the volume of Internet communication services increased by 10% over the year

In Kazakhstan, there has been an increase in the volume of Internet communication services. This figure grew by 10% in 2017. This is stated in a special market study. At the same time, the number of subscribers of Internetoperators in the country reached 2.6 million people. This is 11% more than in 2016.

These indicators were achieved within the framework of the implementation of the state program "Digital Kazakhstan."

a result of the measures taken under the project, in addition to the growth in labor productivity by sectors of the economy, it is planned to increase the share of e-commerce in the total retail trade to 2.6% by 2022; creation of up to 300 thousand new jobs through digitalization; increase in the share of Internet users to 82%, as well as the level of digital literacy of the population to 83%, "the^[5] says^[6]

More than half of Kazakhstan's households are connected to broadband Internet access

According to the data of the Committee on Statistics of Kazakhstan, announced at the end of 2016, more than half of households in the republic are connected to broadband access (broadband access). In the country as a whole, the Internet usage density is 84.4%.

84.4% of households in Kazakhstan use both broadband (broadband access) and mobile access to the Network. In Astana, this figure is 99%, in Almaty - 88%. Fixed broadband communication on average in the republic covers 42% (20.7% - in Almaty, 85% - in Astana). Ground fixed wireless broadband is used by 5.5% of households, satellite broadband - 1.9%, mobile broadband (including 3G, 4G/LTE) - 69.2% (in Almaty this figure is 58.6%, in Astana - 36%).

8.3% are accounted for by such types of mobile Internet connections as analog mobile phone, GSM, GPRS. In Almaty, 21.7% of households use outdated access technologies, in Astana - only 2.2%.

Almost 79% of the population uses the Internet at least once a day, 16% at least once a week and only 5% at least once a week. 98.5% of Astana's population goes online daily, in Almaty - 87.4%.

Among the factors that restrain the use of the Internet in households of the republic, the first place, according to the survey, is occupied by the absence of the need for this (82%), 8.5% of respondents indicated that the cost of the service is too high for them, 5.3% replied that the network access service is not available in rural areas and 3% of participants cited too high costs for equipment for connecting to the Internet. Interestingly, only 0.1% of respondents fear for the safety of personal data^[7] of^[8].

Investments in telecom for 5 months of 2017 amounted to $56 million

In the first 5 months of 2017, investments in the telecommunications industry in Kazakhstan amounted to about $56 million. In the national currency, the reduction was 6.4% compared to the same period last year. However, this dynamics is 6 times better than in 2016 - then the drop in the indicator was 36.4%.

Investment in the telecommunications sector continues to decline. In January-May of this year, the total amount of investments in fixed assets amounted to 18.3 billion tenge ($56.5 million at the exchange rate of the National Bank of the Republic of Kazakhstan as of July 6, 2017), or 6.4% less than it was invested in 5 months of last year, writes the national analytical portal Finprom.

In 2016, the reduction in telecom support was much greater - in 5 months of 2016, 36.4% less investment was injected into the sector than a year earlier. In total, in 2016, the volume of investments for the modernization of funds of information and communications enterprises amounted to 63.1 billion tenge (approximately $200 million), or 39.3% less than in 2015.

Investments in telecom of Kazakhstan for 5 months of 2017 amounted to 56 million US dollars

The largest reduction in 2017 in the structure of investments in telecom was recorded for foreign investments - if in January-May 2016 the amount of such injections amounted to 1 billion tenge, then this year this source of funds was not received.

Own investments for the year decreased by 755 million tenge, or 4.1%. At the same time, the inflow of borrowed funds, including loans from banks, increased more than 20 times to 482 million tenge for 5 months of 2017. The state's attention to the industry also increased slightly - in January-May 2-17, 3.3 times more budget funds were invested in telecom than a year ago, or 76 million tenge^[9].

Cancellation of state regulation of prices in telecom

Starting January 1, 2017, Kazakhstan will abolish state price regulation in the telecommunications and postal market on the recommendations of the OECD.

This decision of the government of the republic will also affect such industries as railway transport, electricity and heat power, oil products production, oil transportation, civil aviation, port activities. It is planned that the innovation will increase the efficiency of the national market: Kazakhstani entities will be on an equal footing with the entities. EEU It is noted that the ongoing reform of pricing does not mean absolute freedom. states There will be a number of tools left for an "antitrust investigation" to rule out violations related to free prices.

