Business Monitor International (BMI) issued the Central Asia Telecommunications Report for Q409. The report covers Uzbekistan, Kazakhstan, Kyrgyzstan, Tajikistan and Turkmenistan, with five-year forecasts for the mobile and fixed-line sectors, as well as market data analysis sections for the mobile, fixed-line and internet markets. The report has updated fixed-line forecasts for Kazakhstan, Kyrgyzstan, Tajikistan and Turkmenistan in addition to adding new internet and broadband data to the market data analysis sections.

The report said fixed-line penetration in the region is increasing, albeit at a slow and steady pace. Fixed-line penetration in Central Asia is below 10% in all of the countries except for Kazakhstan where penetration is now above 20%. Going forward, Companiesandmarkets.com is not anticipating dramatic increases in the region’s fixed-line subscriber bases. Although fixed-line networks are being expanded, the mobile sectors are expanding at a much faster rate and fixed-to-mobile substitution is expected to grow in prominence.

The region’s internet sectors are by far the least developed, with internet usage and broadband subscriptions being extremely low. However, the sectors do appear to be developing with Kazakhstan and Uzbekistan leading the way and even witnessing the launch of advanced services such as IPTV. Although none of the incumbents have yet been privatised there are several large foreign players in the region including Russia’s VimpelCom and South Korea’s KT Corp through East Telecom.

The broadband markets in Central Asia offer the most growth potential and as the sectors are liberalised BMI is expecting considerable amounts of investment to be ploughed in. However, until the incumbents are privatised or up their investment levels we do not anticipate dramatic improvements in the region’s broadband markets.

The privatisations of Kazakhtelecom, Tajiktelecom, Kyrgyztelecom and Uzbektelecom are all on the cards, and a good deal of interest is being shown. The potential of the broadband sector in Central Asia, coupled with a presence in high-growth mobile markets, makes the incumbents extremely attractive acquisition targets. Given the underdeveloped nature of the countries’ wireline infrastructures, alternative technologies such as WiMAX and satellite-based broadband offer huge potential in the voice and broadband markets.

The report said the mobile markets are by far the most liberalised and developed sectors in each of the Central Asian countries. The Russian operators MTS, VimpelCom and MegaFon all have significant interests across the region, competing with each other and Nordic giant TeliaSonera, along with Turkey’s Turkcell through their joint venture Fintur Holdings.

During the second quarter of 2009 BMI estimates that Kazakhstan’s mobile market penetration broke the 100% barrier becoming the first country in the region to do so. In 2010 we have forecast Kyrgyzstan’s mobile penetration to also break 100%, with Uzbekistan following in 2011 and Tajikistan in 2013.

However, in Turkmenistan, which is the least developed and most closed of the region’s markets, the report forecasted mobile penetration to reach just 67% by the end of 2013.