Telecom, Media & Technology industry | Uzbekistan

Uzbekistan’s Telecommunication, Mobile and Broadband markets overview

Uzbekistan Government has been transforming TMT sector gradually by giving national priority to develop Information & Communications Technologies (ICT) sector. As a result, there is a positive trend in investment in infrastructure, expanding subscriber bases and rising revenues. Within a framework of National Development Strategy of Uzbekistan for 2017-2022 there is a strategy for development of TMT sector. The Government plans to transform national operator Uzbektelecom and privatize it, that will have positive effect on market competition.

MOBILE MARKET

Uzbekistan’s mobile market is relatively developed on other TMT sectors comparison. It has experienced slow to moderate growth over the last five years. Mobile penetration has increased from 71% in 2012 to 81% in 2017 and the market reached 24.66 million mobile subscribers. Moderate growth is predicted over the next five years to 2022 due to the fact that market is becoming mature. Mobile subscriber market penetration is expected to reach 87% by 2019 and 94% by 2022, with the market estimated to grow at a CAGR of 4.4% between 2017 and 2022. The market is predicted to reach 30.6 million mobile subscribers by 2022.

Main players in the Mobile segment of TMT industry are Beeline (VEON Group), Ucell (Telia Group) and UMS (formerly owned by MTS, but currently state-owned) that are in total account for 96% of subscriber base.

MOBILE BROADBAND

Uzbekistan has seen a very rapid increase in mobile broadband penetration over the past 5 years with market penetration increasing from 20% in 2012 to 62% in 2017, driven by a rising level of mobile subscribers. However, the mobile broadband market is still at an early stage of development. Very strong growth is predicted over the next five years to 2022.

Beeline first launched 4G LTE services in the capital, but prohibitively high pricing initially limited takeup. By 2017 the company was looking to ensure that 4G is no longer a ‘premium service’ for subscribers, with the operator having lowered its prices and launching new promotions for 4G users. In 2017 all other biggest operators (Ucell, UMS and Uzbektelecom) have also launched commercial usage of 4G internet and have been increasing the coverage.

FIXED LINE

The fixed line market in Uzbekistan remains not significantly developed. A major reason for this is due to the dominance of the mobile segment. Overall penetration increased from 6.9% in 2012 to 12.3% in 2017.

There was significantly strong growth during the 2014 to 2017 time-period. The market is predicted to grow strongly over the next 5 years to 2022. Fixed line penetration is predicted to reach 15.4% by 2022.

The penetration of Internet users in Uzbekistan remains low compared to other developed Asian nations however has grown very strongly over the past five years from 24% in 2012 to 51% in 2017, driven by strong growth in mobile broadband. Moderate to strong growth is predicted over the next five years as the penetration of mobile broadband is predicted to continue to increase.

The internet access remains limited for the part of the country’s population, more than 60% of whom lived in rural areas. The highly competitive ISP market had resulted in a fall in access prices and the provision of flexible packages. The introduction of prepaid internet has also contributed to the rise in home internet usage. However, prices remain relatively high due to the expensiveness of external channel price for which Uzbektelecom sells to ISPs.

Fixed broadband penetration in Uzbekistan remains low mainly due to a limited number of fixed lines and the dominance of the mobile platform. The market has grown exceptionally strongly over the past five years from a very small base with penetration increasing from 0.8% in 2012 to 10.8% in 2017. Over the next five years to 2022 strong growth is expected to continue driven by rising fixed line penetration. Fixed broadband penetration is predicted to reach 20.6% by 2022 with a CAGR of 15.2% predicted for the 2017 to 2022 time-period.