Uzbek capital becomes 4G testing ground

By bne IntelliNews September 3, 2010

Clare Nuttall in Almaty -

Uzbekistan's capital Tashkent has become the first city in the world where two 4G mobile networks have been launched simultaneously.

The local subsidiary of Russia's Mobile TeleSystems (MTS) announced on July 28 that it had launched the first commercial 4G network in the Commonwealth of Independent States (CIS). MTS Uzbekistan got its licence to operate in the 2.5-2.7 GHz frequency range in October 2009, and has now set up its network based on the LTE (Long-Term Evolution) standard in central Tashkent.

Just days later, Uzbekistan's second-largest mobile operator Coscom, a 98% owned subsidiary of Sweden's TeliaSonera, also set up a trial LTE network in Tashkent. The company, which operates under the Ucell brand, received its 4G licence in July 2010. A spokesperson for TeliaSonera tells bne there had been "a lot of interest" in the technology. "Ucell will be the knowledge accumulator and test ground in this region," says the spokesperson. "We will limit our network to Tashkent until we have launched the services commercially, and then, when the demand has grown sufficiently, we will consider other big cities in Uzbekistan."

Miles apart

Scandinavia, the home of cutting-edge mobile technology, was the first place where 4G services were piloted, with TeliaSonera launching 4G networks in central Stockholm and Oslo in December 2009. Since then, the company has been followed by Vodafone, Verizon and O2 in selected cities in Germany, the US and the UK respectively.

Tashkent is many miles away - both literally and in terms of economic development - from the high-income cities of Western Europe and the US where the technology is being rolled out. However, MTS considers there is high potential in developing markets such as Uzbekistan, which have a relatively low level of fixed broadband penetration. "Development of next-generation networks is the main area of our company's growth, especially in regions with low levels of penetration of fixed broadband internet access," says a spokesperson for MTS. "By operating an LTE network in the Uzbek market, we can offer both corporate and private clients in the region reliable high-speed broadband Internet access."

Following the Tashkent launch, MTS plans to test LTE technology in other CIS markets such as Armenia and Ukraine.

According to telecoms consultancy BuddeComm, there were 16.5m mobile subscribers (almost 60% of the population) in Uzbekistan in early 2010, up from just 600,000 five years before. There has been a similar rapid spread of mobile adoption across Central Asia, with penetration fast approaching 100% of the population in Kazakhstan.

But while Uzbek consumers are being offered the latest in mobile technology, other Central Asian markets are lagging behind. The launch of 3G in Kazakhstan has been long delayed because the frequencies required are held by the military. Mobile operators are now in a dispute with the authorities, who want to charge higher licensing fees than operators say the market will bear.

In Tajikistan, telecom companies face problems from another quarter. In several speeches over the last few months, President Emomali Rakhmon criticised the use of mobile phones, which are widely used since fixed-line services only reach around 5% of the population, on the grounds they are a "health risk." A move to ban advertising by mobile companies was later abandoned, but the government is now reportedly considering a new tax on mobile services.

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