Overview of the telecommunications market in Kyrgyzstan at the end of 2015, – CIIP study


At the end of 2015, the number of mobile users in Kyrgyzstan decreased by 560 thousand, while revenue increased by 1.7% and amounted to 18,869 million soms. The growth in wired communications grew by 15% to 5.1 million, and in just two years it grew by 60%. 377 telecom operators possessing 753 licenses provide communication services.

The Public Foundation Civic Initiative of Internet Policies presents a regular report entitled “REVIEW OF THE TELECOMMUNICATIONS MARKET IN THE KYRGYZ REPUBLIC” (as of the end of 2015). In this study, the general macroeconomic situation, global and regional trends in the ICT industry are shown, and the development of mobile and fixed-line communications in Kyrgyzstan, broadband Internet access, communications infrastructure, and others is considered.

At the end of 2015, mobile penetration in Kyrgyzstan amounted to 127%, i.e. 7.1 million subscribers. The decrease in the number of subscribers in 2015 is probably due to the personification of subscribers, a decrease in the number of subscribers with more than one SIM card, with the appearance of package offers from operators.

The pattern of revenue and investment in the ICT sector has not changed significantly. More than 75% of investments in the development of ICT infrastructure accounted for mobile communications.

Thus, the mobile communications sector is still the most attractive. But the change in the nature of investments and the onset of understanding (or expectations) on the part of the Operators in favor of the development of 3G and 4G LTE mobile data transmission infrastructure, is the result of the first open auction, Radio Frequencies in the 806-862 MHz range. The starting price of the lot – the frequency band of 5 MHz was 3, 455 million US dollars. During the bidding, the cost was set at 4.32 million US dollars. According to experts, operators have acquired data bandwidth for the use of data transmission.

It is worth noting that this auction is the first and to date the only open auction held for the radio frequency spectrum of the first “digital dividend” in the CIS.

As for the data services sector, this sector shows strong growth. Revenue growth was about 15% at the end of 2015. Revenues from mobile Internet grew faster (45%) than from wired (12%). The total revenue of telecom operators from data transmission services amounted to 5,107 thousand soms.

According to the State Telecommunications Agency, the total number of data transfer service users at the end of 2015 was 4.8 million.

The intensive growth of the data transmission sector has an impact on the development of backbone communications infrastructure and increases its importance, in particular, on the construction of fiber-optic communication lines inside and outside the republic. According to the latest data, at the beginning of 2015, the total length of the route constructed by fiber optic lines in Kyrgyzstan was 8849.5 km. The increase was 19.7% or 1454.6 km. According to the stated data of the operators, in 2015 it was planned to build a fiber optic line in the regions and Bishkek with a length of about 2 thousand km. According to FOCL lines, the leaders among all operators are OJSC Kyrgyztelecom , the total length of which is 2400 km. As for the radio relay transmission lines, the total length of which in Kyrgyzstan is 21,431.18 km, active construction is not supposed. In the future, their importance will increase as additional and alternative communication channels.

According to the State Communication Agency, at the end of 2015, 377 telecommunication operators and services, owning 753 licenses, are operating in Kyrgyzstan. In the past 4 years, there has been a significant increase in the number of applications for licenses. In 2015, 335 applications were submitted, of which 250 were granted and licenses were issued for telecommunications activities subject to mandatory licensing.

According to Tattu Mambetalieva, one of the authors of this study, for the last 10 years, a large number of regulations governing activities in the industry have been developed. However, it is noteworthy that the legislative base as a whole does not meet the modern requirements of the market and the level of development of the technologies being introduced.

However, the most significant problem for the development of the industry in the Kyrgyz Republic is the lack of qualified specialists. Personnel insecurity in the industry led to the fact that the growth of wages in the field of information technology significantly exceeded the growth of labor productivity and he was partially satisfied by attracting specialists from related industries and training at the expense of employers.

This study was prepared on the basis of open sources published by commercial and public companies in the ICT sector, annual and quarterly reports of government agencies, in particular the State Agency of Communication of the Kyrgyz Republic, and specialized private research in the ICT sector of Kyrgyzstan.

Download the full report here: Overview of the telecommunications market in the Kyrgyz Republic

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