Category Archives: Central Asia & South Caucasus News

VimpelCom says that price inflation boosts profit in Uzbekistan

TASHKENT, NOV. 3 2016 (The Conway Bulletin) — Russian telecoms operator VimpelCom said revenues in Uzbekistan grew 5% in Q3 2016, compared to the same period in 2015 because of a new pricing mechanism and underlying inflation.

In Uzbekistan, VimpelCom started to link its mobile charges to the US dollar, after volatility in the Uzbek sum hit the company’s revenue stream. This pushed up mobile and data prices plans across the country. It said that average user revenue had risen by 14%.

Tougher competition, however, shrank the customer base of Vimpel- Com’s Beeline brand in the country.

“The Uzbek market continues to experience intense competition, however Beeline remains the leader.

The overall customer base decreased 6% to 9.6m, due to the launch of two new mobile operators in 2015,” the company said in a statement.

Subscribers numbers had fallen below 10m at end-2015, a 3-year low. Earlier this year, VimpelCom paid a fine of $795m after it admitted paying bribes in 2007/8 to access the Uzbek mobile market.

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(News report from Issue No. 303, published on Nov. 4 2016)

Uzbekistan Airways to start flights to London

NOV. 1 2016 (The Conway Bulletin) — State-owned Uzbekistan Airways said it will start a short term direct connection to London Heathrow in December. The twice weekly flights will run from Dec. 9 to Dec. 20. This seems to be an attempt to test the feasibility of a renewed and stable connection to Europe’s financial capital, after direct flights became inconstant over the past decade.

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(News report from Issue No. 303, published on Nov. 4 2016)

Turkmen President visits Putin

NOV. 1 2016 (The Conway Bulletin) — Turkmen President Kurbanguly Berdymukhamedov met with his Russian counterpart Vladimir Putin in Sochi during an official visit aimed at improving economic and trade ties. After a legal spat, Turkmenistan and Russia stopped trading gas, an important revenue stream for the Central Asian country. Mr Berdymukhamedov’s visit signals a potential rapprochement between the two countries.

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(News report from Issue No. 303, published on Nov. 4 2016)

Kyrgyzstan’s government coalition collapses

BISHKEK, OCT. 24 2016 (The Conway Bulletin) — Kyrgyzstan’s four-party coalition government collapsed after the Social Democrats withdrew their support for it, citing irreconcilable differences with their partners.

The break-up of the coalition ended Sooronbay Jeenbekov’s six month term as PM and forces parliament to try to patch together a third government in 2016. It also comes at a sensitive time for Kyrgyzstan’s young parliamentary democracy with only six weeks to go before a bitter and divisive referendum set for Dec. 11 on whether to boost the powers of the PM.

“We tried to keep the coalition, but the recent actions of certain individuals, now our former partners, exposed the problems,” a statement from the Social Democrats said. “We cannot be in coalition with those who are associated with the common interests of Akayev and Bakiyev and those who go against the national interests over constitutional reforms.”

References to Askar Akayev and Kurmanbek Bakiyev were to Kyrgyzstan’s two former presidents who were overthrown during revolutions in 2005 and 2010.

The Social Democrats are the party of President Almazbek Atambayev and he immediately charged them with forming a new government.

This will be difficult. The Social Democrats hold 38 of the 120-seat legislature and will have to make deals with some of the five other parties to patch together a government. If it fails, Mr Atambyaev will have to turn to another party to form a government or be forced to call a parliamentary election.

The collapse of the government underlines just how fragile Kyrgyzstan’s parliamentary system is. Mr Jeenbekov was Kyrgyzstan’s sixth PM since constitutional changes in 2010 shifted power from the presidency to the PM.

Emil Joroev, a professor of Political Studies at the American University of Central Asia, said that the weak and short-lived governments were making Kyrgyzstan increasingly unstable.

“The collapse of the ruling coali- tion, and the corresponding fall of the government underscores the fragility of inter-party agreements the tendency of divisive single issues to trump over larger, encompassing development agendas, and the ease with which partners in a ruling coalition have been able to break it with no real accountability,” he said.

People in Bishkek had differing views on the collapse of the latest government. Some were frustrated but others just shrugged.

“We are not tired of changes, we are now used to seeing it this,” said Samat Joldoshbekov, 23.

The December referendum on extending the powers of the PM is controversial because opposition groups have accused Mr Atambayev of trying to take power by stealth.

