Executive SummaryThis report looks at twelve of the developing countries of Asia.Armenia’s telecommunications sector is small but growing.
The level of investment in infrastructure and new services is on the increase, as the country builds on almost 600,000 fixed lines in service, together with 250,000 mobile subscribers, for a population of around 4 million people.
Total investment in the sector was expected to reach US$64 million in 2005.
Major structural issues still need to be addressed before the telecommunications sector can make real progress.
One of the concerns is that Armenia’s national telecom provider, ArmenTel, has a monopoly on all telecommunications services in the country until 2013.
Azerbaijan continues to work at overcoming numerous problems as it moves forward in its effort to develop the telecommunications sector.
Poor quality infrastructure has been an ongoing problem.
Less than half the telephone lines in the country are digital.
The monopoly held by the Ministry of Communications, among other things, results in the high cost of satellite connections.
As well as being a commercial operator through its role in AzTelecom, the ministry is the policy-maker and regulator for telecoms in Azerbaijan.
The country’s significant dependence on international funding also makes it difficult for any long-range planning in the development of the sector.
Bhutan, a country that somehow preferred to remain isolated from the world, has very recently started to improve its telecommunications capability.
To do so it has had to overcome the country’s mountainous landscape.
Whilst the country had a basic connection to the outside world as early as 1974, with the introduction of trunk calls between Bhutan and India, it was not until 1999 that television, satellite dishes and Internet services started to appear.
The tiny country proceeded to invest heavily – to the tune of around US$27 million - in telecommunications infrastructure between 1996 and 2002 to provide the country with a modern fixed line network.
In late 2003, a mobile service was launched by Bhutan Telecom.
Georgia, continues to be held back in its economic development by poor telecommunications infrastructure.
The network remains heavily analogue with only a minor proportion of digital lines and teledensity is particularly low in rural areas.
A significant injection of capital is desperately needed if the country’s telecommunications sector is to stabilise and expand.
The overall economy has continued to struggle, despite increased commercial activity and some stronger economic growth figures.
A number of political crises have added to the uncertainty in the country, at least in the short term.
Kazakhstan, with a fixed-line penetration of around 16%, has a reasonably strong telecom sector by regional standards.
This is despite the generally poor state of much of the country’s infrastructure - only about 55% of the national network is digital.
National operator, Kazakhtelecom, has launched a program to modernise the country’s telecommunications system.
There is a high unsatisfied demand for telephone services in the country.
This has seen mobile telephone services boom, with annual subscriber growth running at 90% coming into 2005.
The mobile market has jumped from 67,000 subscribers in 1999 to 2.8 million subscribers by the end of 2004.
And at the same time, although Internet penetration is low (2%) at present, there is growing interest in going online.
Kyrgyzstan, having followed a disciplined program of economic reform and moved steadily into a market economy, has achieved high growth in GDP in recent years, as well exhibiting other measures of a healthy and stable economy.
As a consequence of this, the country has been attracting strong foreign investment and considerable economic and technical assistance of various types.
The resulting benefits have flowed to the telecoms sector, which is being restructured in the final phase of Kyrgyzstan’s wider privatisation program.
The country still has a teledensity of only 8%, however, and much work remains to be done in sectoral reform and infrastructure building.
The Maldives boasts an efficient, up to date telecommunications system.
Dhiraagu, the country’s monopoly telco, has worked hard to ensure that there is now full telephone service coverage of the archipelago.
As well operating the fixed-line network, the company also operates a mobile service and is an Internet Service Provider (ISP).
Dhiraagu’s monopoly runs out in 2008, but the government has signalled that it is keen to open up the market earlier than that.
This is expected to happen progressively.
The licensing of a second ISP in 2002 showed that the government was already moving on in this direction.
In late 2004, a second mobile licence was also issued to Wataniya Telecom, as the government took the first major step towards removing the Dhiraagu monopoly.
Mongolia is committed to developing a more efficient telecommunications network as an integral part of it push towards a market economy.
Despite the country having confirmed this commitment by implementing reforms to encourage growth in the telecom industry, the sector still needs further expansion if is to help boost economic growth.
An explosion in the mobile market has seen a huge jump the number of subscribers.
By early 2005, there were 400,000 mobile subscribers in the country.
The mobile penetration had reached 15%, up from less than 2% at the end of 2000.
Nepal’s telecommunication services have been growing steadily over the last decade.
Positive regulatory changes in the telecom sector have been implemented, including the incumbent telco losing its monopoly status in the market.
However, the supply of telephone service has not been able to keep up with a growing demand.
An estimated 50% of demand for telephones remains unmet.
The biggest challenge has been in providing rural services.
This area has been neglected as the level of investment over recent years fell well short of what was required for the rural sector.
More than 60% of telephone services are concentrated in the capital Kathmandu.
At the same time, more than 50% of villages still have no telephone access at all.
A further complication in the development of the sector has been the widespread insurgency by Maoists rebels.
Tajikistan, another of the nations that emerged from the former Soviet Union, has a telecommunications network that is arguably the least developed of all those countries.
The network is tiny, providing service to a subscriber base that represents a teledensity of less than 4% coming into 2005.
And, of particular concern, less than 10% of the Tajikistan network is digital.
However, having inherited a telecommunications system that was near total collapse, the government has started the task of bringing it up to modern standards The poor state of the country’s telecommunications services has certainly had a negative impact on business and government.
Other factors inhibiting development of telecommunications in Tajikistan are the scarcity of investment capital and an acute shortage of skilled personnel.
One positive sign amongst the gloom is the opening up of the mobile telephone market.
Turkmenistan is yet another of the nations that emerged from the former Soviet Union with a relatively underdeveloped telecommunications sector.
Unfortunately the country has not been able to build up its telecom infrastructure to any degree.
Since the mid-1990s, Turkmenistan has been stagnating with around 8% fixed-line teledensity and has not been able to add to what should have been a reasonably good base.
At the same time its infrastructure is predominantly analogue and the program to upgrade existing equipment to digital has also been lagging.
Regulatory reform is much needed, the Ministry of Communications continuing to play to great a role in the sector.
In the wider economy, the country has suffered from poor progress in developing the private sector and continuing centralised state control over most economic activities.
These factors have impacted negatively on development of telecommunication services.
Turkmen Telecom provides fixed-line services and Barash Communications Technologies Inc is the country’s mobile operator.
Uzbekistan, has been struggling to bring its telecommunications system up to the standard found in developed countries.
With less than 2 million telephones at the end of 2004 for a population of almost 26 million, the country suffers from outdated and poorly maintained analogue equipment.
The network is only 35% digital.
In 1996, in what was seen as a landmark decision, the government started inviting foreign telecom companies to invest in Uzbekistan in their own right.
This was followed by the creation in 2000 of Uzbektelekom, a holding company charged with operating the national telecommunications network.
Whilst this was obviously the first step towards privatising the sector, the government has been moving slowly along this path.