Kazakhtelecom

Kazakhtelecom JSC, the national telecom operator of Kazakhstan, provides a range of information and communication services for telephony, data transmission networks, broadband Internet access, IPTV, hosting, SIP telephony, video broadcasting. 51% of the shares of Kazakhtelecom JSC belong to the state in the person of the Samruk-Kazyna National Welfare Fund. Enter into structure of JSC Kazakhtelecom Group of companies: JSC ALTEL (100%), GSM Kazakhstan OAO Kazakhtelecom LLP (49%), JSC NURSAT (77.08%), LLC Signum (100%), VOSTOKTELEKOM LLP (100%), Kepter telecom LLP (100%), Radio Tell LLP (100%), LLC Online.kg (100%) (as of 31.03.2010). Today, Kazakhtelecom JSC Group of Companies covers all major target markets for consumers of information and communication services.

Kazakhtelecom JSC is engaged in the implementation of a number of large infrastructure projects, the modernization and digitalization of telecommunications networks, the introduction of new technologies and telephony of villages, as well as the development of broadband Internet access. The company also implements key programs to develop existing fixed-line services, primarily based on fiber-optic technologies, including providing high-speed fixed Internet access, renting and reserving channels, providing private virtual networks (IP VPN) and bundling services based on fixed access.

Performance indicators

2024: Kcell first became more expensive than Kazakhtelecom

According to the results of the first quarter of 2024, the capitalization of the cellular operator Kcell increased from 407.5 billion to 627.4 billion tenge (about $1.3 billion at the exchange rate as of August 23, 2024). Thus, Kcell for the first time became more expensive than its parent structure - Kazakhtelecom. Read more here.

2023: Revenue growth to KZT687.8 bn

According to the results of its work in 2023, Kazakhtelecom registered revenue in the amount of 687.8 billion tenge against 634.5 billion tenge a year earlier. The net profit of the largest telecom operator in Kazakhstan during this time decreased from 128 billion to 104.4 billion tenge. This is evidenced by the data disclosed in April 2024.

Revenue growth in Kazakhtelecom was associated with an increase in revenues from fixed and mobile services. EBITDA climbed 4.3% in 2023, and its profit margin against revenue was 43.3%.

source = Kazakhtelecom

According to the financial director of Kazakhtelecom Lyudmila Atamuratova, growing revenues were recorded against the background of a significant increase in capital costs associated with the implementation of such major projects as the deployment of the fifth generation communication standard and the large-scale migration of customers from outdated ADSL technology to GPON.

2023 for the group of companies turned out to be really, productive and eventful. So, we entered the active phase of the implementation of the strategic and country importance of the project - this is the deployment of the 5G network. In addition, as a socially responsible employer, for which employees, and for the Group of Companies this is more than 23 thousand people - this is the main asset, we have significantly increased the cost of personnel and the wage fund. But thanks to the conservative policy implemented and the improvement of operating activities, business processes, cost optimization, efficiency improvement, in general, we managed to end 2023 with fairly strong financial results, she said.

As of the end of 2023, Kazakhtelecom has 1.9 million broadband access subscribers, 14.5 million users of mobile services and more than 1 million points of connection to pay TV. In addition, more than 82 thousand companies in Kazakhstan are users of business solutions of Kazakhtelecom JSC. The company also provides services to more than 5 thousand schools, 3.8 thousand hospitals, 15 thousand state institutions.^[1]

2021: Revenue growth by 13% to KZT594.19 bn

Kazakhtelecom completed 2021 with revenue growth of 13% compared to 2020. In absolute terms, it amounted to 594.19 billion tenge against 527.33 billion tenge a year earlier. The telecom operator's net profit during this time rose by 49% and reached 97.42 billion tenge. The company released such data on March 16, 2022.

As noted in the published report, it was possible to achieve growing revenues through the implementation of a strategy that focuses on maintaining the company's leadership position in all market segments, as well as maximizing the use of synergies between various assets within the group, including mobile operators Mobile Telecom-Service and Kcell.

Kazakhtelecom ended the year with revenue growth of 13%

Kazakhtelecom's revenue from fixed-line services in 2021 increased to 279.56 billion tenge from 252.29 billion tenge a year earlier. The company's revenues in the mobile communication market also increased - from 324.32 billion tenge to 364.1 billion tenge. The remaining sources of earnings brought the operator about 2.9 billion tenge of revenue at the end of 2021.