2016: Mobile and Internet access accounts for 63% of sales

The most popular services in the telecommunications industry of Kazakhstan are mobile communications and Internet access services, they make up 63% of all communication services. Such data are provided by the Kazakhstan Statistics Agency.

Every year the population of the republic uses less and less communication services. And if local telephone communication in this volume occupies 6.5%, then long-distance and international - 5%. Such a service as the distribution of programs through the cable infrastructure, over wireless networks and via satellite is 4.5%, and data transmission is 3.8%. 16.9% is occupied by other telecommunications services.

2014: The market volume is 6.3 billion tenge (+ 6%). Cellular - 58 %

According to iKS-Consulting, the volume of Kazakhstan's communications market in 2014 amounted to KZT6.3bn, showing growth of 6% compared to 2013. As before, the largest share fell on revenues from services provided in cellular networks - 58%.

The dynamics of income in key segments clearly demonstrates the growth points and zones of stagnation of the Kazakhstan market:

In the negative zone at the end of 2014, only fixed telephony. In general, the decrease in income from this type of services is a positive sign, meaning that Kazakhstan is "in the global trend" consisting in the active flow of voice traffic in the cellular network. This, in turn, means that cellular services are available to the widest possible user audience. Over the past two years, "mobile cannibalization" has significantly transformed - a fixed "voice" migrates not just to a mobile network, but purposefully to the mobile Internet. Thus, revenues from mobile data transmission in Kazakhstan in 2014 increased by almost 50% compared to the previous year, ensuring the growth of the entire cellular communication market. At the same time, revenues from voice services in mobile networks for the first time in the entire history of the market showed negative dynamics - minus 2% at the end of the year. The main factor in the growth of income from mobile Internet was the growth in the number of subscribers using smartphones for data transmission - according to iKS-Consulting, in 2014 their number exceeded 4.5 million, having more than doubled compared to 2013. The development of the LTE network (ALTEL) in Kazakhstan, aimed at the most demanding users for mobile data transmission speed, had a significant impact on the market.

In fixed networks, the growth rate of revenues from broadband access and data transmission is decreasing every year. In 2014, it was 10%. The reasons are obvious - the market is becoming increasingly saturated, and the prospects for an increase in the profitability of subscribers in conditions of complete "unlimited" are extremely limited. At the end of the year, the penetration of broadband access in cities (on average in the country) exceeded 50%, and in the markets of the two capitals this indicator exceeded 70%. Operators make the main bet on the growth of the number of subscribers in fiber-optic networks - potentially their ARPU is the highest due to the use of complex package offers, including services with the best quality, at premium tariffs

Against the background of other market segments, the dynamics of revenue from paid TV looks positive - 15.4% in 2014. The market growth drivers are two projects - OTAU TB from Kazteleradio JSC and ID-TV from Kazakhtelecom JSC, whose subscriber bases are growing most intensively. With the arrival in 2014 of a new team of shareholders and top managers in the ALMA-TV company, with which the history of pay TV in Kazakhstan began, competition in the segment will certainly gain new momentum. As one of the likely scenarios, iKS-Consulting sees an active regional expansion of the operator with the possible acquisition of players in local markets. At the end of the year, the penetration of pay TV in large cities (on average in the country) exceeded 60% in the republic as a whole, this indicator is at the level of 44%. The greatest growth potential remains in the satellite TV segment. In large cities dominated by cable technologies, we will talk more about the redistribution of the market and its concentration around large players of a national scale than about general growth.

The highest income growth rate in 2014 was recorded in the operator market - 16%. Moreover, if a few years ago the growth of the segment was provided by income from the lease of channels due to the active construction of networks by mobile operators, then in the past year the growth was due to almost doubled demand for wholesale Internet channels. This is natural - the avalanche-like growth of data traffic in operator networks, generated by users, requires constant expansion of trunk channels in order to ensure the proper quality of services.

The active development of the data transmission market led to the fact that in 2014 Kazakh operators faced the downside of mass "Internet," expressed in the gigantic difference between the growth rate of the volume of network traffic and the growth rate of income. Thus, according to the results of three quarters, Kcell recorded a traffic growth of 101.6% compared to the same period in 2013, Tele2 and Beeline reported similar dynamics. At the same time, operators' income from mobile Internet services in 2014 increased by an average of a third compared to the previous year. The exception was ALTEL, whose revenues from data transmission in the LTE network increased several times compared to the previous year (start effect). Obviously, the increase in network capabilities and, as a result, the increase in operator costs, an increase in the performance of subscriber devices, the growth of high-quality media content will increasingly increase the gap between the volume of traffic and the profitability of data services.

