LOOP THE LOOP

Kazakhstan 2015 | TELECOMS & IT | INTERVIEW

TBY talks to Andrey Khan, Director General of KazTransCom, on developing the IT network, improving service, and sector trends.

Andrey Khan
BIOGRAPHY
Andrey Khan studied in Taganrog, majoring in Radio Engineering. He also received a degree in Finance and has extensive experience at a number of financial institutions. In 2004, he received an MBA from Kazakhstan University. He has been working for KazTransCom since 2003. In 2009, he became Deputy Chairman and in 2013, he became the company’s Management Board Chairman (Director General).

How is KazTransCom contributing to the development of Kazakhstan's IT network?

When it comes to internet penetration, only 8-10% of the Kazakhstani population had internet access in 2004, whereas today internet penetration has exceeded 70%. KazTransCom has historically focused on B2B transactions, and made a huge contribution in terms of infrastructure development in the oil and gas region, that is the western part of the country. We focused on production, whereas our competitors and other operators focused more on retail and doing business in the big cities. A lot of the infrastructure we are building is located in areas that specialize in production. Astana was one of the first cities with a large concentration of commercial companies that we started working in. We built most of the fiber optics in the city's Left Bank area. After that, we moved on to other cities that had a medium enterprise segment. There were situations where we approached companies that either had no internet access or were using highly expensive satellite or radio technologies, and we helped these businesses by providing them with internet access.

The latest trend among telecommunications companies is to focus on cutting prices. However, it is equally important to provide quality service in this segment of the market. How does KazTransCom plan to improve the quality of its service?

The quality of the service we provide is very important, as is the price. It still has a serious impact on the choice of the operator. In terms of the fiber-optic networks that we are building and the infrastructure we are developing, we make sure to reserve specific loops. In places where we cannot secure them directly, we do it through our partners. This ensures that the quality of communications is high and does not suffer from any interruptions. Another measure we have taken in order to ensure uninterrupted connections is that we never partner with just one operator—we always team up with at least two. That is one of the technical policies of the company that helps ensure the quality of the connection.

What challenges and technical difficulties do you face trying to provide connectivity to the entire country, which is among the largest in the world?

Kazakhstan is a large country with a small population. If we look at the price of a meter of fiber optics per person, we can see that it is very expensive. You would have to invest between $160 and $200 million in order to create proper infrastructure here. Given that KazTransCom's revenue is around $87 million, we are physically unable to make such an investment. Another challenge we face is the fact that distances between cities are huge and some areas do not have infrastructure, electricity, or even roads. What is often required is to use equipment that can transmit signals for longer distances, and this increases the cost of building the necessary infrastructure.

What other trends do you see emerging in the Kazakhstani telecommunications market in the short term?

One of the up-and-coming developments is related to cloud computing. Kazakhtelecom will be making large investments in order to develop various cloud computing technologies for SMEs and the retail sector. We also expect a lot more fiber optics cables to be built in cities. This will greatly increase traffic amounts. Moreover, there are a lot of international companies coming into Kazakhstan—companies from Russia and abroad that have their own corporate connections. Another trend is actively developing LTE wireless data network technology. Satellite network technologies are not developing as quickly as some of the overground methods.