DEC. 5 2013 (The Conway Bulletin) — Apparently unconcerned about potential nepotism allegations, Temir Zholy, Kazakhstan’s national railway company, appointed Nurali Aliyev, the 28-year-old grandson of Kazakh President Nursultan Nazarbayev to be the CEO of TransTelecom, one of its subsidiaries. AO TransTelecom owns mobile communication infrastructure.
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(News report from Issue No. 164, published on Dec. 11 2013)
NOV. 27 2013 (The Conway Bulletin) — The World Bank’s IFC is considering a loan to Britain’s Virgin Media to help it enter a clutch of new markets — including Kazakhstan — media reported.
Virgin Media’s main shareholder is the flamboyant entrepreneur Sir Richard Branson and its potential entry into Kazakhstan should be equally colourful.
All this is good news for Kazakhstan’s mobile sector, currently dominated by a joint-venture between Sweden’s TeliaSonera and Kazakhtelecom and another joint-venture between Russia’s VimpelCom and a private Kazakh company, and its growing hoard of mobile users.
It also groups Kazakhstan with more traditional emerging markets such as Turkey, Poland and Russia.
Kazakhstan’s mobile phone sector has been growing fast and looks set to continue to grow. Mobile phone penetration is rising rapidly in Kazakhstan — recent figures put the rate at 130%. Like other emerging markets, mobile phones have become the must-have accessory for the upwardly mobile, if that is the correct term.
BeMyMobile ltd, controlled by Virgin Mobile Central & Eastern Europe, officially applied to the IFC for the loan. If the bid to the IFC is successful, Virgin will expand as a provider of wireless services into Poland and Turkey first and will prepare to break into the Russian and Kazakh markets. It wants to be a so-called virtual provider. This mean that it won’t build any new infrastructure but repackage existing deals.
Virgin Media signed a Memorandum of Understanding with Kazakhtelecom during British PM David Cameron’s visit to Kazakhstan at the end of June.
If Virgin media does enter Kazakhstan it may also offer other services such as internet and satellite television, similar to its current operations in Britain.
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(News report from Issue No. 163, published on Dec. 4 2013)
DEC. 3 2013 (The Conway Bulletin) — The authorities in Uzbekistan ditched a tax evasion investigation into Russian telecoms company VimpelCom and its brand Beeline. Pressure had been building on VimpelCom throughout the year. Earlier in the year, VimpelCom’s Russian rival MTS quit Uzbekistan after tax evasion charges were levied.
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(News report from Issue No. 163, published on Dec. 4 2013)
NOV. 27 2013 (The Conway Bulletin) — The World Bank’s IFC is considering giving Britain’s Virgin Media a loan to help it expand into a group of emerging markets including Kazakhstan, media reported. Virgin Media signed a memorandum of understanding with Kazakhtelecom earlier this year.
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(News report from Issue No. 163, published on Dec. 4 2013)
DEC. 3 2013 (The Conway Bulletin) — Tax inspectors in Uzbekistan have surprised observers by apparently pulling back from prosecuting Russia’s VimpelCom for tax evasion.
A report by the Russian news agency RIA-Novosti quoted a source from the Uzbek tax committee as saying that a two-month long investigation had found no violations.
“The inspection is complete. The company has received a resolution with some criticism but no violations of the tax legislation have been found,” an unnamed source at the Uzbek tax authorities told RIA-Novosti.
This will come as a relief to VimpelCom executives who must have feared at one point that they would be going the way of their Russian rival MTS which had to quit Uzbekistan earlier this year after a similar tax case ended in charges.
VimpelCom operates in Uzbekistan under its Beeline brand name. With roughly 55% of the country’s 19m mobile users, it is the largest mobile provider in Uzbekistan.
No details of why tax inspectors dropped the case against VimpelCom have been released.
No doubt there were behind-the-scenes negotiations between VimpelCom and the Uzbek authorities and between Russian and Uzbek officials, but we don’t know the details of what was agreed. Throughout, VimpelCom have denied the charges and said that it is the victim of an elaborate shake-down by the authorities, something they are renowned for.
Regardless, it will be a relief for investors in Uzbekistan generally. They have increasingly complained of Uzbekistan’s difficult business climate.
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(News report from Issue No. 163, published on Dec. 4 2013)
OCT. 25 2013 (The Conway Bulletin) — It was a short message, sent via the WhatsApp and Viber instant messaging systems, but it still had a powerful effect.
On Oct. 25 subscribers to the Beeline brand in Uzbekistan received a message which said the authorities had decided to revoke its licence.
Russian mobile operator VimpelCom owns the Beeline brand which it operates in Uzbekistan through its Unitel subsidiary.
The message, although quickly rejected as a fake by Beeline, sent its clients scurrying to its main rival, Ucell, which is operated by Sweden’s TeliaSonera through the locally registered company COSCOM.
It’s bad timing for VimpelCom which is already facing an uphill battle to survive in Uzbekistan.
Uzbek tax inspectors have launched an investigation into its affairs. It has also run into conflict with the mobile regulators who previously turned down its request to expand its coverage.
Last year, VimpelCom’s main Russian rival MTS left Uzbekistan, complaining of harassment from the authorities.
The fake message and the panic it spread among subscribers would have damaged Beeline just when it needs to appear strong.
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(News report from Issue No. 158, published on Oct. 30 2013)
OCT. 16 2013 (The Conway Bulletin) — Russia signed into law an agreement with the Uzbek government that it hopes will defend Russian businesses in Uzbekistan.
The statement on the Russian government website was vague but also unequivocal. It said simply that the agreement would boost investments between Russia and Uzbekistan.
Uzbekistan has developed a reputation for being a notoriously difficult country for private companies to operate in. Businesses talk of intimidation from the authorities, police raids and unscheduled tax inspections.
Earlier this year Russian mobile operator MTS closed down its Uzbek subsidiary after a series of run-ins with the authorities.
This month VimpelCom, MTS’s main Russian rival, also complained of unscheduled tax inspections by the authorities in Tashkent.
So, the ratification by Russia’s government of an agreement with Uzbekistan to promote and protect each other’s business interests is, at least, timely. Time will tell just how useful it is too.
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(News report from Issue No. 157, published on Oct. 23 2013)
OCT. 17 2013 (The Conway Bulletin) — Kcell, Kazakhstan’s largest mobile operator, added nearly 175,000 subscribers in the third quarter of 2013, the company said. Controlled by Sweden’s TeliaSonera, Kcell now has 14.25m subscribers. The importance of the Kcell data is that it shows the mobile sector in Kazakhstan is still growing.
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(News report from Issue No. 157, published on Oct. 23 2013)
OCT. 15 2013 (The Conway Bulletin) — The authorities in Uzbekistan have started an investigation into alleged tax irregularities at Unitel, a local subsidiary of Russian telecoms operator VimpelCom, the company reported. Last year VimpelCom’s Russian rival MTS, quit operations in Uzbekistan after a similar audit was carried out.
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(News report from Issue No. 156, published on Oct. 16 2013)
OCT. 3 2013 (The Conway Bulletin) — Swedish telecoms operator TeliaSonera demoted an executive for his role in deals made in 2007 to secure an Uzbek 3G licence. Tero Kivisaari was demoted from head of the company’s mobile division. Investigators allege TeliaSonera indirectly paid Gulnara Karimova, daughter of the Uzbek president, for the 3G licence.
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(News report from Issue No. 155, published on Oct. 9 2013)