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Kazakhstan 2018 | TELECOMS & IT | REVIEW

Mobile penetration rates are high, but the government's Digital Kazakhstan plan calls for heavy investment in fiber-optic infrastructure to bring high-speed internet to rural areas.

IT innovation is one of Kazakhstan's driving goals as it looks to build a new and more diversified economy. The government is working to establish IT as one of the cornerstones of the new economy, making the country a regional and global leader for innovation. Steady economic development has given Kazakhstan the fundamentals needed to take the next step; the population as a whole is technically literate and well connected thanks to high mobile and broadband internet penetration rates. In coordination with research universities and R&D wings of multinational firms, the government is establishing innovation centers to further develop the nation's IT capacities.

Years of investment have given Kazakhstan a mature mobile infrastructure with high penetration rates. According to mobile research firm GDMA Intelligence, Kazakhstan's 18 million residents had more than 25.43 million mobile subscriptions, a penetration rate on par with the world's most developed countries. Internet connectivity rates were slightly lower, with much of them coming through mobile connections. As of early 2018, more than 80% of mobile-connected Kazakhstanis used mobile internet services, with just under half of this population using more than 6GB of data per month. Fixed-line broadband connectivity rates are significantly lower; one 2013 study estimated that just 13% of the population had fixed-internet penetration as of 2016, with this figure dropping to 6% in rural areas. This gap between mobile and fixed-line access, though dramatic, is not uncommon in recently developed countries. Mobile internet infrastructure is easier to install than fixed-line, especially in Kazakhstan, which has one of the lowest population densities in the world. Nevertheless, broadening the broadband internet infrastructure is, broadly, one of the government's primary IT goals.

The government's Digital Kazakhstan program, launched in 2017, lays out a blueprint for adding digital infrastructure. The grogram is expected to create 300,000 jobs by 2022 thanks to just under a billion USD in investment, split almost equally between the public and private sectors. One of Digital Kazakhstan's initiatives is to bring broadband to more than 1,700 rural settlements. As of late 2017, approximately 1,200 rural settlements had access to high-speed broadband; by laying more 24,000km of fiber-optic cable, Kazakhstan is confident it can more than double the share of the rural population with access to internet. The Digital Kazakhstan plan also calls for bringing high-speed broadband to more than 2,000 schools. A total of 98% of schools in Kazakhstan have internet access, but only one-third have high-speed internet. The government seeks to introduce every public school to high-speed internet infrastructure as an urgent and necessary step for building the human capital needed to succeed in the digital economy.
Kazakhstan has aggressively deregulated its telecoms industry over the past decade, privatizing government monopolies and increasing competition. At present, state-owned Kazakhtelecom is the largest firm in the fixed-line sector, with a market share of over 90% as of 2012. The mobile services sector has three participants; GSM-Kazakhstan and Beeline dominate the mobile network and both provide robust 4G services. With penetration rates at a saturation point, the focus for telecoms providers is increasing bandwidth. Growth is projected to be largely flat through 2022, so focusing on value-added services will be critical for Kazakhstan's providers.

At the university level, the Digital Kazakhstan program is focused on bringing the world to the steppe, allowing Kazakhstani students to learn from the best in the world and build the technological literacy needed to compete globally. The government's approach involves the public, private, and educational sectors working together to build collaborative innovation centers. In early 2016, for example, Kazakhstan partnered with the World Bank to launch the Fostering Productive Innovation Project. By utilizing a series of grants from a combination of public and private sector, the program seeks to develop commercializable technology solutions with the purpose of increasing economic output and improving social welfare. Digital Kazakhstan's approach is noteworthy in that it aims to introduce technological integration to the entire economy. President Nursultan Nazarbayev's 2018 address called for smart technologies and digitization across the petroleum, agricultural, transport, and governmental sectors, arguing that an aggressive move to bring the whole country into the digital era will allow for new cross-connections and the creation of a stronger economy.