TBY talks to Veysel Aral, CEO of Kcell, on the development of the company, the role of innovation, and economic diversification.
TBY How has Kcell developed since its inception in 1998?
VEYSEL ARAL It has been more than 12 years now since the first commercial launch of the GSM-900 standard. President Nazarbayev participated in the official launch ceremony of Kcell’s mobile network. We are proud to state that Kcell was the first to give all Kazakhstani people a unique opportunity for integration into the global information network of GSM standard mobile communications. Since then, owing to our dynamic investment approach as well as the support of our shareholders—Europe’s fifth largest cellular operator TeliaSonera, and Kazakhtelecom—the national telecommunications infrastructure has become one of the most advanced among the CIS. The development of mobile communication systems has made a significant contribution to the local economy. Based on industrial experts’ opinions, the increase in mobile communication penetration resulted in further growth of local GDP from 1% to 1.6%. The current nominal cellular communication penetration within Kazakhstan exceeds 100%. I believe those figures speak for themselves. For the past 12 years Kcell has invested over $1.7 billion into telecoms infrastructure development, thus becoming one of the biggest investors of the non-oil-and-gas sector. By looking at those figures from a different perspective, you can see that in 1999 we launched the operation in Almaty, and acquiring the 10,000th subscriber was a big step for us. As of today, the number of registered subscribers has reached over 9 million. From a technical perspective, we started operations by using a few base stations within one city, and we have more than 5,000 of them all over the country. Our network covers more than 81% of Kazakhstan’s populated area, and Kcell operates in 2,621 cities and towns, which comprises 100% coverage of locations with more than 5,000 people and 82% coverage of locations with more than 2,000 people. The plan is to provide mobile communications to all locations with over 1,000 people by 2013. We launched 3G in 2010 to support the OSCE Summit and acted for the 7th Asian Winter Games as the official mobile operator. As of today our 3G network is working in 32 cities built on over 900 base stations.
How would you assess Kcell’s performance and vision as a pioneer in innovative technologies?
Kcell aims to provide world-class services, and we pursue this objective with confidence through improvements in our tariff policy and our quality of service at all levels. Kcell has always been a trendsetter and we are leading the development of the telecommunications market in Kazakhstan. We shall continue doing this in 2011, introducing new 3G services, which not only meet but also form market demands. For instance, we plan to provide universal services so that telephones can serve as modems, bankcards, and electronic door keys. We’re also ready to launch 4G/long term evolution (LTE). I’m sure this is a good prospective for the further development of the Kazakhstani telecommunications market, which we hope will be realized in the near future with the most active participation of our company.
How can the telecommunications sector contribute to the development of the non-prime economy?
Kazakhstan has a challenging strategy to become one of the most competitive economies. Penetration and the availability of mobile telecoms services as well as the speed of mobile broadband data traffic in mobile networks are the key factors in rating the most competitive economies. This is an obvious fact that drives economic development, too. However, Kazakhstan’s economy is too dependent on raw materials and oil and gas production, and of course the price levels of these substances on the international markets.
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