Kazakhtelecom is to be sold in a public share offer as part of a broader privatisation plan covering 65 state-owned companies. In the meantime, mobile leader Kcell has finally received approval for a 4G licence, breaking the incumbent’s monopoly on high-speed mobile services.
Incumbent Kazakhtelecom (KASE:KZTK) is set to be sold via a public share offer within four years as part of a broader privatisation plan, the Kazakh government said today.
The telecoms firm was mentioned in an Economy Ministry document that also named state-owned oil firm KazMunayGaz, airline Astana, railway firm Kazakhstan Zemir Zholy, electricity group Samruk-Energo and uranium miner Kazatomprom as among the other 65 companies to be sold-off, reported Reuters.
Sweden’s Tele2 (STO:TEL2), which in November agreed to merge its local mobile assets with those of the incumbent’s 100% owned cellco Altel, was not immediately able to comment on the likely impact of the privatisation.
Concurrently, market leader Kcell (KASE: KCEL) announced today that it has won two blocks of 10MHz spectrum in the 700/800 MHz band, at a cost of KZT22bn (US$64m). It will pay the fee in two tranches: KZT10bn (US$29m) by 1 March 2016 and KZT12bn (US$35m) by 1 December 2016.
The Ministry for Investments and Development will also allocate Kcell two blocks of 10 MHz in the 1700/1800 MHz band, for a fee of KZT4bn (US$12m) by 1 February 2016.
In January 2014, former CEO Ali Agan was cited saying that his company was still awaiting news on when it would be able to secure a 4G licence.
Until now, incumbent Kazakhtelecom has held the country’s sole 4G licence.
In today’s statement, Kcell said the ministry would allocate LTE-suitable spectrum to all existing mobile operators – VimpelCom’s Beeline subsidiary is the number two player, while Tele2 has agreed a mobile joint venture with Kazakhtelecom to create a stronger number three cellco with 22% of the market – and allow them to re-purpose existing GSM, DCS-1800 and UMTS/WCDMA spectrum for LTE.
Operators must then guarantee mobile coverage of communities with 500 or more inhabitants and along highways and railways of national and regional importance by 31 December 2020.
Sweden’s TeliaSonera (STO:TLSN) is planning to sell its 61.9% stake in Kcell as part of its planned Eurasian exit, a process being run by Renaissance Capital. Kcell is majority held by Fintur, a joint venture between TeliaSonera and Turkcell, which in November said it planned to make a non-binding offer to buy out its Swedish partner.
Kazakhstan has a population of 17 million, according to the World Bank.