During 2021, the group recognized an impairment loss on intangible assets in the amount of KZT1.96 billion, which is almost four times more than the previous year.

In 2021, Kazakhtelecom, according to its press service, began building Fixed Wireless Access (FWA) networks. It is assumed that this project will allow the operator to significantly increase its presence in the domestic telecommunications market and at the same time solve the problems of Kazakhstanis with broadband access to high-speed Internet. The first base stations of the project have already been deployed in the suburbs and in the private sector of Nur-Sultan, Almaty, Shymkent, in Akmola and Almaty regions. In 2022, the company plans to scale this project throughout the country.^[2]

History

2024

$1.6 billion was returned to the budget of Kazakhstan in a high-profile case of embezzlement from Kazakhtelecom

Assets worth $1.6 billion were returned to the budget of Kazakhstan as part of an investigation into a high-profile case of embezzlement of funds from Kazakhtelecom JSC. These funds and property belonging to Kairat Satybalda and related persons have been returned to the state since 2022, including significant amounts discovered abroad. This was announced in August 2024 by the anti-corruption service of Kazakhstan.

Among the returned assets are both financial funds and real estate, jewelry, company shares and vehicles. In particular, $661.5 million was found in foreign accounts, which were located in countries such as Austria, Liechtenstein, the UAE and Turkey. These assets were transferred to the accounts of the state as part of compensation for damage.

source = Wikipedia

Among the returned assets were also a 28.8% stake in Kazakhtelecom JSC worth ₸93,8 billion, a stake in CTS JSC worth ₸30,2 billion, as well as in four other companies worth ₸10,3 billion. In addition, property assets in Kazakhstan worth ₸158,5 billion were transferred to the state, including exclusive jewelry worth ₸105,39 billion (about $230 million).

In addition, funds in the amount of ₸36,8 billion were returned from Kazakhstan, as well as significant amounts from Austria ($82.1 million), Liechtenstein ($260.5 million), UAE ($14 million) and Turkey ($4.92 million). The total amount from the sale of securities amounted to ₸135,8 billion.

Also, 115 real estate objects were transferred to state ownership, including administrative buildings, land plots, apartments, houses and other buildings. The total area of ​ ​ buildings transferred to the state in Astana and Almaty is more than 180 thousand square meters. Previously, these facilities were rented out, bringing in multi-billion dollar revenues, which will now go to the country's budget.^[3]

Kazakhtelecom bought a stake in Phoenix Fund

On June 21, 2024, it became known that the telecommunications company Kazakhtelecom acquired a 49.98 percent stake in the Phoenix Fund Limited Partnership investment fund. There is no information on the value of the transaction as of the specified date. Read more here.

The appointment of Bagdat Mussin as the new head of Kazakhtelecom

On June 10, 2024, it was announced the appointment of Bagdat Mussin as the new head of Kazakhtelecom. He took this post a little over a month after leaving the post of Minister of Digital Development, Innovation and Aerospace Industry of the Republic of Kazakhstan. Read more here.

Kazakhtelecom and Air Astana fined for leaking Kazakhstani data

On May 6, 2024, the Ministry of Digital Development, Innovation and Aerospace Industry of the Republic of Kazakhstan reported that Kazakhtelecom and Air Astana were fined for leaking personal data of citizens. The total amount of recovery amounted to 369,200 tenge, or 76,900 rubles at the exchange rate as of the specified date. Companies were issued prescriptions for a period of one year. Read more here.

$98.6 million was seized from Nazarbayev's convicted nephew in the case of embezzlement of Kazakhtelecom funds

Law enforcement agencies of Kazakhstan seized 44.6 billion tenge ($98.6 million) from Kairat Satybaldyuly, nephew of the first president of the republic, Nursultan Nazarbayev, in the case of illegally withdrawn assets against. This was announced on February 8, 2024 by the press service of the Anti-Corruption Agency. Read more here.

2023

Susan Bank bought a 9% stake in Kazakhtelecom

On September 13, 2023, First Heartland Jusan Bank JSC (brand of Jusan Bank) announced acquisition of a 9% stake in Kazakhtelecom, one of the largest operators of the national data transmission network in Kazakhstan. The securities were bought at open trading on Kazakhstan Stock Exchange (KASE).

