Executive summary
Strong growth in mobile sector continues to dominate Uzbekistan’s telecom landscape.
Uzbekistan has been struggling to bring its telecommunications system up to the standard found in developed countries. For a long time the country’s telecom infrastructure generally remained outmoded and inadequate. Nevertheless, over the last decade or so, the situation has been gradually improving. This has been largely due to the government’s decision to give national priority to Information and Communications Technologies. Consequently there has been an upward trend in the country’s telecom market, with increased investment in infrastructure, expanding subscriber bases and rising revenues. The government’s strategic policy was to privatise the incumbent operator Uzbektelecom and to open the market to competition in accordance with the country’s aim to join the World Trade Organization (WTO).
The telecom sector has been regulated by the Uzbek Agency for Communications and Information (UzACI), the successor to the Ministry of Communications. In 2005 UzACI approved a telecommunications investment program for the period 2005-2010. Among other things, the program aimed to increase the total number of fixed lines to 2.2 million and achieve 100% digitalisation of the network by 2010. The fixed line subscriber target was not achieved with subscriber numbers still languishing below 1.9 million. And only about two-thirds of the network was digital by 2007, but by March 2009 this has been lifted sharply to 89%, according to the Uzbek Agency for Communications and Information, and effectively achieved the target by end-2010. The five year program also aimed at accomplishing marked improvements in mobile telephone and internet penetration. By 2011 both these segments of the market had shown significantly gains, with the mobile market in particular having expanded rapidly over the five years. Subscriber numbers had jumped from around one million to 21 million over the plan period. Funding for the investment program was provided by loans and foreign investment, the internal resources of operators and providers, as well as from government funding.
The state-owned national telecom operator, Uzbektelecom, has been responsible for the fixed-line network and services throughout the country. It was originally granted a monopoly on international voice services and VoIP until 2007. In the meantime, it controlled around 98% of local fixed-line telephony services and 96% of international fixed-line services. Little progress had been made in the government’s plans to privatise Uzbektelecom despite several attempts over the last decade to sell off a sizable stake to a foreign investor. The only alternative fixed-line providers were Buzton and East Telecom, but they were servicing only limited numbers of subscribers.
Mobile telephony first arrived in Uzbekistan in 1992; by 2003 there were seven mobile networks offering a range of technologies and standards. All of the mobile operators were majority owned by foreign investors. Some consolidation in the mobile market took place in 2006 when Buztel was absorbed into the Vimpelcom-owned Unitel; it seemed highly likely that further consolidation would occur in the not too distant future.
While the country’s internet market had enjoyed considerable growth since 2002, internet access remained limited for the majority of the country’s population. By end-2005 internet user penetration stood at just over 4%. However, by early 2011 it had jumped to 20%. (It is noted that the various sources for statistics on internet subscribers in Uzbekistan provide limited or contradictory information.)
Major highlights:
- By early 2011 mobile penetration in Uzbekistan had moved rapidly to almost 80%, with mobile subscriber numbers having increased to over 21 million;
- After the country’s mobile subscriber base grew by a remarkable 109% in 2008, annual expansion has eased to around 25%-30%;
- Three mobile operators – MTS, Unitel and UCell – had launched 3G networks late in 2008, while a fourth, the CDMA operator UzMobile, launched a CDMA 3G equivalent in 2010;
- Fixed-line growth in Uzbekistan has been almost non-existent of late, with penetration continuing to hover around 7%;
- On the positive front, however, has been the accelerated conversion of the fixed network from analogue to digital with the 100% target close to achieved in 2010;
- The published statistics indicate substantial recent growth in internet usage, with internet user penetration reported at 20% by 2010;
- There was a surge in broadband internet subscribers in 2008, followed by further solid growth;
- despite the increased rate of expansion, broadband penetration was only around 0.3% of the population coming into 2011;
- the government in Uzbekistan continues to maintain tight controls on some aspects of internet usage.
Uzbekistan – key telecom parameters – 2010 - 2011
Category
| 2010
| 2011 (e)
|
|---|
Fixed-line services:
|
|---|
Total number of subscribers
| 1.86 million
| 1.87 million
|
Annual growth
| 0%
| 0%
|
Fixed-line penetration (population)
| 7%
| 7%
|
Internet:
|
|---|
Total number of subscribers
| 300,000
| 350,000
|
Annual growth
| 9%
| 17%
|
Internet subscriber penetration (population)
| 1.1%
| 1.3%
|
Mobile services:
|
|---|
Total number of subscribers (million)
| 21.0 million
| 26.5 million
|
Annual growth
| 28%
| 26%
|
Mobile penetration (population)
| 76%
| 88%
|
(Source: BuddeComm)
This report provides an overview of the trends and developments in the telecommunications markets in Uzbekistan. Subjects covered include:
- Key statistics;
- Market and industry overviews;
- Major operators (mobile and fixed);
- Regulatory environment;
- Infrastructure;
- Mobile market – voice and data;
- Internet market, including broadband.
