Increasing Broadband Internet Penetration
In the OIC Member Countries
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Of Kazakhtelecom’s 1,502,632 broadband lines, 750,000 are FTTH, and the remainder is
ADSL2+. The FTTH service is sold through four plans (30 Mbps, 50 Mbps, 120 Mbps, and 1
Gbps). The ADSL 2+ plan offers 8 Mbps. As the former state-owned monopoly, Kazakhtelecom
has a strong advantage built around their brand equity. The operator is considered to be quite
an advanced company, even ahead of Rostelecom in Russia; management is open minded, and
has been capable at sustaining share, and manage to replace falling voice revenues with
broadband and pay TV. The company is not being run as state company, partly because its
public shareholders are quite active.
Kazakhtelecom is undergoing a process of privatization. Initially, the carrier’s main
shareholders were the state-holding company Samruk-Kazyna Fund of National Prosperity
(sovereign wealth fund) (with a 51.0% stake), Netherlands-based private investment firm
BODAM B.V. (with 16.9%) and the Bank of New York (17.1%). The remaining shares of the
company were held on the Kazakhstan Stock Exchange (KASE). As of 2015, Kazakhtelecom’s
shareholder structure had been altered to State holding company ‘Samruk’ (51.0%), BODAM
BV (16.87%), Bank of New York (9.81%), Deran services (7.60%), and other (14.72%). In
January 2016, the Kazakh government announced that Kazakhtelecom is among 65 state-
backed firms in line for privatization over the next four years. The sale is likely to take place
via a public share offer99. However, it is still unclear whether the privatization will go through
due to bureaucratic barriers100.
Vimpelcom is the primary competitor to Kazakhtelecom in the retail fixed broadband market.
Vimpelcom owns KaRpTel, which provides service under the Beeline brand (see below).
Beeline offers only FTTH service through 30 Mbps, 50 Mbps, and 100 Mbps plans.
The third competitor in the fixed broadband market is Alma TV, a cable TV player that started
originally offering fixed broadband through the DOCSIS 3.0 standard, but is moving to FTTH
GPON offering up to 100 Mbps service. AlmaTV relies on Transtelecom for backhaul service.
While they 500,000 cable TV subscribers, their broadband customers reach approximately
42,000. Transtelecom also has ADSL subscribers in their own right, mainly concentrated along
railway lines. The remainder of the market is served by small local building companies offering
broadband service on a franchising basis.
When measuring by the Herfindahl-Hirschman Index (HHI) of industry concentration, one can
determine that the Kazakh fixed broadband market has been gradually become more
fragmented over the past three years, as a result of Kazaktelecom share loss (see table 82).
99 Telegeography. KT to be privatized. 7 Jan 2016. The original list announced in 2014 included 600 companies, of which 44
should be considered large “Blue Chip” ones.
100 Field trip interview.