Executive summary
Uzbekistan’s mobile market optimistic but problems remainComing into 2016 the Uzbekistan telecom sector was looking to make a fresh start after the difficulties of the 2012/2014 period. MTS Uzbekistan, the number one ranked operator that had its licence revoked back in 2012, had re-entered the market and was already playing an active role again. Operating as Universal Mobile Systems (UMS), the former MTS was now in a joint venture with the government. There was no doubt that the return of MTS was improving the outlook for the local mobile and mobile broadband market. The telecom sector was already benefiting from the increased competition coming with an experienced player using its existing network and knowledge. Meanwhile, in another move that could boost the market, Uzbektelecom’s mobile unit Uzmobile had launched a GSM service to add to its existing CDMA network; the reinvigorated player was threatening to be a bigger presence in the market as a result.
By early 2016 there were almost 24 million mobile subscribers. This represented a penetration of 80%, still a relatively low penetration by general standards applicable to the developing markets across the region. Despite the positive signs for growth, however, the reality is that a poor business environment remains in place; this has the potential to choke investment and as a result limit the growth of the telecom sector.
While the Uzbekistan’s internet market has certainly been growing, especially over the last decade, actual internet subscriptions have remained limited for the majority of the country’s population. Fixed broadband subscriptions in particular were small in number. By early 2016 internet user penetration had reached an estimated 48%. This was well up from the 2005 figure, when internet user penetration stood at just over 4%. It should be noted that internet subscriptions are relatively small compared to the number of users. While there were only 800,000 fixed broadband subscribers by the start of 2016, there were more than 16 million mobile broadband subscribers by that stage. (It is noted that the various sources for statistics on internet subscribers in Uzbekistan provide limited or contradictory information.)
In the meantime, the corruption scandal surrounding TeliaSonera and Vimpelcom was still being played out coming into 2016. Vimpelcom had made some concessions and the overall situation was looking closer to resolution by that stage. TeliaSonera has indicated its intention to exit the partnership with Vimpelcom and looking to sell its 33% stake in the business.
Key developments:
by 2012 mobile subscribers in Uzbekistan had reached over 25 million;
however, the cancellation of the licence of number one player MTS caused turmoil in the market;
total subscriber numbers fell to below 20 million before recovering to 23 million by end-2015;
MTS re-entered the mobile market in December 2014 in joint venture with the government; the new operator was called Universal Mobile Systems (UMS);
Uzbektelecom’s subsidiary, Uzmobile, launched GSM/W-CDMA services adding to its CDMA network;
the general feeling in the industry was that the return of MTS and the revamped Uzmobile would give a much needed boost to the market;
fixed-line growth in Uzbekistan saw a surprise surge in fixed subscribers in 2014/2015, with penetration jumping to 9%;
internet usage growth has been considerable, with user penetration estimated at 48% by end-2015;
fixed broadband subscriber penetration was still below 3% coming into 2016;
by contrast, mobile broadband had reached an estimated penetration of 54% by the same stage;
Uzbektelecom was continuing to roll out fibre-based internet access in 2015;
the number of fibre-based broadband subscribers remained relatively small, however;
a new ministry, the Ministry of Development of Information Technologies and Communications (MDITC), was established in 2015;
Uzbektelecom’s mobile unit UzMobile has launched a GSM/WCDMA network;
a scandal disrupting the local telecom market has seen accusations of bribery against TeliaSonera, UCell’s parent; Vimplecom had also been implicated given its corporate links with TeliaSonera;
in October 2015 Telenor said it was looking to sell its 33% stake in its business with Vimpelcom;
in February 2016 VimpelCom admitted to paying substantial bribes in order to win deals in Uzbekistan’s telecom sector; TeliaSonera was still being investigated by prosecutors;
a cabinet decree in February 2016 approved the formation of 89 joint stock companies in which stakes of at least 15% were to be sold to foreign investors. The companies listed included Uzbektelecom.Companies mentioned in this report:
Uzbektelecom, Uzmobile, Buzton, Buztel, East Telecom, Uzdunrobita, MTS-Uzbekistan, Universal Mobile Systems (UMS), Beeline (Unitel), UCell (Coscom), Vimpelcom, TeliaSonera, Perfectum Mobile.