The current constitution bars Mr Atambayev, 60, from standing in a presidential election next year but does not stop him from becoming PM later, a move that his opponents say he is planning.

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(News report from Issue No. 302, published on Oct. 28 2016)

Kazakh C. Bank says rate cut likely

OCT. 27 2016 (The Conway Bulletin) — In an interview with the FT, Kazakh Central Bank chief Daniyar Akishev said that inflation had slowed to under 12% and that GDP growth would measure around 0.5% this year. He also said that it was likely there would be another interest rate cut before the end of the year, another signal that the Central Bank’s confidence in the economy has strengthened after a rocky 2015.

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(News report from Issue No. 302, published on Oct. 28 2016)

Kcell’s Q3 revenue drops 13.6% in Kazakhstan

ALMATY, OCT. 21 2016 (The Conway Bulletin) — Kcell, Kazakhstan’s largest telecoms operator, posted a 13.6% drop in revenues for Q3 compared to the same period in 2015, blaming it on tough economic conditions.

Arti Ots, Kcell’s CEO, said, though, that the Kazakh economy now appears to show signs of a timid recovery.

“Kazakhstan has started to see some encouraging signs of macro recovery, with an increase in oil prices. There have also been some signals that consumer price inflation is easing and currency levels are stabilising,” Mr Ots said in a statement.

Kcell’s quarterly revenues, which stood at 36.9b tenge ($111m), were up compared to Q2 but still lower than 2015. The tenge lost 50% of its value in the second half of 2015, destroying people’s confidence in the economy.

Still, Kazakhstan’s competitive telecoms market remains tough.

“We delivered a second successive quarterly increase in service revenue and reported net growth in our subscriber base, although the economic and market environment remained challenging and we saw further year- on-year declines in revenue and profit,” Mr Ots said.

Fierce competition and price cutting have characterised Kazakhstan’s telecoms market recently.

Kcell’s subscribers grew by 1% from January to 9.9m, still below the near 11m that the company had serviced, and expenditure per subscriber declined. In Q3, the average user spent less than 1,200 tenge ($3.6) per month, down 2.7% from last year.

Sweden’s Telia Company owns a 62% stake in Kcell. It wants to sell off its assets in Central Asia after a corruption scandal involving its unit in neighbouring Uzbekistan.

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(News report from Issue No. 302, published on Oct. 28 2016)

Turkmen President agrees to pardon prisoners

OCT. 27 2016 (The Conway Bulletin) — Turkmen president Kurbanguly Berdymukhamedov agreed to pardon 1,523 jail inmates to celebrate the 25th anniversary of independence from the Soviet Union. Mass amnesties for major events are fairly commonplace in Central Asia. Amnesties are also used as a way of relieving overcrowding.

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(News report from Issue No. 302, published on Oct. 28 2016)

Kazakh citizen to face trial for fighting in Ukraine

OCT. 24 2016 (The Conway Bulletin) — A court in Aktobe, north-west Kazakhstan, started hearing the trial of Maksim Yermolov, a Kazakh citizen of Russian ethnicity, for fighting alongside Russia-backed separatists in eastern Ukraine. He was arrested in Feb. 2015 after returning from Ukraine’s Dontesk region. Kazakhstan has a sizable Russian population in the north of the country and has always worried that many would prefer to separate from Kazakhstan and join Russia.

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(News report from Issue No. 302, published on Oct. 28 2016)

Turkey woos Tajikistan

OCT. 21 2016 (The Conway Bulletin) — Turkish foreign minister Mevlut Cavusoglu travelled to Dushanbe for a meeting with his Tajik counter- part Sirojiddin Aslov. Diplomatic sources told media after the meeting that the two ministers had signed a deal to promote their political and cultural relations. Turkey has been paying more attention to its relations with friendly Central Asian and South Caucasus countries since it shot down a Russian fighter- jet over Syria last year.

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(News report from Issue No. 302, published on Oct. 28 2016)

InfiNet to launch WiFi in Kazakh trains

OCT. 27 2016 (The Conway Bulletin) — Malta-based Russian telecoms service company InfiNet Wireless said it agreed a deal with Kazakhstan Temir Zholy, the national railway operator, to launch an onboard wireless service in Kazakhstan. InfiNet has already launched a pilot project on the segment between Astana and Borovoye, in the north of the country.

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(News report from Issue No. 302, published on Oct. 28 2016)