Kazakhtelecom

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Kazakhtelecom, the national monopoly fixed line and long distance telecom operator of Kazakhstan, was partially privatized in May 1997 when the government sold a 40% skate in Kazakhtelecom to Daewoo for US$1.37 billion. The amount was to be paid as follows: US$1 billion in investments in the network expansion and modernization, US$100 million in bonus to the government; and US$270 million in debt assumption. The sale to Daewoo was the second attempt of the government to privatize Kazakhtelecom. In 1996, the government awarded a 49% stake in the company to Deutsche Telecom (DT) when the company agreed to pay US$79 million (DM 120 million), invest US$111 million in to the network development, and pay US$50 million to clear Kazakhtelecom's debts to German banks. The deal with Deutsche Telecom fell through due to disagreements about the exclusivity rights. The main problem of Kazakhtelecom was seen by some to be the increasing resistance of the populace to pay for telecom services. By 1995, Kazakhtelecom had 13.6 lines per 100 inhabitants, and only 9% of its network capacity was digital. Daewoo had committed to install 550,000 new lines by the year 2000, to replace outdated equipment, and to increase the efficiency of long distance services. The company had expected to increase number of main lines from 2.3 million to 3.3 million within its first three years of operations. Daewoo had obtained 15 years of exclusivity rights to provide local and long distance services in the country. Daewoo, however, sold its 40% stake in Kazakhtelecom in May 1998 to Kazkommerts Bank and Chase Manhattan (30%) and to other investors (10%). By the end of 2005 the government retained its 50% stake, Central Asian Investment Holdings NV held 34% of Kazakhtelecom and the Bank of new York had a 6.7% stake in the company. The rest of the shares were freely floated on the local stock market. In December 1999, the EBRD approved a US$50 million loan to Kazakhtelekom to be invested in improving the efficiency of the existing lines and services. Kazakhtelecom lost its long distance and international call monopoly in 2004, but de facto remained the only fixed line operator in the country by the the end of 2005. Kazakhtelecom had a total of 2.5 million subscribers by the end of 2005, in the fixed line and long-distance segments. Kazakhtelecom also planned to enter the fast growing mobile market. The company owned stakes in local operators Altel and Kar-Tel. In 2006, the Government sold 4.14% of Kazakhtelecom. The sale reduced the government's stake from 56% to 51%. Also in 2006, Kazakhtelecom fully acquired mobile (CDMA) service operator Altel. Altel operates under the Pathword, Dalacom and CITY brands. As of end 2009, JSC Kazakhtelecom had a total of approximately 3.6 million fixed and long distance subscribers, while its wholly-owned CDMA subsidiary, Altel, had a subscriber base of over 1 million. As of end of 2011, JSC Kazakhtelecom's ownership structure was BODAM BV (16.87%), Deran Services B.V (9.61%), The Bank of New York (12.57%), others (9.95%) and the Kazakh government (51%). On December 21. 2011 Kazakhtelecom concluded an agreement to sell its 495 ownership in GSM Kazakhstan to Sonera Holding B.V. a subsidiary of the Swedish mobile operator TeliaSonera AB. http://www.telecom.kz company website 2011 capex - http://www.kase.kz/en/emitters/show/KZTK 2012 capex from Annual financial report. 2012 capacity data from AR 2012 (Wireless Intelligence only has mobile data). Follow-up: 2013 capex figure only for first 9 months - to update when annual figure is available. Also to update 2013 capacity data when available