The official notification of Susan Bank says that 983 thousand common shares of Kazakhtelecom were acquired as part of the transaction. The price of the package is the market price developed on KASE at the time of purchase. The shares were acquired in addition to the already owned package of securities of JSC "Kcell" (mobile operator in Kazakhstan) as part of a strategy aimed at building a financial institution with a high digital component in business.

Susan Bank announces acquisition of 9% stake in Kazakhtelecom

Kazakhtelecom is a national telecom operator with an extensive customer base, a high level of service penetration, in connection with which Susan Bank considers this investment as a logical step as part of the further implementation of the retail business development strategy, the financial institution said in a statement.

The Association of Minority Shareholders (QAMS) notes that shortly before the announcement of the deal, September 11, 2023, the volume of intraday trading in Kazakhtelecom shares amounted to 32.8 billion tenge (approximately $68.6 million at the exchange rate as of October 25, 2023). The operations were carried out in three tranches at 16:27 Astana time at a price of 33,370 tenge (about $69.8) per share.

Susan Bank says it will continue to seek opportunities to leverage synergies with telecom sector companies, including those in which it is a shareholder. Earlier, Susan Bank implemented a joint project in the field of Bank-as-a-Service (OGO Bank) with Kcell JSC. In addition, the Jusan group includes Jusan Mobile JSC, a telecom operator that provides a wide range of services in the field of telecommunications and information technology. The bank also previously launched a virtual mobile operator, Susan Mobile, based on the Tele2/Altel network.^[4]

Creation of a joint company with Kazakhtelecom to lay the Trans-Caspian fiber-optic cable line

Kazakhtelecom and AzerTelecom created a joint company to lay the Trans-Caspian fiber-optic cable line. The largest telecommunications operators of Kazakhstan and Azerbaijan announced this cooperation in August 2023. Read more here.

Series production

At the end of May 2023, it became known about Kazakhtelecom's decision to engage in joint production of series with Salem social media. Within the framework of the project, a trial scenario has already been prepared. This was announced by the chairman of the board of Kazakhtelecom Kuanyshbek Esekeev during a meeting of the public council of the Samruk-Kazyna foundation.

According to him, interaction with the content producer allows the operator to increase audience loyalty. And for the second, this is the possibility of a large distribution of its content. The choice of Salem social media is due to the fact that the company is one of the major studios in the country.

Kazakhtelecom decided to engage in joint production of TV series with Salem social media

Salem social media has signed an agreement to sell 4 TV series to the domestic streaming platform TV + Kazakhstan. "Black Yard," "SME," Qarga and "Sheshe" began to exclusively appear on the platform from May 2023. The appearance of Kazakhstani content on the local streaming service will open up new opportunities for users, and for both companies it will become a profitable cooperation, Kazakhtelecom said.

On our platform, we pay special attention to Kazakhstani content. From the very beginning of the platform, we have created an online cinema "Made in KZ," where domestic projects are broadcast. In addition, last year the country's first online cinema Qazaqsha appeared in the service, the content here is broadcast entirely in the state language. We see that domestic content is very popular among Kazakhstanis, this is very pleasing, so for us this is a strategically important direction for development, "said Igor Pogrebitsky, General Director of the Retail Business Division of Kazakhtelecom JSC.

Salem social media is a Kazakh media company, the largest in Central Asia for the production and distribution of content on social networks and video hosting.^[5]

2022

Nazarbayev's nephew received 6 years in prison in the case of embezzlement of money from Kazakhtelecom

At the end of September 2022, a guilty verdict was passed against the nephew of the ex-president of the country of Kazakhstan Nurslatan Nazarbayev Kairat Satybaldyuly in the case of embezzlement of funds from the national telecom operator Kazakhtelecom JSC. Read more here.

Kazakhtelecom employees complain about salary delays

In April 2022, Қazakhtelekoma employees wrote a letter to the chairman of the company, Kuanyshbek Yesekeev, asking him to deal with salary debts. The appeal says that sales specialists of the corporate segment for the second month do not receive a variable part of the salary, which is calculated according to the Unified Motivation Program.

Why, because of someone's incorrect reporting, people who have done their job in good faith should suffer. All this leads to indignation of employees and shows discrimination against employees of mass professions in the sales direction of the corporate segment - the authors of the letter say.

