Structure of the Kazakhtelecom JSC Group of Companies
Subsidiaries play an important role in the establishment of Kazakhtelecom JSC as an integrated service provider on the information communications market through:
- strengthening the position of the Kazakhtelecom JSC Group in the mobile segment of the telecommunications market and contributing to the development of traditional telecommunications services;
- launch of new products that supplement the main line of services of Kazakhtelecom JSC;
- development of new areas such as e-commerce (“Kazakhtelecom Store”);
- ensuring digitalization and work with big data.
Khan Tengri Holding B.V., which owned 100% stake in mobile operator Mobile Telecom-Service LLP, was liquidated on 28.12.2022 in accordance with the decision of the Sole Shareholder — Kazakhtelecom JSC in accordance with the procedure established by law. In connection with the liquidation of Khan Tengri Holding B.V. 100% participation interest in Mobile Telecom-Service LLP was transferred to Kazakhtelecom JSC, and, accordingly, Kazakhtelecom JSC is the sole participant of Mobile Telecom-Service LLP.
Mobile business
- Leading mobile operators in the telecommunications market of Kazakhstan Kcell JSC and Mobile Telecom-Service LLP operating under the brands Kcell and Activ and Tele2 and Altel.
- In December 2022 a consortium of Kcell JSC and Mobile Telecom-Service LLP was declared the winner in an auction for the allocation of frequency bands for the introduction and development of 5G/IMT fifth generation cellular communications in the Republic of Kazakhstan. The Consortium, according to the terms of the tender documentation, during the first year is obliged to install 391 base stations of 5G in Astana, Almaty and Shymkent, and during the next four years — 784 base stations per year in the regional centers and cities of national importance. By 2027, 75% of cities of republican significance and 60% of regional centers will be provided with 5G technology.
- The deployment of the fifth-generation network and the development of the 5G industry ecosystem in Kazakhstan will inevitably and tangibly affect the economy. This will happen through the implementation of digital transformation, where 5G platforms will be key factors in transforming the economy.
- 5G will make digitalization more accessible, allowing small businesses, government services and even individual households to take advantage of smart products and services.
- The speed, reliability and scale of 5G already offer enormous social and economic benefits as a platform for digital transformation.
Digital Kazakhstan
- Kcell JSC, together with Mobile Telecom-Service LLP and Kart-Tel LLP, have made significant progress in expanding mobile coverage across the country through their involvement in the 250+ project, which is part of the Digital Kazakhstan program. The goal of 250+ project is to achieve a high level of digitalization of the entire population of Kazakhstan by providing access to broadband mobile Internet in rural areas where 250 or more people live. Within the framework of the “250+” project, Kcell JSC and Mobile Telecom-Service LLP fulfilled their obligations for 2021-2022 and provided Mobile broadband Internet access in 240 RS: Kcell JSC in 139 RS and Mobile Telecom-Service LLP in 101 RS respectively. In addition, mobile operators upgraded their networks in RS to LTE technology: Mobile Telecom-Service LLP in 276 RS and Kcell JSC in 108 RS.
New business opportunities
- Development of e-commerce through the platform of goods “Kazakhtelecom Shop”.
- Joint sale of a new line of business with Kazakhtelecom JSC — labeling and traceability of goods in the Republic of Kazakhstan.
- Creation of a single information security center for the Fund’s portfolio companies.
Stregthening of positions
- Fixed connection in rural areas.
- Communications hub with the Russian Federation.
- Outsourcing Contact Center services.
- A new data processing center (DPC) in Astana.
Mobile communication
Kcell JSC (51%)
Over the last 20 years, Kcell JSC has built one of the most modern, technologically advanced and extensive mobile networks in Kazakhstan. Integration with Kazakhtelecom JSC is currently underway, which will make it possible to significantly expand the range of services in the B2B and B2C segments, while reducing costs and increasing the quality of service.
Kcell provides mobile voice, short message transmission, additional services (VAS) such as media messaging, mobile content access, and data transmission services, including Internet access.
Kcell and Activ brands have proven themselves in the highly competitive telecommunications markets of the B2B and B2C segments and are known for their quality of service and value. Kcell has an indefinite license to work on 2G, 3G and 4G/LTE networks.
Key results for 2022
Kcell JSC continues to strengthen its position in the market as Kazakhstan’s main digital player. An important event in 2022 was the completion of the project to introduce the operator’s unified billing on the digital platform Nexign Converged BSS. During the implementation, all segments of the more than 8 million subscriber bases of two brands, Kcell and Activ, were migrated to the new environment. This project, which was implemented in the shortest possible time, will enable the Company to bring the latest products and services, including those based on 5G technology, to the market.
In order to achieve technological leadership, Kcell JSC carries out large-scale works on construction and upgrade of the network, as well as its integration. Thus, for 2022, equipment was installed and upgraded at 1,272 base stations, all of which are 5G-ready. As a result of the work performed, the data transmission speed increased by up to 40% at the locations where installation works were carried out. In addition, frequencies were refarmed in the cities of Turkestan and Zhanaozen, as well as in the settlement of Aiteke Bi in Kyzylorda region. Thanks to these works the 4G speed has increased.
