Coming into 2016 the Uzbekistan telecom sector was looking to make a fresh start after the difficulties of the 2012/2014 period. MTS Uzbekistan, the number one ranked operator that had its licence revoked back in 2012, had re-entered the market and was already playing an active role again. Operating as Universal Mobile Systems (UMS), the former MTS was now in a joint venture with the government. There was no doubt that the return of MTS was improving the outlook for the local mobile and mobile broadband market. The telecom sector was already benefiting from the increased competition coming with an experienced player using its existing network and knowledge. Meanwhile, in another move that could boost the market, Uzbektelecom’s mobile unit Uzmobile had launched a GSM service to add to its existing CDMA network; the reinvigorated player was threatening to be a bigger presence in the market as a result.

By early 2016 there were almost 24 million mobile subscribers. This represented a penetration of 80%, still a relatively low penetration by general standards applicable to the developing markets across the region. Despite the positive signs for growth, however, the reality is that a poor business environment remains in place; this has the potential to choke investment and as a result limit the growth of the telecom sector.

While the Uzbekistan’s internet market has certainly been growing, especially over the last decade, actual internet subscriptions have remained limited for the majority of the country’s population. Fixed broadband subscriptions in particular were small in number. By early 2016 internet user penetration had reached an estimated 48%. This was well up from the 2005 figure, when internet user penetration stood at just over 4%. It should be noted that internet subscriptions are relatively small compared to the number of users. While there were only 800,000 fixed broadband subscribers by the start of 2016, there were more than 16 million mobile broadband subscribers by that stage.

In the meantime, the corruption scandal surrounding TeliaSonera and Vimpelcom was still being played out coming into 2016. Vimpelcom had made some concessions and the overall situation was looking closer to resolution by that stage. TeliaSonera has indicated its intention to exit the partnership with Vimpelcom and looking to sell its 33% stake in the business.

For more information see – Uzbekistan - Telecoms, Mobile, Broadband - Statistics and Analyses