"IT and Telecom" special project. Concentrated market

The domestic telecommunications market has changed dramatically in recent years. The crisis and high competition have influenced it massively. Now the segment of telecommunications is developing towards innovation. Sergey Tabakaev, ASTEL JSC Commercial Director, spoke about the current trends in the high-tech industry in an interview.

 

- We can say that the Kazakhstani telecommunications market is quite narrow and all players know each other by sight. How has the situation with the participants changed at the moment and what trends do you observe?

 

- If we talk about the trends in the telecommunications market that are present in the corporate sector, then we can identify two main areas: this is the absorption of smaller players by the major players in the industry, and the reduction in the cost of Internet services. Now in our sector there are such players as Kazakhtelecom, Transtelecom, Katelko, KazTransCom and Astel. Although 2-3 years ago such companies as "Arna / Dukat", "2DAY Telecom", "Nursat" worked very actively. At the same time, they did not go anywhere, but were either bought up, or simply changed the field of their activities. The second trend is associated with falling prices for telecommunications services. You can perfectly observe this from the numerous promotions and commercials broadcast by our media.

 

- You mentioned the concentration of the market, which raises the question of how much cellular operators have intensified their work in this regard?

 

- They started with the creation of their own networks. Beeline came to this earlier, when it bought up the companies that were on the market before and began to build its network across the territory of Kazakhstan. Not so long ago it was announced that TeliaSonera bought WiMax-business from Alem Communications digital holding for $ 170 million. At the same time TeliaSonera agreed with Visor Group on joint investments in KazTransCom company.

You see the concentration process continues. Moreover, the cores of concentration are cellular companies that have a huge financial resource and have an even greater need for cost management than we do. They are trying to build their own backbone networks and not depend on anyone.

 

- How are things going with government procurement in the field of telecommunications services? You may have noticed that our free market is becoming narrower and more and more like a state monopoly.

 

- The National Company Kazsatnet has been operating for a long time. It has very broad powers in terms of a single multi-service (transport) environment for the state bodies of the Republic of Kazakhstan (ETS GO). The latest resolutions gave them the opportunity to conclude contracts with all state bodies without holding a tender for public procurement. This is where the competition ends. If earlier we, Kazakhtelecom, as well as Beeline and Kaztransk worked in this market, and there was a competition between us for government purchases, now this is not the case. Now "Kazsatnet" is obliged to conclude an agreement with a government agency. In fact, there is a concentration of financial flows at one point. It is now clear that they are not operators at all.

In this regard, we wrote requests to the prosecutor's office in order to clarify how justified this company has sent to all state organizations in fact a letter with instructions to renegotiate the contract even for the current year with them. We were told that within the framework of existing regulations, existing legislation, they do everything within the specified powers. So with us here the competition is not very much. In order to compete successfully, market players announce new products and services for their customers.

 

- Recently, companies are actively conducting information "bombing" associated with cloud technologies. What are your expectations for cloud computing?

- It seems to me that cloud services are being overvalued as such today. Why overrated, because we have an example with WiMax. Two or three years ago, they shouted from all sides about WiMax, as some kind of revolutionary technology that will change the world, but what do we see in practice and who, most importantly, shouted it? It was shouted by the hardware manufacturers who live off the hardware that sells. Cloud technologies, roughly from the same opera, but mainly software manufacturers advocate here. This raises the question, what channels will the clients communicate with this cloud? Software makers assume that everyone has optics and that everyone plays by the same business rules.

 

- However, businessmen are beginning to wonder how they can keep their accounting somewhere on someone else's server?

 

- Of course, we know who serves it, but we don’t know who has access to it besides us, they say. This raises the question of psychology. Therefore, it is not so simple about cloud technologies. Sergei, you have been working in the field of telecommunications services for several years and you know firsthand what shortcomings exist in the current law.

 

- Tell us what needs to be changed in order for this sector of the economy to develop at a faster pace?

 

- Not an easy question. I would probably say about the legislation in the customs sphere. We began to spend more on this business, because new customs duties were introduced, which did not exist in Kazakhstan before. If earlier we bought telecommunications equipment from abroad, and it cost us cheaper, now it is more expensive. The system of obtaining permits has become more complicated.

 

By and large, after the creation of the customs union, it became more difficult for us with the equipment that we bought from far abroad, but it became easier with the equipment that goes through Russia, since all customs duties were removed. In Moscow, it has become easier to find some kind of equipment, including foreign ones. Russian companies, especially those that import foreign equipment, open their branches in Kazakhstan. Large Russian system integrators have gained a certain advantage and there is such a suspicion that it will be very difficult for our internal companies to compete with them.

 

- And where do you see our competitive advantages then?

 

- I think that we can compete only through our legislation, including government procurement, and some kind of administrative resources. And the second is knowledge at a more subtle level of subconsciousness of our internal market. That is, on the accumulated client base and on the established connections.