The future of telecom is data transmission, hardly anyone doubts it now. In the coming years, operators will strive to maximize market coverage with Internet access services and attract subscribers from among consumer segments, which a few years ago were assessed as unattractive. However, this is rather not a long-term strategy, but a task for 1-2 years. Looking into the future, it is important to recognize the signals sent by the market now. Fighting each other for infrastructure superiority and technological leadership, deploying networks of "new generations," operators create increasingly comfortable conditions for the successful activities of external competitors - OTT service providers. The better the Internet access services become, the more movies in HD you can watch on YouTube, the more media files are transmitted in WhatsApp, the closer to the usual quality of calls via Viber or Skype. From the consumer perspective, this situation is close to ideal. For the operator business, this is a serious threat and a vicious circle: operators invest in networks so as not to lose to direct competitors in quality, and OTT services are becoming more and more popular, generating traffic, but not providing income to telecom operators. Obviously, attempts to ban these services are futile. It is necessary to look for new economic models that take into account the decrease in the margin of operator services under the influence of OTT services and the traffic they produce as a given, models that optimize the costs of operators.

iKS-Consulting believes that in the current conditions it is necessary to radically revise the approaches to inter-operator interaction, moving from competitive strategies to partner ones. Joining forces will make it more effective to resist external competition. This applies to both infrastructure development and products. A significant reduction in capital expenditures can ensure the joint construction and use of infrastructure. This is especially true for mobile operators, each of whom has announced their readiness to deploy 4G networks. Creating a single powerful network (or at least its key areas) instead of several duplicates will provide each operator with gigantic CAPEX savings. In addition, leveling infrastructure superiority will stimulate operators to compete at the level of products, marketing and service. Infrastructure sharing requires changes to the legislation governing the communications industry, but there is no doubt that the initiative from the market players themselves in this matter is of primary importance. An example of such cooperation is the agreement signed at the end of 2014 between the Russian operators VimpelCom and MTS on the joint construction of LTE networks in 36 regions of the Russian Federation. Details of this agreement are available in public sources.

The implementation of the principles of partnership in the field of service provision is seen by iKS-Consulting in the development of joint projects between telecom operators and developers/providers of specialized services by placing open technological platforms on operators' networks. This model allows developers to have the necessary technical and software resources to create new products, while operators receive new services for their customers, provided on the basis of revenue sharing between operators and developers. The benefits are obvious to both parties: operators do not invest in development, do not attract new employees and do not create new departments. Developers (usually small companies with limited investment capabilities) receive technological support and direct access to potential consumers without enormous advertising costs. Within the framework of this model, large operators in the USA, Europe and Southeast Asia are successfully developing M2M services. It must be recognized that attempts by Kazakh operators to develop the M2M market independently, outside this model, have not yet led to significant results. Meanwhile, a similar approach is well known to mobile operators and has successfully worked out during the period of popularity of content services.

In general, iKS-Consulting believes that the idea of ​ ​ the need to transform the market paradigm should be reflected in the strategies of major market players. In attempts to expand the range of activities, operators should move away from the desire for independent and sole implementation of projects in related and non-specialized industries. On the contrary, the synergies provided by partner models should be maximized.

2009: Communication services sales growth by 8% to KZT441 bn

According to the statistics agency of the Republic of Kazakhstan, in 2009 the total volume of sales in the telecommunications market in Kazakhstan increased to 441.3 billion tenge, which is 8.3% higher than in 2008. According to the ministry, in 2009 the number of companies using the Internet was 44,046. It is worth noting that in 2005 this figure was an order of magnitude lower. The main player is the state operator JSC Kazakhtelecom.

The lack of competition in this segment affects the high price of Internet services and other types of communications. If in Kazakhstan the services of unlimited Internet amount to about 4 thousand tenge per month, then in neighboring Kyrgyzstan this amount is 2 times less. This also applies to other types of communication, such as mobile communications, long-distance and international telephony.

There are several operators in the mobile market. However, despite the rapidly growing number of cellular subscribers (in 2009 there were 1,060 subscribers per 1000 people of the population), the tariffs of these operators are incomparable with the tariffs offered to their users by mobile operators in Russia.

Notes