Increasing Broadband Internet Penetration
In the OIC Member Countries
145
Table 82: Kazakhstan: Fixed broadband Herfindahl-Hirschman Index (by number of
subscribers) (2013-2015)
2013 2014 2015
Lines
Share
(%) Lines
Share
(%) Lines
Share
(%) Kazakhtelecom 1,467,520 74.9 1,543,138 71.8 1,502,632 72.7
Vimpelcom - - - - - - - - - - - - 320,000 15.5
Transtelecom - - - - - - - - - - - - 70,000 3.4
Alma TV - - - - - - - - - - - - 42,000 2.0
Others (Astek, Kazinform Telecom, ,
Katzteleport, Ducat and Asiabell) - - - - - - - - - - - - 358,000 6.3
TOTAL 1,958,823 100 2,148,000 100 2,066,894 100
HHI 5,359 (*)
(*) Estimated based on equal shares of “other players”
Source: Kazaktelecom Annual reports; Telecom Advisory Services analysisOn the other hand, the Kazakh mobile broadband market currently includes three players (see
table 83).
Table 83: Kazakhstan: Mobile broadband market structure (4Q2016)
Number of
Subscribers
Market Share
(by Subscribers) (%) ALTEL/Tele2 944,018 23
Beeline (VimpelCom) 1,641,768 40
Kcell (Fintur) 1,518,635 37
Total 4,104,421 100
Source: GSMA Intelligence; Telegeography; Telecom Advisory Services analysisThe mobile broadband market in Kazakhstan has significantly changed over the past two
years. Originally, the market was structured around four players, including the subsidiaries of
Kazakhtelecom, Vimpelcom, Tele2, and K-Cell (a joint venture of Turkcell and TeliaSonera). In
September 2015, TeliaSonera declared that it would exit all countries in its Eurasia division,
which included Kazakhstan 101. The strategic decision followed a troubled period in which the
group was affected by investigations into corruption allegations in Eurasian markets,
exacerbated by tough macroeconomic conditions and price competition across the Eurasia
footprint. Following the announcement, Turkcell, TeliaSonera’s partner in the joint venture,
submitted an offer in March, 2016 to acquire the remaining shares of the venture: 59%102.
In parallel, Tele2 and Altel announced plans to combine their mobile operations, thereby
reducing the number of mobile broadband players in the market from four to three. Tele2
Kazakhstan was the country’s third mobile broadband provider, while Altel was the smallest
carrier. According to the transaction, both operating entities owned via a joint venture holding
company incorporated in the Netherlands. Tele2 Group and Kazakhtelecom have, respectively,
51% and 49% of the voting rights and a 49% and 51% economic interest in the venture, with
Sweden-based Tele2 Group retaining management control. As part of the transaction, Tele2
Group will purchase Asianet’s existing 49% stake in Tele2 Kazakhstan for an upfront
consideration of USD15 million and a future earn out equivalent to an 18% economic interest
101 Telegeography. TeliaSonera decides to exit Eurasia countries. 17 Sep 2015
102 Tomas, J.P. “Turkcell submits offer to acquire TeliaSonera stake in Fintur”. RCR Wireless News. March 3, 2016.