ON THE RESULTS OF THE ANALYSIS OF THE APDC MOBILE SERVICES MARKET

In accordance with the work plan for 2023, the agency has completed an analysis of the state of competition in the mobile services market in order to determine the level of competition and develop measures aimed at eliminating barriers to entry into the relevant commodity market.

            Currently, the mobile market is highly concentrated and has a large part due to state intervention. Kazakhtelecom JSC has a duopoly with subsidiary mobile operators Kcell JSC, MT-s LLP (Tele2/Altel), which has 63% of the market share, the share of the private operator KAR-Tel LLP (Beeline) is 37%.

           Without taking into account the comments and suggestions of the agency, the auction conducted by the Ministry of digital development on the distribution of radio frequencies for the right to provide mobile communication services in the 5G network led to an increase in the monopolization of the market (the winner of the auctions was the group of companies of Kazakhtelecom JSC, which secured a 100% monopoly in the 5G network).

           The predominance of the quasi-public sector has led to a decrease in the level of competition, as well as a decrease in competition for the client between telecom operators and maintaining prices at the same level. As a result, there is a sharp increase in complaints about price increases, the quality of communication and internet services.

           Telecom operators explain the rise in prices by an increase in the volume of investments in the support and development of the network. However, according to the data obtained, there is a trend towards a decrease in the volume of investments in dynamics, for example, in 2021 compared to the previous year, the decrease was -20%, in 2022 -30%. At the same time, the investment opportunities of mobile operators are growing (+11.5% in 2022 compared to last year), as well as profit in dynamics (+21% in 2022).

           Also, during the analysis, the agency identified barriers that affect the development of competition when entering the market of mobile services and receiving radio frequencies (the presence of conditions in the NPA that limit competition; imperfection of the RFP distribution system; access to infrastructure and resources). On these barriers, relevant recommendations were sent to the CDIAP on taking measures aimed at eliminating them and ensuring the development of competition in the industry.

The analysis can be read in more detail here.