This post is by Alla Shabelnikova, Research analyst for Informa Telecoms & Media with a focus on telecoms in Russia and CIS.
Kazakhtelecom was the only operator in Kazakhstan to obtain a permission to use LTE frequencies in 2011. And until 2015 its fully-owned subsidiary Altel will have a monopoly on LTE. Other operators took the news with a bit of resentment, given that in 2010 Kcell and Beeline successfully tested LTE in Kazakhstan. But for Altel, being the smallest player on Kazakhstan’s mobile market, working on less and less popular in the country CDMA standard, this was probably the only way to survive.
At the end of 2012 the network built on Huawei‘s equipment was successfully launched in Almaty and Astana, two largest cities of Kazakhstan. Several months after the launch the company started a campaign aimed at migrating its CDMA subscribers to its LTE network. In November 2013 Altel launched LTE in Kapshagay, Kaskelen, Yesik and Talgar, increasing its LTE coverage to six cities in Kazakhstan. The next launches took place in late December 2013, adding coverage in the Western and Central parts of Kazakhstan, including Shymkent and Aktobe.
Though it’s been several years since the first LTE network was launched in the world, most of CIS countries seem to follow the same path in launching the first LTE network and Kazakhtelecom is not an exception:
- LTE was launched in two biggest cities, including the capital (bigger audience to address)
- LTE was offered at first on USB dongles and WiFi routers
- There was no voice support, hence LTE was not offered on smartphones
- LTE was priced at a premium to 3G
And of course, the target audience for the new technology was young people that need Internet on-the-go. Pricing was also not very original: three data packages and one unlimited option for heavy-users. What’s interesting about data packages offered in CIS and Russia – the entry-level allowance is quite high, compared to the world average. Altel, for example, offers 2, 4 and 6 Gb. At the same time Altel states that its mobile offering is not substituting fixed broadband which is being actively developed by Kazakhtelecom and will not cannibalise parent company’s revenue from fixed broadband service.
My thoughts on how exactly Altel and Kazakhtelecom are trying to avoid fixed to mobile broadband substitution and some recommendations on what Altel should do next can be found in this case study (available only for IC users).