In April 2022, Қazakhtelekoma employees wrote a letter to the chairman of the company, Kuanyshbek Yesekeev, asking him to deal with salary debts.

They asked Kuanyshbek Esekeev to assist in paying the debt and solve the problem by April 15, 2022, and otherwise they promise to name the size of the bonuses of top managers. Kazakhtelecom promised that all payments will be made by April 20, 2022.

In 2022, this is not the first case of public manifestation of dissatisfaction with the salary policy of Kazakhtelecom by employees. At the end of January 2022, workers at the telecommunications operator went on strike, demanding higher salaries amid rising food prices. About 100 people took part in the protest.

Then Kazakhtelecom emphasized that they allegedly timely index salaries taking into account inflation rates. It also reports one-time payments to employees that were made earlier.

To manage career growth and improve the qualifications of employees, rules for assigning categories and categories of positions have been developed, taking into account professional training, complexity, independence of the work performed, which directly affect the increase in employee salaries, Kazakhtelecom added^[6]

The court arrested Nazarbayev's nephew in the case of embezzlement in Kazakhtelecom

In mid-March 2022, the court arrested Kairat Satybaldyuly (nephew of the first president of Kazakhstan Nursultan Nazarbayev), who is accused of embezzlement of funds belonging to the country's largest telecom company Kazakhtelecom. Read more here.

2021: Sale on the exchange of a 24% stake in Kcell. 9% acquired 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 the Kazakhstan Stock Exchange. Kazakhtelecom remains the owner of 51% of Kcell. Kazakhtelecom itself is controlled by the state.

"The transaction on the sale of 24% of Kcell shares will allow attracting 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 also partially reduce the shares of subjects of the quasi-public sector in the economy and positively affect the stock market of Kazakhstan, which should be positively perceived by the market and society," - Kazakhtelecom said in a statement^[7].

Trading in Kcell shares on the Kazakhstan Stock Exchange ended at 1.342 tenge ($3.15) per share. Based on this estimate, the entire package sold was supposed to cost 42 billion tenge ($150 million).

At the same time, it became known that Kazakhstan's First Heartland Susan Bank (part of the Susan group) acquired 9% of Kcell shares at open trading on the Kazakhstan Stock Exchange. According to Aibek Kayypov, Chairman of the Bank's Board, the acquisition of Kcell shares is in line with the strategy of the financial group of companies Susan aimed at developing high-tech platforms.

At this time, the Susan group is actively buying up assets: recently the group acquired Kazakhstan's ATF Bank, and in Russia the group acquired the Asia-Pacific Bank, which has undergone reorganization. The Susan 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 Foundation is the eldest daughter of ex-president of the republic Dariga Nazarbayev.

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

2020: Connection to Sberbank's payment system

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

2019

Memorandum of Cooperation and Joint Activities with ICS Holding

"Intelligent Computer Systems" On November 28, 2019, LLC (ICS Holding) signed two strategically important memoranda of cooperation and joint activities with the Kazakhtelecom group of companies and National Infocommunication Holding JSC. "Zerde" More. here

Interception of Facebook, Google and VKontakte traffic

A week after the government of Kazakhstan began to intercept all HTTPS traffic, some details about what was happening in the country became known.

According to Censored Planet, by July 23, 2019, only 37 domains, mainly owned by popular services such as Facebook, Google, Twitter, Instagram, YouTube and Vkontakte, were decrypted and viewed by citizens. Read more here.

2018: Signing of agreement on acquisition of 75% of voting shares of "Kcell" from TeliaSonera

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

2016: Kazakhtelecom increased net profit 3.6 times in the first half of the year

In 2016, Kazakhtelecom's share in Kazakhstan's communications market was 30.5%. The subscriber base has more than 3.6 million connections, the share in the fixed telephony market is 92.7%, fixed broadband access - 74.8%, paid TV - 27.9%.

In the first half of 2016, Kazakhtelecom's net profit reached 57.2 billion tenge. Compared to the same period in 2015 (KZT15.8 billion), this figure increased 3.6 times.

The company's assets also rose. If in January-June 2015 this figure was 408.9 billion tenge, then in 2016 it reached 466.7 billion tenge - an increase of 14.1 percent.

Kazakhtelecom's equity in 2016 increased by 20.9 percent and turned out to be equal to 344.7 billion tenge, while a year earlier it amounted to 285 billion tenge.

