TBY talks to Kuat Bakhridinov, CEO of Alem Communications, on WiMAX technology, its partnership with Samsung and ZTE, and his outlook for 2011 and beyond.

TBY What were the core aims when founding Alem Communications?

KUAT BAKHRIDINOV Alem Communications was established in 2008, during the period of the active introduction of cable television and the appearance of new telecommunications operators. The following year the company had made the first significant step in its strategy, acquiring several large and small telecommunications assets, which have been successfully integrated. Under scaled-back expansion, the company opened offices in 12 major cities in Kazakhstan. By now the portfolio of services has been fully formed, including television, internet, and communications with substantial subscriber bases. Using the internal potential and expertise of its specialists, the company has gained weight and authority, both in the mass and the corporate market segments. The next stage in the development of the company was the development of the wireless internet market based on WiMAX technology. Using the potential of its subsidiaries, Alem Communications launched WiMAX services in five cities, including Almaty and the capital Astana. A cooperation agreement with Intel was also announced and internet access was secured by signing a contract with Kazakhtelecom, the biggest player in the telecommunications market. All of these strategic efforts have allowed Alem Communications to expand the territory of its presence up to 12 cities and prepare a solid base for further development.

What are the secrets behind Alem’s instant success?

We have an experienced management team. Since we had the business plan approved, we’ve had everything go according to plan, which is not the case for many players in the market. We’ll be focusing on increasing our presence, and working to supply all our customers with the necessary bandwidth and services. Currently, the main source of income for the company is a package of cable TV services as it is the principal activity of a majority of the acquired operators. But in the very near future we plan to aggressively expand the coverage area of mobile internet access through WiMAX technology. Growth rates in this area are impressive even now. We made our first commercial launch of WiMAX in the city of Almaty in March 2010, followed by commercial launches in Aktau, Astana, Karaganda, and Taraz. We are confident that we can sustain high rates of network construction over 2011. In 2011 we’re going to launch voice-over WiMAX services as well. We are also considering a migration to Long-Term Evolution (LTE), as it seems to be a developing trend in the world. The more mobile internet is demanded, the more we focus on the development of WiMAX technology with the possibility of migrating to LTE standards. For our company, WiMAX technology is not only a business tool, but also an experience of cooperation with large partners such as Samsung and ZTE. With their extensive experience in wireless network services, these partners give us invaluable support on the launch and maintenance of high-tech equipment.

What are the specifics of your strategy?

Despite its vast area, the mobile market in Kazakhstan is considered to be sufficiently developed. Until recently it was limited to voice network services, but nowadays broadband access development is taking place in both the cable and mobile market segments, including the 3G network. Our strategy is pro-active, with the expectation of an increasingly growing consumer need for fast and affordable mobile internet services. Users have been accustomed to searching for information and online entertainment via internet users recurrently, we expect demand for mobile internet: in hotels, home, cafes, railway stations, and so on.

What is the significance of your partnership with Samsung and ZTE?

Samsung brought state-of-the-art technology to our company, along with a deep knowledge of the industry. It has helped us a lot during our startup operations as we had very little experience. In the mobile sector you must always have at least two partners. This is why we chose ZTE as our second partner to balance our development. ZTE is also a recognized expert in WiMAX formats, and this helps us to compare what different companies are doing. It gives us some assurance that we’re moving in the right direction, and helps us make sound decisions. We’re benefiting from both of our partners.

What is your outlook beyond 2011 for the sector and for Alem Communications?

Such brands as Kazakhtelecom, Beeline, and Kcell remain the largest players in the market, yet this landscape will change as we continue on our growth course. The main trend of the current year and of the future is the increasing role of broadband internet access and integrated offers. 

Alem Communications will maintain its position of continuously developing our services and coverage area, and considering and analyzing the behavior of large players and changes in the structure of small players. In general, Alem Communications has a clear vision of the market, and implements its mission through its partners and with the use of its internal capacity. Alem is looking for acquisition prospects, and we will analyze any opportunities among second-level players, and continue this strategy for the time being.

© The Business Year