Katel was the first
mobile operator to be established in Kyrgyzstan
and in its beginning it enjoyed quiet great success.
Can you give us a little bit of history and a little
bit on another view of the structure of company?
I think we should start the history of our company
from 1992, when the vice-president of American
company "Cline's Group" Ross Jucobi
was invited to Kyrgyzstan. He was addressed with
the request to construct here a network of mobile
communication. Simultaneously, he was addressed
with the request to invest the development of
the channels of international communication. In
order to achieve these goals, in 1992 was created
a joint venture, the founder of which became American
part with the control package of stock, "Telecom"
and Ministry of Communication also entered this
enterprise. We have received a general license
for rendering of mobile communication services.
In terms of the shareholding, has the original
structured changed since its establishment?
It hasn't changed almost, because "Kyrgyztelecom"
didn't meet its obligations regarded to replenishment
of the working capital and preferred to leave
this joint venture. Its share was correspondingly
divided between the other shareholders. These
kinds of changes were taken place since our establishment.
The rest of shareholders are the same, but we
still cooperate with "Kyrgyz telecom"
not as a shareholder, but as a national operator.
We have also got a license for foreign investment
to build a land station of satellite communication.
In 1994 was opened a mobile communication and
a land station of satellite communication in Kyrgyzstan,
thanks to what our country had received the first
direct way out to the international network of
communication. In 1998 a competitive company "Bitel"
came to our market. Our company was thinking for
a long period of time about the standards of mobile
communication, according to which we will work.
The great impact on choosing the standard of mobile
communication had a meeting of ministers of communication
of Kazakhstan, Kyrgyzstan, Turkmenistan, Uzbekistan,
Tajikistan and Russia. At that time the migration
of businessmen was very important around these
countries and, of course, they had to be able
to communicate with each other within this territory.
Therefore, the choice was made in favor of American
standard, which is called "AMBS". At
that time the whole Northern and Southern American
continent, part of Africa, Asia and Europe were
working according to this standard. In 1994 a
new European standard of mobile communication
was introduced, which is called "GSM".
I should say, at that time we were already developing
rather successfully. At the moment we are covering
8% of country's territory, where 80% of Kyrgyz
population lives.
You mentioned that between 1997-1998 "Bitel"
introduced the other communication market in Kyrgyzstan.
What has this meant for KATEL? KATEL has some
competitive advantages: like a wider network or
more competitive prices. Perhaps, you can better
tell us: what are Katel's competitive advantages
against its competitor "Bitel"?
I think there are several of those advantages.
The first thing I should note is our good professional
team. We have connected ourselves with the equipment
of "Ericsson" company. In my opinion,
this was the right choice. There are many producers
of mobile equipment, but the company which was
successful at that time and still remains successful
is "Ericsson". As "Ericsson"
says, their equipment occupied 40% of all market
equipment. It is, of course, the great number.
I think, sometimes this kind of huge numbers can
render less help. They have high prices until
the moment, when
"Hua Le" entered the market. I would
say, according to my colleagues' opinion, they
have really good equipment and incomparable low
prices. This is the second reason of our choice.
We haven't "betrayed" our company "Ericsson"
and I have just distracted with "Hua Le".
The next advantages of our company are our strong
purpose and some certain advantages of our standard.
"GSM" is fully a digital standard. We
have to have highly-qualified coverage of the
basic issues on the territory in order to get
the quality of GSM standard. Kyrgyzstan is not
a megalopolis like Moscow, Tashkent, New York
and etc., the population of Kyrgyzstan is rather
spread and, therefore, the frequency of the basic
stations is less rarely.
Due to the effect of having some analogue elements
in a standard of "TDMA" we have certain
advantages in comparing with "Bitel".
Consumers can say, "Bitel" can be competitive
to KATEL within the city Bishkek in terms of the
quality of communication, but outside the city
Katel's communication network is more reliable.
This is our development policy. We could have
one station only in Bishkek, because here we get
70%-80% of our whole profit.
In spite of this we are covering the whole Chu
Valley, 60% of the
Issyk-Kul oblast, some regions of Osh and Jalal-Abad.
We are still operating in these regions. At the
moment we understand perfectly that we can't get
any profit and benefit from it, but we do it in
order to improve the quality of our service. These
are the main moments of our strategy and this
is the answer to your question.