The company explained that the growth of assets, equity and net profit this year is mainly due to the reflection of investments accounted for by the equity method in connection with the implementation of the project to form a mobile asset.

In addition, Kazakhtelecom managed to increase the income from the provision of services to 101.1 billion tenge (by 7.7 percent) - in the first half of 2015, the same indicator was equal to 93.9 billion tenge.

As for the company's expenses, for six months of 2016 (77.7 billion tenge) compared to 2015 (73.6 billion tenge) they increased by 5.5 percent.

The EBITDA indicator in the first half of this year amounted to almost 41.9 billion tenge, having increased by 7.6 percent compared to the same indicator last year (38.9 billion tenge).

2011

According to the consolidated statements, revenues from the sale of services in 2011 amounted to 173,436 million tenge ($1.168 billion), net profit - 50,484 million tenge ($340,161 million), EBITDA - 65,291 million tenge ($439,930 million). The telephone density per 100 inhabitants of the Republic of Kazakhstan was 24.05 bodies, including 31.58 in urban areas, and 15.0 in rural areas.

As a result of the work on expanding the CDMA-450 network, subscribers of South Kazakhstan, Almaty, Zhambyl, Aktobe, Kostanay and Pavlodar regions received the opportunity to connect to the Internet. By the end of 2011, the installed network capacity was 364,682 numbers. The network coverage area covers 4,596 rural settlements (504 base stations). As a result of the project implementation in 2011, 80 base stations, 11 CRRL, equipment of 21 SE satellite systems were installed, more than 7 km of fiber-optic communication lines were built. In the future, the project for the development of the CDMA-450 network for 2012-2015 provides for the expansion of the existing CDMA-450 network by 396 base stations with the connection of more than 500 thousand subscribers. For the speedy provision of wireless broadband access services throughout the Republic of Kazakhstan at a speed of up to 0.5 Mbps, it is planned to upgrade the existing CDMA network with EV-DO technology. In 2012, it is planned to connect 25,250 subscribers to it in all regions of the Republic of Kazakhstan.

In 2011, Kazakhtelecom developed an innovative development strategy for 2012-2015, within the framework of which the innovation management process is being implemented in order to ensure the most positive effect from the implemented technological and management solutions. To maximize the impact of the implementation of technologies and projects, an innovation committee was established in Kazakhtelecom in 2011. Its tasks include intensifying the company's participation in the SPFIID, considering and making decisions on the implementation of innovative projects, increasing the share of Kazakhstani content in the procurement system.

As part of measures to increase the availability of the Internet for the population, the monthly fee for the Megaline Turbo TP was reduced by 22%, for the Megaline Hit TP, without changing the monthly fee, the throughput was increased by 2-4 times for external resources and 2 times - the threshold value of traffic to external resources is increased by 2 times, the speed of access to external resources is increased after exceeding the threshold from 128 Kbps to 256 Kbps. At the same time, for subscribers who do not have the technical ability to provide Megaline Hit with the specified parameters, a reduction factor of 0.75 to the monthly fee was introduced. Also in 2011, new Megaline TPs were introduced: "Megaline Drive" and "Megaline Hit Optima." For the segment of legal entities, a twofold increase in the speed of Internet access services under Unlimited tariff plans was carried out without changing the level of the monthly fee, which is equivalent to a decrease of 39 to 72%.

Since January 1, 2012, the monthly fee for the following Megaline TPs has been reduced: for Megalie Hit TPs - by 10%; according to TP "Megaline Hit Optima" - by 5%; according to TP "Megaline Drive" - by 12.5%.

2010

December 2010 - The Standard & Poor's Corporate Governance Ratings Service announced the upgrade of Kazakhtelecom's "analysis and evaluation of the effectiveness of corporate governance, accountability and management" (GAMMA) from GAMMA-5 to GAMMA-5 + mainly due to improved board procedures. "

2009

The company employs about 30 thousand people. Kazakhtelecom JSC has regional divisions in each region of the country and provides communication services throughout the country. According to operational data, as of January 1, 2009, the company serves more than 3, 333 million fixed-line subscribers. The telephone density in the Republic of Kazakhstan averages 21.3 phones per 100 people. Kazakhtelecom JSC closely cooperates and interacts with more than 40 operators of far and near abroad.

Notes