Boston, MA -- (SBWIRE) -- 05/02/2014 -- Our continued scepticism towards the Central Asian telecoms markets continues to play out, with ongoing political risks obscuring the large potential for growth in the region. The US Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) are carrying out investigations into the investment activities of TeliaSonera and VimpelCom in Uzbekistan. This follows the Uzbek government's removal of MTS from the market amid claims of bribery and corruption. After a number of failed attempts to sell the MTS assets, the equipment was awarded to the state-owned operator Uzmobile, which has been licensed to build a GSM network to complement its existing CDMA infrastructure. TeliaSonera and VimpelCom are therefore at risk of being unceremoniously removed from Uzbekistan and other markets in Central Asia, with harsh penalties to be expected from the SEC if found to have committed acts of bribery. At the market level, the large instances of prepaid accounts does not bode well for potential investors seeking high returns, as customer migration to higher-value 3G/4G services and postpaid accounts remain a distinct challenge.
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- Mobile operators' revenue in Kyrgyzstan increased by 18.5% to KGS25.06bn (US$484.8mn) in 2013. This was despite a US$1 drop in ARPU from US$4 to US$3 during 2013,
- Turkmenistan's state-owned mobile operator Altyn-Asyr has reported that its subscriber base has passed 3.7mn in 2013. This was up from 3mn in 2012 as a result of the company's network covering almost the entire area of Turkmenistan.
- Altel's LTE subscription base has risen from 30,000 connections in April 2013, to 110,000 by the end of December 2013.
- Kazakhstan's incumbent operator Kazakhtelecom posted revenues of KZT190.7bn (US$1.2bn) in 2013, up from KZT175.8bn (US$1.1bn) in 2012. However, the operator's net profit declined from KZT20bn (US$125.86mn) in 2012 to KZT19.7bn (US$123.97mn) in 2013. Its wholly owned mobile subsidiary Altel reported a 4G LTE subscriber base of 110,000 by end-2013. Altel's network was expanded to Karaganda, Ust-Kamenogorsk, Shymkent, Aktobe, Atyrau and Aktau in December 2013, following its launch in Astana and Almaty in December 2012.
Key Trends And Developments
The US Department of Justice (DOJ) has sent a notice to Sweden-based telecoms operator TeliaSonera, informing the operator about the launch of a probe into its transactions in Uzbekistan. TeliaSonera also disclosed that the Dutch authorities have requested a collateral of EUR10mn (US$13.9mn) to EUR20mn (US$27.8mn) for any financial claims, to be decided against the operator's Netherlands based holding firms.
'The common denominator of our contacts with the authorities is that we are asked for information about TeliaSonera's investments in Uzbekistan and documents related to these,' TeliaSonera's Group Communications Head Peter Borsos said.
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