5G in Kazakhstan – Minimum Forecasts, Maximum Ambitions

The winners of the auction for radio frequencies, the consortium "Mobile Telecom Service" and "Kcell", will develop 5G networks in Kazakhstan. The main shareholder of the winning companies is the national operator Kazakhtelecom.

However, their representatives' answers at the Central Communications Service briefing to questions about tariff increases, the monopoly position of the winners and the weak operation of networks of previous generations, seemed, to put it mildly, weak for such an ambitious plan

Fifth-generation communication will appear in cities of republican significance. It is planned to deploy networks in almost all regional centres of the country in the period up to 2025.

According to the terms of the auction, the consortium is obliged to install 391 5G base stations in Astana, Almaty and Shymkent during the first year. And in the next four years — 784 base stations per year in regional centres and cities of republican significance.

In total, operators are required to activate more than 7 thousand base stations in order to provide 75% of republican cities and 60% of regional centres with 5G technology by 2027. In the first competition, frequencies cost 62.6 billion KZT, while in the second – 93.4 billion KZT.

At the same time, the existing rules do not contain requirements for the quality of 5G networks. This introduces another uncertainty in the process of planning and building the network. Users can vary from ordinary subscribers to large businesses.

The absence of other market participants also raised questions.

"The auction was transparent and without prior arrangements. Two companies that are currently in the same holding company won. It is clear that this outwardly seems to be monopolism, dominance in the market, but we plan to free up two more frequency bands and put them up for auction. Maybe we'll change the rules: those companies that already have, probably, will not be able to participate – they will need to invest in existing networks. We hope that in a year and a half other companies, for instance Beeline, will join the development of networks,"

Askhat Orazbek, Vice Minister of Digital Development, Innovation and Aerospace Industry of the Republic of Kazakhstan, said at the Central Communications Service briefing.

The cost of 5G

The most important question for users is "how much will it all cost?" seemed difficult to answer. Chairman of the Board of Kcell JSC Askhat Uzbekov evasively said that the company is obliged to provide a technological advantage for the Republic of Kazakhstan in comparison with its neighbours and that it is necessary for a better breakthrough in digitalization.

"The point is that the situation with the cost and with the structure of traffic consumption will change dramatically. Accordingly, this will lead to some changes. But I am not ready to talk about any specific changes now (…),"

The speaker replied at the briefing.

Existing Problems with 3G and 4G

Monitoring of incoming complaints about the quality of communication services shows that the number of 4G base stations is not enough to fully cover and provide high-quality mobile Internet services to Kazakhstanis. Perhaps operators should first use the full potential of 4G, work out the technicalities, and only then switch to a new generation of communications.

Disagreeing with this, Askhat Uzbekov suggested that the existing communication problems directly depend on the "radiophobia" of residents.

"If earlier the base station was removed in the presence of one of its opponents, then soon, we hope, the opinion of 2/3 of the residents of the residential complex will be required. We have all the technical capability to develop networks, we are ready to invest in it. After all, our customers, our money is at stake. We hope for positive changes,"

the speaker commented

The Economic Value of 5G

De facto, 5G is the basic condition for a reliable and full-fledged industrial Internet. However, in the national market leading in the degree of 5G implementation, China, there is a shift towards the B2C segment.

Huawei CEO Ken Hu, speaking at the Global Mobile Broadband Forum, noted that the development of a new generation network has led to a sharp increase in the popularity of high-resolution video and an increase in traffic. According to him, mobile applications have increased traffic consumption by 40% and have become the revenue engine of mobile operators along with the oil and gas, mining and metallurgical and transport sectors.

Based on the briefing, in Kazakhstan, the developers of the 5G implementation concept focused on reducing the digital inequality between the city and the countryside and expanding the product line of mobile operators. Another direction is the implementation of the concept of "smart cities" and Industry 4.0 projects in remote regions to increase productivity and safety.

It seems that the number of promises and ambitions of telecom operators is much greater than the probability of the complete and trouble-free implementation of a new generation network at the stated time.

RMB: Three years ago, Kazakh telecom operators began testing private 5G networks in a pilot mode: Kcell in 2019 in Almaty and Astana, in the same year Beeline Kazakhstan in Shymkent, and in 2021 Tele2/Altel was the first to install 5G test zones at points with the highest traffic in Almaty, i.e. along a pedestrian street Panfilov, at the Medeo Stadium and the Shymbulak Ski Complex.

The government noted the "good results" of pilot projects in May 2022. There was reportedly an effective frequency coverage area of more than 10 square kilometres. It was also possible to achieve a speed indicator of up to 1.6 Gbit/s and a delay level of less than 10 ms.

Original Author: Alexander Smolin

DISCLAIMER: The text has been altered, but the content is the same. Refer to the original article in Russian for accuracy.