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1. Executive summary
2. Key statistics
3. Country overview
3.1 Background
3.2 Economy
3.3 World Trade Organization (WTO)
3.4 Corruption
3.4.1 Overview
3.4.2 TeliaSonera/Vimpelcom bribery scandal
3.4.3 Closure and re-opening of MTS Uzbekistan
4. Telecommunications market
4.1 Market Overview and Analysis
5. Regulatory environment
5.1 Historical overview
5.2 Regulatory authority
5.3 State Committee for Communications, Information and Telecommunication Technologies (CCITT)
5.4 Ministry of Development of Information Technologies and Communications (MDITC)
5.5 Licensing
5.6 Regulatory developments
5.7 Broadband strategy
6. Fixed network operators in Uzbekistan
6.1 Uzbektelecom
6.1.1 Overview
6.1.2 Privatisation of Uzbektelecom
6.2 Buzton
6.3 East Telecom
7. Telecommunications infrastructure
7.1 National telecom network
7.1.1 Overview
7.1.2 Fixed-line statistics
7.1.3 Fibre optic cables
7.2 International infrastructure
7.2.1 Satellites
7.2.2 TAE cable
8. Fixed broadband market
8.1 Market overview and analysis
8.2 Control of the internet
8.3 Broadband statistics
8.4 Forecasts – fixed broadband internet subscribers – 2016; 2018; 2021
8.5 ISPs/fixed broadband operators
8.5.1 Overview
8.5.2 Unitel
8.6 Other fixed broadband services
8.6.1 Fixed -wireless
8.6.2 EVO
8.7 VoIP
9. Mobile communications
9.1 Mobile overview and analysis
9.2 Background
9.3 Mobile statistics
9.4 Forecasts – mobile subscribers – 2016; 2018; 2021
9.5 Mobile data
9.5.1 3G
9.5.2 4G / LTE
9.6 Mobile data services
10. Major mobile operators
10.1 MTS-Uzbekistan / Universal Mobile Systems (UMS)
10.1.1 Overview
10.1.2 Operational statistics
10.1.3 MTS encounters major regulatory problems
10.1.4 MTS licence cancellation and aftermath
10.1.5 Universal Mobile Systems (UMS)/ MTS Uzbekistan
10.2 Beeline (Unitel)
10.2.1 Overview
10.2.2 Operational statistics
10.3 UCell (Coscom)
10.3.1 Overview
10.3.2 Operational statistics
10.3.3 4G/LTE
10.3.4 TeliaSonera/Vimpelcom’s bribery scandal
10.4 UzMobile (Uzbektelecom Mobile)
10.4.1 Overview
10.4.2 Proposed GSM network
10.5 Other mobile operators
10.5.1 Uzmacom
10.5.2 Buztel
10.5.3 Perfectum Mobile
11. Digital economy
11.1 e-Commerce
11.2 e-Government
12. Notes on forecasting
13. Related reports
Table 1 – Country statistics Uzbekistan – 2015
Table 2 – Telecommunications financial statistics – 2014
Table 3 – Telephone network statistics – 2015
Table 4 – Internet user statistics – 2015
Table 5 – Mobile statistics – 2014
Table 6 – National telecommunications authority
Table 7 – Uzbekistan’s GDP real growth rate – 2006 - 2017
Table 8 – Number of licensed operators by service – 2016
Table 9 – Historical – Fixed-line subscribers, annual growth and teledensity – 1991 - 2005
Table 10 – Fixed-line subscribers, annual growth and penetration – 2006 - 2015
Table 11 – Internet users and penetration – 1999 - 2015
Table 12 – Fixed internet subscribers – 1999 - 2015
Table 13 – International internet bandwidth – 2001 - 2015
Table 14 – Proportion of households with a computer – 2002 - 2015
Table 15 – Fixed broadband subscribers – 2003 - 2015
Table 16 – Fixed broadband subscribers and household overview – 2015
Table 17 – DSL broadband subscribers – 2003 - 2015
Table 18 – FttH broadband subscribers – 2010 - 2015
Table 19 – Mobile broadband subscribers – 2009 - 2015
Table 20 – Forecasts - fixed broadband internet subscribers – 2016; 2018; 2021
Table 21 – Unitel fixed broadband subscribers – 2011 – 2015
Table 22 – Unitel’s fixed broadband ARPU – 2011 - 2015
Table 23 – VoIP subscribers – 2012 - 2015
Table 24 – Historical - Mobile subscribers, annual change and penetration – 1995 - 2005
Table 25 – Mobile subscribers, annual change and penetration rate – 2006 - 2015
Table 26 – Mobile broadband subscribers – 2009 - 2015
Table 27 – Mobile operators, subscribers and annual change – June 2012
Table 28 – Mobile operators, subscribers and annual change – 2013
Table 29 – Mobile operators, subscribers and annual change – 2014
Table 30 – Mobile operators, subscribers and annual change – 2015
Table 31 – Mobile operators by share of total mobile market – 2014
Table 32 – Mobile operators by share of total mobile market – 2015
Table 33 – Forecasts - mobile subscribers and penetration – 2016; 2018; 2021
Table 34 – Historical - MTS (Uzdunrobita) mobile subscribers – 1998 – 2012
Table 35 – Historical - MTS (Uzdunrobita) mobile ARPU – 2005; 2011 – 2012
Table 36 - UMS (formerly MTS) mobile subscribers – 2014 – 2015
Table 37 – Unitel (Beeline) mobile subscribers – 1998 - 2015
Table 38 – Unitel (Beeline) mobile ARPU – 2006 – 2015
Table 39 – Unitel (Beeline) mobile revenue by market segment – 2012 – 2015
Table 40 – Unitel (Beeline) – total capex – 2012 - 2015
Table 41 – UCell (Coscom) mobile subscribers and market share – 2006 – 2015
Table 42 – UCell (Coscom) mobile revenue by market segment – 2014
Chart 1 – Uzbekistan’s GDP real growth rate - 2006 – 2017
Chart 2 - Fixed line subscribers, penetration and annual change – 2006 - 2015
Chart 3 - Internet users and penetration - 2006 – 2015
Chart 4 - Fixed broadband subscribers and penetration - 2006 – 2015
Chart 5 – Mobile subscribers and penetration rate – 2006 - 2015
Chart 6 - Mobile operators by share of total mobile market - 2014
Chart 7 - Mobile operators by share of total mobile market – 2015
