Mobile operator Kcell, a subsidiary of Kazakhtelecom (KT), is determined to bid in Kazakhstan’s secondary auction of 5G mobile frequencies – hoped for by early 2024 – despite indications that KT group companies could be blocked from participating by state authorities, a company executive announced at the Telecom Eurasia 2023 forum in Almaty. Russian news provider ComNews – the backer of the Telecom Eurasia event – quotes the director of Kcell’s department for government interaction Askar Kishkembaev as stating: ‘Our principled position is to allow us to participate in the auction. And if [the government] still do not allow us, we reserve the right to disagree with this.’ TeleGeography’s GlobalComms Database notes that sister operators Kcell and Tele2-Altel under the state-backed KT group jointly won Kazakhstan’s first 5G 3.5GHz licence auction in December 2022, with rival Beeline Kazakhstan placing no bids, although a would-be new entrant backed by local conglomerate Freedom Holding was later confirmed as participating, with Freedom’s CEO declaring in July 2023 that the group intended to launch a 5G-based venture, whilst the national antimonopoly regulator recommended to the government that existing 5G spectrum owners should be restricted regarding upcoming spectrum contests.

ComNews’ report cites the president of Kazakhstan’s National Telecommunications Association Asylbek Khairushev highlighting that the second 5G auction is threatened by potential delays due to the question of whether or not to exclude the KT group, an issue which Khairushev said is currently ‘being discussed at the level of the highest offices.’

For a separate reason Askar Kishkembaev spoke in favour of postponing the second auction – due to the government tightening deadlines for deployment of nationwide 5G network services, after recent statements by the President of the Republic Kassym-Jomart Tokayev indicated plans to reach nationwide coverage by end-2025 despite the terms of the first auction stipulating end-2027 as the expected timeframe. Mr Kishkembaev explained: ‘At the IT forum Digital Bridge-2023 [held on 12 October 2023 in Astana] the head of state announced that this project should be completed before [end] 2025. Nobody asked us – we can, we can’t, what business cases and models we developed for these projects. Now each cellular operator – both Tele2 and Kcell – must deploy 3,500 5G base stations throughout Kazakhstan by 2025. And we laid down certain internal plans and business cases for these tasks. This [is] additional huge money that mobile operators must invest in the industry.’

The Kcell director also put forward further arguments against blocking KT subsidiaries from the next 5G auction: ‘We occupy a dominant position, but we are not monopolists. A dominant position, takingaccount the rules of competition, takingaccount the business code in the market, is permissible. And only if an appropriate analysis of the product market shows that we abuse our dominant position … then such initiatives [to block a 5G bid] can be introduced. But to date this has not been established.’

Note that the ongoing arguments over 5G bidders will be influenced by recent indications that KT is likely to sell either Kcell or Tele2-Altel in the near-term, as reported in July by Commsquoting Kazakh Minister of Digital Development Bagdat Musin.