Mobile broadband slowly gains momentum in Turkmenistan in a struggling fixed line market

Slow growth in telecom services in Turkmenistan, a predominantly rural country and former Soviet republic, can be attributed to a large extent to the slow development of the private sector and state control over most economic activities.

Turkmen Telecom has been the primary provider of telecommunication services, and through a subsidiary, TM-Cell, it has been operating a GSM mobile network in competition with a private mobile operator, MTS Turkmenistan.

In 2019 Russia-based Mobile TeleSystems (MTS) is said to have begun the process of dismantling its equipment in Turkmenistan with a view to fully withdrawing from the country, leaving the country with only one public mobile operator left, and no private national or international operator.

Turkmenistan’s mobile market has experienced extraordinarily strong growth over 2007 to 2012 period. Over the 2013 to 2019 the mobile market increased at a much slower pace, as the market has moved closer to a saturation phase there has been an inevitable slowing in the growth rate. Also, TM-Cell’s monopoly since MTS licence has been revoked in 2017, does not create an optimal situation for strong growth. Slow growth is predicted over the next five years to 2024. The market will be constrained from higher growth due to a further maturing market and the potential lack of investment and competition.

Turkmenistan has experienced a number of problems relating to communications technology. Despite efforts to upgrade the country’s telecom infrastructure, the telephone network remained poorly developed and many villages have been left without telephone services. Fixed line penetration over the past four years has been increasing slowly from a relatively small base.

Fixed broadband penetration in Turkmenistan remains limited in scale and nature and extremely low mainly due to a limited number of fixed lines as well as the dominance of the mobile platform. Over the next five years to 2024 growth is expected to continue but overall market penetration will remain extremely low.

Turkmenistan has seen a strong increase in mobile broadband penetration over the past four years however the mobile broadband market is still at an early stage of development and penetration remains relatively low compared to other Asian nations. Strong growth is predicted over the next five years to 2024.

BuddeComm notes that the outbreak of the Coronavirus in 2020 is having a significant impact on production and supply chains globally. During the coming year the telecoms sector to various degrees is likely to experience a downturn in mobile device production, while it may also be difficult for network operators to manage workflows when maintaining and upgrading existing infrastructure. Overall progress towards 5G may be postponed or slowed down in some countries.

On the consumer side, spending on telecoms services and devices is under pressure from the financial effect of large-scale job losses and the consequent restriction on disposable incomes. However, the crucial nature of telecom services, both for general communication as well as a tool for home-working, will offset such pressures. In many markets the net effect should be a steady though reduced increased in subscriber growth.

Although it is challenging to predict and interpret the long-term impacts of the crisis as it develops, these have been acknowledged in the industry forecasts contained in this report.

The report also covers the responses of the telecom operators as well as government agencies and regulators as they react to the crisis to ensure that citizens can continue to make optimum use of telecom services. This can be reflected in subsidy schemes and the promotion of tele-health and tele-education, among other solutions.

Key developments:

• Mobile TeleSystems (MTS) is said to have begun the process of dismantling its equipment in Turkmenistan
• Fixed broadband penetration in Turkmenistan remains limited in scale and nature and extremely low.
• The Turkmenistan President ordered the Turkmenistan Academy of Sciences to design the state programme 'Digital Turkmenistan'.
• Turkmenistan launched the Biz Byarde (We Are Here) social network.
• Turkmenistan has seen a strong increase in mobile broadband penetration over the past four years.
• Report update includes an assessment of the global impact of COVID-19 on the telecoms sector.