Aware of its responsibility to society, Kcell JSC continues to develop communications in rural areas. The number of activated base stations in villages since 2020 is 468 under obligatory programs and about 550 under own programs of development of networks in rural areas. Also, the Company plans to develop the Mobile broadband Internet access network in rural areas under its own program for 2023-2024. As of 06.03.2023, base stations have already been activated in 7 RS, currently the work is underway in more than 10 RS.
Mobile Telecom-Service LLP (100%)
Mobile Telecom-Service LLP is a mobile operator in Kazakhstan, providing a full range of 2G/3G/4G (LTE/LTE Advanced) mobile communication services, and providing services under the Tele2 and Altel brands.
Mobile Telecom-Service LLP provides mobile voice, short message, value-added services (VAS), such as multimedia messaging, access to mobile content, and data transmission services, including Internet access.
Key results for 2022
Mobile Telecom-Service LLP (MT-S) performs successfully: according to the results of 2022, the main planned financial indicators were exceeded. Revenues for 2022 increased by 10% compared to 2021, EBITDA increased by 10% to 2021, and efficiency was 54%.
MT-C retains its technological leadership in the telecommunications industry of the republic and continues to introduce advanced technologies for end users. According to the authoritative international rating Speedtest for the third year in a row the mobile Internet from MT-C is recognized as the fastest.
In order to achieve the planned indicators, MT-C conducted various commercial activities and launched new tariff lines during the year.
Also in 2022, MT-C and Kcell JSC continued to integrate their networks to maximize all potential synergies, while continuing to share best practices to help further improve technology and services.
Information and communication services
QazCloud LLP (49%)
The Company operates as a single service provider to provide services in the Fund Group. At the end of 2022, revenues amounted to KZT 10 billion.
Range of services:
- IaaS — Infrastructure as a service;
- Services of the information security operations center;
- IT outsourcing/outstaffing;
- Lease of computer equipment and office equipment;
- Technical support and development of SAP systems;
- Digital transformation;
- Other IT services.
Key results for 2022
In 2022, the second stage of the Kosshi DPC was accepted. An additional 100 racks were put into operation.
ISO 27017 certification for compliance with best practices in providing secure cloud services was passed.
The QC data center is PCI DSS certified. Certification is required to accommodate the equipment of banking companies.
Since September 2022, by decision of the Board of Directors of Kazakhtelecom JSC, measures have been taken to sell the share of participation owned by Kazakhtelecom JSC through an open two-stage tender. Completion of all procedures is planned for 2023.
Technical resources
Vostoktelecom LLP (100%)
Vostoktelecom LLP is a frequency and technical resource of Kazakhtelecom JSC for the provision of telephony and Internet services in rural settlements (RS).
In 2022, the project to provide broadband access in the RS with populations of 50 to 250, as determined by the industry regulator, will continue.
KT IX LLC (100%)
The Company operates as a technical hub of Kazakhtelecom JSC in the Russian Federation, connecting and servicing IPLC and IP VPN clients:
- connect to its terminal on LDITC No. 9 and service operators and corporate clients under the lease of IPLC and IP VPN channels;
- is an Internet peer-to-peer platform, sending traffic to Google, Vkontakte, MailRu, and the content of high-clarity television in the form of HD, UHD, 4K to the networks of Kazakhtelecom JSC;
- provides high-quality Telepresence video conferencing services.
New businesses
NURSAT+ LLP (100%)
NURSAT+ LLP is a subsidiary of Kazakhtelecom JSC developing new lines of business in the area of e-commerce.
In 2022, the company continued to develop e-commerce services. Kazakhtelecom Shop (shop.telecom.kz) was launched. The main events on the project:
- Development of product categories, including categories for Kazakhtelecom JSC’s services, such as “Wi-Fi routers and accessories”, “Smart home products” and “4G-based Internet”.
- Development of presence as a seller on the main marketplaces with telecommunications goods.
- Development of RPA-based automation to increase business efficiency by robotizing processes and operations.
- Development and launch of a number of website features and CRM system to develop front and back sales funnel.
KT-Telecom LLP (100%)
In October 2021, Kazakhtelecom JSC acquired 100% of KT-Telecom LLP from Kcell JSC in order to further transform the Company into Real Estate Fund JSC as part of the Real Estate Fund project. In 2022 organizational measures were taken.
Digital Economy Development Center LLP (100%)
In 2022, the Digital Economy Development Center LLP, together with Kazakhtelecom JSC, took measures to develop the labeling and traceability of goods in the Republic of Kazakhstan.
In 2022, work continued on mandatory labeling of tobacco products and footwear. In the second half of 2022, mandatory labeling of some pharmaceutical products was launched, and pilots were conducted on the product groups “Furs,” “Clothing,” and “Jewelry”.
In order to develop new lines of business, Digital Economy Development Center LLP began to develop and implement new ICT services in the B2B segment in 2022: Commercial marking in the corporate segment, National Goods Catalogue.