International telecoms are eager to expand their presence in Central Asia, their hopes buoyed by low, but growing penetration rates and the absence of a quality fixed line infrastructure. Researchers, meanwhile, are finding that mobile phones are preferred over the Internet as a means for receiving information.
Global telecommunications companies are spurred on in Central Asia by the success of mobile phone penetration in Russia, where the latest figures indicate there are now 106 mobile phones for every 100 citizens. Telecoms research analysts now describe Central Asia as an "obvious opportunity."
An annual review by OFCOM, the British regulatory body, characterized China and Russia as powerhouses in the global telecoms sector, both in terms of money and also technological advances.
Some analysts believe Central Asia is poised to follow the Russian model of mobile phone development. "The mobile market in Central Asia is getting quite competitive, while the fixed market is still bugged by slow liberalization and the lack of modern infrastructure," said Bakhyt Weeks, an analyst with the telecoms advisory company, Pyramid Research.
"The situation in the fixed markets [in Central Asia] is quite similar to that in Russia, if not worse," Weeks continued. "The incumbents still control all of the local telephone markets; some competition exists in the long-distance and international [spheres]. The development of broadband is held back by the low fixed-line penetration and low digitalization. Additionally, the lack of competition due to the absence of the local loop unbundling (LLU), keeps the prices high, preventing better adoption."
This environment creates ample opportunity for mobile providers to expand their positions in Central Asia. Already, greater competition and cheaper services has resulted in an "explosion in mobile phone usage" said Weeks.
"Kazakhstan's mobile penetration grew from around 42 percent to almost 69 percent in 2007. Uzbekistan's penetration doubled from 10 percent to 20 percent in 2007.
Editor's note:
Deirdre Tynan is a freelance journalist who specializes in Central Asian affairs.
