Expert Warns Sale of Transtelecom Stake Overlooks Kazakhstan’s National Security Risks

The deal is being viewed as a business project, ignoring the risks to Kazakhstan's national security, Orda.kz reports.

Expert Alma Tulebayeva spoke out against the sale of a controlling stake in the backbone telecommunications operator JSC Transtelecom.

In her commentary, she stated that decisions surrounding the company are being made in the interests of business, not the state, despite the operator's strategic role in the country's critical infrastructure.

Tulebayeva recalled that Transtelecom was created from divisions of Kazakhstan Temir Joly to modernize railway communications. The company grew out of the State Enterprise "Head Communications Distance," which handled telegraph and telephone communications, as well as automation systems responsible for train safety and control.

In 1999, the operator was spun off into an independent entity within the KTZ group.

Still, it retained its technical support and communications modernization functions on the railway and remained the exclusive service provider for the national carrier.

The privatization of Transtelecom began in 2016. In 2017, a 26% stake minus one share was sold. In 2021, Unit Telecom LLP was recognized as the official owner of 75% minus one share of Transtelecom JSC. There's no point in writing about the reshuffling of Unit Telecom's ownership list here,
 Tulebayeva argues on Facebook.

In March 2024, Forbes magazine reported on a major deal between Transtelecom and Freedom Telecom. The companies agreed to divest seven data centers.

Tulebayeva emphasized that Transtelecom is involved in more than just KTZ. The company is also involved in KazAtomProm's Digital Mine project and the development of communications in rural areas. Therefore, in her opinion, the sale of 75% of the shares should prioritize national security over the interests of individual private entities.

Given that several areas of the country’s critical infrastructure depend on Transtelecom, the sale of 75% of the shares [...] must be carried out with due regard for Kazakhstan’s national security, and not just private interests,
 the expert believes.

The National Security Committee of the Republic of Kazakhstan, as the body responsible for Kazakhstan’s national security and its sovereignty, is obliged to monitor and participate in this transaction,
 Tulebayeva wrote, adding that she fears the consequences of transferring the strategic asset to new owners.

She separately noted that she “does not like the fact that Kazakhstan’s strategic assets [...] are now concentrated in the hands of Timur Turlov.”

Last week, it was reported that Transtelecom shareholders approved a new board of directors in connection with the deal's launch. The company has now moved on to obtaining regulatory approvals. Unit Telecom retains a controlling stake of 75%, while Kazakhstan Temir Joly holds the remaining 25%.

Original Author: Ruslan Loginov