Increasing Broadband Internet Penetration
In the OIC Member Countries
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On the other hand, 45% of the Kazakh population resides in rural environments90. Along those
lines, it could be assumed that Internet content relevance might represent one of the most
important barriers to broadband adoption. As a confirmation of the rural driven digital divide,
fixed broadband penetration in urban areas is 42% of households, while in rural area it
remains 13% of households.
V.3.2. Supply of Broadband Services
Availability of fixed and mobile broadband infrastructureFour facilities-based operators provide fixed broadband services to retail customers.
Kazakhtelecom, the fixed broadband incumbent, offers ADSL 2+ service to 70% of the
population, as well as fiber optic GPON access to 35% of the population91. In addition, the
carrier has deployed a national CDMA 450 EV-DO network to serve rural areas. The density in
rural areas being extremely low, it cannot render the economics of a fixed wireline network
profitable. Even under a fixed wireless network, the carrier incurs losses in serving rural
areas92. This is why Kazakhstelecom is compensated for losses generated in serving rural areas
with funding originated from the 1% of revenue contribution for universal service93. The
carrier considers that, given the cost of serving extremely low-density areas, the subsidy does
not fully compensate for the losses. This affects the spending on base station deployment,
ultimately eroding quality of service94. The carrier is involved in the Digital Kazakhstan 2020 plan for the deployment of fiber optic infrastructure to public buildings in rural areas. Villages
and towns with over 250 inhabitants will be connected to Kazakhtelecom’s fiber network. The
project is led in partnership with Kazakhstan’s Ministry of Investment and Development95 (see
details in section of major initiatives below).
In competition to Kazakhtelecom, Vimpelcom offers FTTB 100 Mbps service. The network now
passes 1.2 million homes in 25 cities, among which it counts the cities of Almaty, Astana,
Dzhezkazgan, Karaganda and Oskemen. The third competitor in the fixed broadband market is
Alma TV, a cable TV player that offers FTTH GPON offering up to 100 Mbps service. Finally,
Transtelecom, an operator partly owned by the national railway, Kazakhstan Temir Zholi
(KTZ), offers ADSL service to users located along railway lines.
In addition to the offerings in the retail market, several carriers offer broadband to business
customers. Transtelecom also operates a 13,000 km. fiber network along its right of way96.
Katzteleport, a subsidiary of the Kazakhstan banking group Halyk Bank offers services to
business customers. Ducat and AsiaBell offer WiMAX fixed wireless service in 36 major cities.
90 Source: Agency of Statistics of the Republic of Kazakhstan.
91 Source: Kazakhtelecom Corporate Strategy presentation, 2016 and field trip interviews.
92 Field trip interviews.
93 The carrier submits a report on financial losses incurred in serving rural geographies and the Universal Fund provides a
subsidy.
94 Download speed in rural areas served with CDMA 450 could reach 128 Kbps (source: field trip interview).
95 Telegeography. Kazakhtelecom plans rural fibre rollout. 26 Nov 2014
96 Telegeography. Transtelecom upg ades Kazakh backbone. 16 Dec 2015