Kyrgyzstan Communication Profile 2012

24/10/2010  The telecommunications sector has been part of the final phase of a program of mass privatization that has grown steadily in the country since 1992. Telecommunications in Kyrgyzstan is characterized by an open market that has welcomed foreign and domestic investors. This was actually done in accordance with the requirements set by the WTO. Under the country's accession to the WTO (which took place in 1998), full liberalization of the telecommunications market that had been scheduled to be completed by end-2006. According to ITU, Kyrgyzstan has introduced full competition in all segments of its telecommunications sector by 2007.

The beginning of market reforms in 1991 saw the agency's public telecommunications, Kyrgyztelecom begin to expand and upgrade its existing telecommunications network, which at the time was outdated and poorly distributed. With the expansion of the telecommunications sector, enhanced standards were adopted. At the same time, a new regulator - the National Communications Agency, which later became known as the National Agency for Information Resources, Technologies and Communication - was established to oversee the sector. At an early stage, Kyrgyztelecom has been restructured into a public company and the government moved towards a partial sale of the private sector operator. About 10% of the company soon passed into private hands. In mid-2010 after a series of unsuccessful attempts to sell the government's involvement, the government was still nearly 78% of Kyrgyztelecom.
Private operators, who actively operate in the mobile market and in the provision of Internet services, has invested heavily in the infrastructure concerned. Although there are four mobile networks in operation, the two big GSM operators - Bitel and MegaCom - have dominated the market, claiming between 86% of total mobile subscribers in March 2009. Since the first GSM network was launched in 1998, the number of mobile subscribers has grown rapidly from a few thousand in 1999 to about 4.3 million in early 2010. By this stage, it was en route to a 100% penetration (probably achieve this in early 2011). Growth in the mobile market in the country in 2010 continued to slow compared to the overall growth in recent years. It is likely that the year will see an expansion of less than 20%. Nevertheless, there were positive indications that the market will continue to expand steadily for some time.

Market Overview:

•  On the other hand, the real Internet subscriptions has remained relatively low in Kyrgyzstan (less than 1% penetration), with local heavy use of public Internet access (Internet cafes, etc.).
• Fixed a broadband Internet access was virtually nonexistent with subscriptions running at about 0.1% of the population;
• According to the ITU, Kyrgyzstan has introduced full competition in all segments of its telecommunications sector.
  In early 2010, mobile penetration in Kyrgyzstan was about 85%;
• After a very strong growth in the three years until 2008, the country's staple of mobile subscribers was still expanding at an annual rate of 26% in 2009 and 2010;
• Penetration of fixed lines in Kyrgyzstan was 9% in early 2010, but the annual growth rate for fixed lines was almost nil,
• The conversion of the fixed network in the country from analogue moved slowly, with an estimated 70% digital by 2009, but against only 37% in 2004;
• Internet Use * Kyrgyzstan has experienced a healthy expansion in recent years, with a user penetration was reported at about 40% coming into 2010,

Telecoms, Mobile & Internet
The telecommunications market in Kyrgyzstan has been opened up to both foreign and domestic investors in accordance with requirements set down by the WTO. Under the terms of the WTO accession, full liberalisation of the telecoms market had been expected to be achieved by end-2006. According to the ITU, Kyrgyzstan had implemented full competition across all segments of its telecoms sector by 2007. The telecom sector has been part of the final phase of a large scale privatisation program that has been underway in the country since 1992. Since the start of market reforms in 1991, the state telecommunications agency, Kyrgyztelecom has been expanding and upgrading its legacy telecom network, which was outdated and poorly distributed. With moderate expansion of the telecoms sector, upgraded standards have been adopted and a new regulatory authority instituted to oversee the sector. Kyrgyztelecom was restructured as a public corporation in 1997 and the government has been working towards a partial sale to the private sector. Around 10% of the company quickly passed into private hands. By end-2008 the government was still holding almost 78% of Kyrgyztelecom. Private operators, which actively operate in the mobile market and in the provision of Internet services, have been investing heavily in the relevant infrastructure. With four mobile networks in operation, the two big GSM operators - Bitel and MegaCom - have been dominating the market, between them claiming 86% of the total mobile subscriber base by March 2009. Since the first GSM network was launched in 1998, the number of mobile subscribers has grown rapidly from a few thousand in 1999 to around 3.7 million in early 2009. The number of mobile subscribers having jumped by a remarkable 127% in 2007, the growth eased somewhat in 2008 to deliver an annual rate of 66% for that year. Into 2009, growth in the country's mobile market continued to moderate as the penetration approached 70%.