Overview of the telecom­muni­cations market in 2022

The telecommunications sector has retained its critical role in modern society, allowing people to continue to communicate and work together. At the end of 2022, the total volume of the communications services market equaled KZT 1,106.038 billion, which exceeds the figure for the previous year by 4%.

Mobile communications dominate by type of services. Mobile revenue still generates more than half of the total market volume — 55.7%.

Income from fixed telephony fell to KZT 47.9 billion.

The share of data transmission and Internet access services in fixed networks has shown a decreasing trend in recent years, despite an increase in income in absolute terms. In 2022, the market share was about 15.5%.

In 2022, the Pay TV services segment accounted for 4% of total income from communications services.

Revenues from services to telecom operators are growing due to structural shifts — with the growth of the retail market, the volume of services to telecom operators is also increasing, which is reflected in the growing share of the segment in total revenues from telecom services.

At the end of last year, the total market volume of communication services amounted to KZT 1,106.038 billion, the compound annual growth rate (CAGR) amounted to 4%.

In the revenue structure, the key income-generating segments are mobile communications services and data transmission and Internet access services. Their market share in 2022 was 55.7% and 15.5%, respectively.

The key factor in the growth of the cellular networks is the growth of mobile data transmission and services based on them.

The stable share of income from B2O services — 9.5% — is associated with the active development of infrastructure by telecom operators in remote areas in order to reduce the digital divide between citizens.

Indicative is the increasing share of income from IT and additional services — 8.7%, which indicates the growth of both operators’ own service competencies and the development of partnerships with service providers.

The fixed telephony market continues to be in a stage of natural stagnation. Mobile substitution and mass use of mobile messengers as a priority means not only for messaging, but also for making calls, leads to a significant decrease in the profitability of fixed telephony services. Thus, the volume of the fixed telephony market in 2022 was KZT 47.5 billion.

The market share of the Kazakhtelecom Group in 2022 was 65.1%. The increase in the Group’s share in 2019 — from 28.9% to 63% and in 2020 — by 4.1 sub-points compared to the actual value of 2019 is related to the acquisitions: in June 2019 the transaction was completed, as a result of which Kazakhtelecom JSC became the sole shareholder of Khan Tengri Holding B.V.

Mobile communications remain the dominant segment of the telecommunications market in terms of revenues and continue to show strong growth year by year. Having surpassed the milestone of KZT 592.98 billion in 2021, the market retained its confident dynamics, showing a volume of KZT 616.063 billion in 2022.

The development of the fixed broadband market is extensive due to the implementation of the “Digital Kazakhstan” program. Subscriber base growth is ensured both by natural growth of the number of enterprises and households, and by active promotion of the service in rural areas. It should be taken into account that rural subscribers have lower profitability compared to urban households.

According to estimates, in 2022 the volume of the fixed broadband market was KZT 127 billion, which is 5.2% higher than the previous year.

Along with growth in revenues from broadband services, the data services segment demonstrated significant growth. In 2022, revenues from the organization of corporate VPN networks increased to KZT 36.2 billion, which corresponds to an increase of 3.5% compared to the previous year.

Channel lease and corporate network services relate exclusively to the legal entity segment. Active consumers of these services are state organizations.

In 2022, the volume of the Pay TV market amounted to KZT 44.7 billion, an increase of 2% compared to the previous year.

As before, the main income from Pay TV services is generated by households — more than 93% of the total amount or KZT 41.7 billion in monetary terms. In recent years, pay TV operators have become more focused on the corporate segment, trying to use it as a resource for additional connections.

The volume of services provided by operators in the B2O segment by the end of 2022 was KZT 105.1 billion.

The main revenue-generating services are channel lease and Internet access services — they account for 42% and 18% of all revenues from B2O services, respectively. The main consumers of channel lease services are cellular operators who are constantly working to improve their network coverage and install additional base stations. Coverage expansion is currently taking place mainly in rural areas. The volume of Internet access services in the operator segment is growing from year to year, which is directly related to the growth in consumption of data transmission services by end users in operator networks. The third most important in the structure of income from B2O services is the segment of transit of data traffic of foreign operators through the networks of Kazakhstani telecom operators. In 2022, IP transit revenue accounted for 18% of total service revenue in the backbone market.

In 2022, the volume of the IT market was KZT 96.2 billion, an increase of 11.5% compared to 2021.

The main volume of IT-services provided by operators to commercial clients in the open market (outside the state order or parent company service) is related to the provision of data center-based services. As additional areas, operators are developing cloud video surveillance services, implementing IoT-based solutions, and acting as fiscal data operators (FDA).