Telecommunication

Telecommunications in Kyrgyzstan

The telecommunications market has been opened to both foreign and domestic investors in accordance with requirements set down by the WTO, membership to which it did achieve in 1998. According to the ITU, Kyrgyzstan had implemented full competition across all segments of its telecoms sector by 2007.

Private operators, which actively operate in the market of mobile phone systems and Internet services, are investing heavily in the relevant infrastructure. There were four mobile networks in operation, two GSM, one D-AMPS and three CDMA. Since the first GSM network was launched in 1998, the number of mobile subscribers has grown exponentially, from a few thousand in 1999 to 1.8 million in early 2008. In fact the mobile subscriber base was growing at an annual rate of more than 100% coming into 2008.

Russian-owned Saima Net was established in 1997 and offered local, national and international telephony in addition to Internet services. It had been the only serious rival to Kyrgyztelecom.

SaimaNet was building its business on fiber optic lines and was also entering the southern regions of the country.

Kyrgyzstan has one of the largest number of Internet users per capita of Central Asian countries. Access to Internet in Kyrgyzstan, as with other telecom services, was strongly biased towards the urban customer. Also unequal had been the Internet user distribution among the cities and towns: about 98% of users were concentrated in the two largest cities, Bishkek and Osh, although the population of these cities was just about 22% of the country's total population. Internet penetration, measured by users as a percentage of the total population, had reached 14% by the end of 2007, the estimated number of users numbering 750,000 at that time.

The country's mobile market did not take off seriously until the launch of Bitel's GSM network in 1998. Since then the number of mobile subscribers has been growing rapidly year-on year. Lower prices as the result of competition, along with the introduction of prepaid card services, have also helped to boost subscriber numbers. Due to the inadequate state of the fixed-network infrastructure, mobile phones have become by far the most popular means of communication in Kyrgyzstan. Mobile coverage has been provided to around 70% of the territory encompassing about 90% of the population. Kyrgyzstan had three GSM mobile operators: MegaCom, Bitel and Sky Mobile by December 2006. Earlier in 2006, in a complicated transaction, Bitel had transferred all its assets to Sky Mobile. Kyrgyzstan's mobile market was expected to reach 3.5 million subscribers by 2010.