BMI's Executive Summary

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The Sector At A Glance

Key Insights On The Telecomunications sector of Central Asia

Central Asia remains a key target for foreign investment, with the region’s telecoms markets proving to be particularly attractive to Russia’s larger mobile operators. Although penetration rates, across the region, remain very low by European standards, BMI’s latest forecast projections – which have been updated to cover the period ending 2011 – emphasise the continuing emergence of increasingly mature markets over the next few years. Our most notable forecast alterations relate to Tajikistan’s mobile market, which we believe to have been larger than our previous estimates at the end of 2006.

Investment opportunities in the region’s fixed-line sectors are limited, despite the tremendous scope that exists for expanding the quality, range and availability of fixed-line, data and internet services. In all five markets, fixed-line infrastructures and service provision remain dominated by state-controlled incumbent operators. The sale of strategic stakes in Uzbektelecom, Tajiktelecom and Kyrgyztelecom has been anticipated for some time now, although no detailed plans have been released, which would suggest imminent privatisation proceedings. Meanwhile efforts to liberalise the region’s telecoms markets continue, although progress is often slow and, at times, hindered by unhelpful intervention by state-owned regulators. Further liberalisation and the introduction of greater competition are two of the requirements for future WTO membership, which is currently being negotiated by Kazakhstan, Uzbekistan and Tajikistan. As the region’s fixed-line sectors enter the next phase of liberalisation – which will include the opening to competition of domestic long distance and international voice telephony – more opportunities for strategic investors should emerge.

Compared with the sluggish pace of change in the region’s fixed-line markets, the transformation which has affected the region’s mobile markets has been fast-paced and dramatic. All five markets have benefited to varying degrees from foreign direct investment, with Russian operators MTS, VimpelCom and MegaFon acquiring and rebranding operators across the region. Tajikistan, Uzbekistan and Kazakhstan have all seen the arrival of new mobile operators in recent months, while additional operators are expected to enter the Tajik and Kyrgyz markets in the near future. Kazakhstan remains the most developed market, with nearly 8mn subscribers at the end of 2006, compared with 2.7mn in Uzbekistan and less than 233,000 in the smallest and least developed market, Turkmenistan.

According to BMI’s recently updated Business Environment Rankings, Uzbekistan remains the market with the greatest growth potential, with a large population, and expectations of strong service growth driven by competition and rising incomes. In contrast, Turkmenistan’s mobile market is shared between just two operators, and mobile services continue to be expensive for a large proportion of the population. The affordability of services has traditionally been a problem in Tajikistan too, although the government there has been on a drive to boost competition. Tajikistan’s larger mobile operators are already offering 3G services and, in 2007, the sector is expected to see the arrival of an 11th mobile operator.

Contents

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Chapter 1 - Executive Summary

Chapter 2 - Business Environment Rankings

Table: Central Asia Business Environment Ranking

Chapter 3 - Industry Forecast Scenario

Fixed-Line

Mobile

Kazakhstan

Kyrgyzstan

Tajikistan

Turkmenistan

Uzbekistan

Table: Central Asia Telecoms Sector – Historical Data & Forecasts

Chapter 4 - Competitive Landscape

Table: Key Players: Central Asia Telecoms Sector

Fixed-Line

Mobile Overview

Kazakhstan

Table: Kazakhstan Mobile Market Q306

Kyrgyzstan

Table: Kyrgyzstan Mobile Market Q306

Tajikistan

Table: Tajikistan Mobile Market Q306

Turkmenistan

Table: Turkmenistan Mobile Market Q306

Uzbekistan

Table: Uzbekistan Mobile Market Q306

Chapter 5 - Company Profiles

Selected Profiles – Operators

Kazakhtelecom

Kyrgyztelecom

Uzbektelecom

Tajiktelecom

Chapter 6 - BMI Forecast Modelling

How we generate our industry forecasts

Telecommunications Industry

Chapter 7 - Appendix: Regional Demographic Data

Wages (ave labour force per annum), US$ PPP

Population

Household Spending Per Capita, US$

Private Consumption Per Capita, US$ PPP

Market Size, GDP, US$bn

Competitive Landscape for Europe Telecommunications Reports: Sample of Companies Ranked

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Commentary on key operators highlighting ownership structures, latest available revenue figures, market share analysis and ARPU counts. BMI forecasts for all headline macroeconomic indicators, including real GDP growth, inflation, fiscal balance, trade balance, current account and external debt. Company SWOTS Covering all leading telecommunications operators and manufacturers operating in each market, including competitive intelligence on geographic presence and competitive positioning against local companies; local market share; leading products, services and technologies; foreign direct investments, projects, merger and acquisition strategies.

Network of European Telecommunications Sources

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BMI's European Telecommunications Reports are based on an extensive network of multilateral organisations, government departments, telecommunications industry associations, chambers of commerce and company reports. Information sources include:.