What is you current subscribers rate? How
many subscribers does KATEL today have? Do you
see an increment in increasing this subscriber
base?
There are several ten thousands of them. We can
see that our subscriber base and broadcasting
time is increasing every day. Nowadays attracting
of new consumers is based on decreasing of prices.
General profit is also increasing.
Since we are talking about incomes, readers
are interested in the most successful and most
competitive companies in the countries we visit.
For this reason we usually utilize financial figures
in order to show the size and the success of the
company. Considering this, could you give us some
figures in terms of KATEL? Do you see an increase
of income, because the demand is increasing?
Our shareholders have such policy, that the financial
figures of company to be confidential. We can
tell you about some figures that can be derivative.
Last year we have paid to the state budget 1.5
mln dollars as the taxes. We are planning, of
course, to increase our income in connection with
our development.
We were discussing before the item that KATEL
has a wide network covering most of the territory
of Kyrgyzstan, something that "Bitel"
doesn't have. During our meeting with Syikimbek
Turdukulov from "Bitel", his opinion
was that "Bitel" had gained an extra
urge in the market due to the item that they had
heavily invested in the renovating of all their
equipment and network. What are you plans on investing
your technology so that you can increase the amount
of territory covered by KATEL? Are there plans
to invest these aspects so that you can, perhaps,
stay right behind "Bitel" or overtake
it?
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Of course, we are always
developing our network. This year we are planning
to cover two oblasts of our republic: Naryn and
Talas. We are going to increase the coverage of
Jalal-Abad oblast and we are persistently going
on with the expand of coverage in Issyk-Kul oblast.
We are also increasing the quantity of our services.
We already have such services as call forwarding,
call waiting and conference communication. Later
we included to this list a voice mail service. We
have also introduced a new type of service "SMS"
(short message system). Thanks to this service were
added several new services such as information system
with the help of what consumers can get exchange
rates and the latest news in this or that sphere.
With the help of this service we can send messages
from mobile phone toE-mail. Now we are working on
the possibility of getting e-mails to mobile phones.
I should say that we can get SMS messages both within
the local network and international network. We
communicate very often with our New York office
by SMS messages. The number of services is constantly
increasing.
Our plans also include other kinds of technical
plans, which will allow us to provide our consumers
with new technical services.
With regard to our disadvantages, most of the consumers
say that it is the absence of automatic roaming.
We are trying now to provide our subscribers with
this kind of service and we will do it as soon as
possible.
I would say that automatic roaming advantages are
quiet exaggerated. Firstly, there is certain statistics
showing that only 0.4% of subscribers use this service.
Secondly, the automatic roaming for those who have
been already using it costs very expensive and they
just refuse to use it.
Looking a little bit into the future, as you
can see, we have seen the minister of Telecommunication
and Transport, the ciao of "Kyrgyztelecom"
and the state property man , they'd all agreed on
the imminent privatization of "Kyrgyztelecom".
My question is: would KATEL be interested when this
process of privatization takes place and to take
advantage of some of the possibilities that will
be open enough, because with the privatization of
"Kyrgyztelecom" the market will be open
enough. How do you appeal this and where the possibilities
for KATEL? Is KATEL looking to, perhaps, taking
advantages from some of them?
We have received a proposal from a company which
is conducting the tender and now we are studying
the possibility of our participation in this process.
We are a bit embarrassed, because we know very well
the situation in the market. With our small company
we have big problems. We do not want to tie up ourselves
with this big company in Kyrgyzstan, because here
we will have to "play" according to the
rules. In the process of this game there will be
some changes and this kind of changes are not the
subject for reasonable logic.
Nevertheless, KATEL is a small company in comparison
to "Kyrgyztelecom", but still there are
possibilities for joint venture partnership or ,perhaps,
a foreign partner could enter the joint venture
with KATEL. Perhaps, they can venture some of the
possibilities, that the opening up of telecommunication
and, particularly, the six-line services would provide
with the privatization of "Kyrgyz telecom".
What do you think about the possibilities of joining
up with the foreign partner? As foreign partners
always look for a local partner, know the market
and know how to operate it .
The proposal on participation in the privatization
process was received from IFC (International Financial
Corporation) and IBERDI. This is a stabilizing factor.
I think, if we take part in this privatization process,
these partner will be very reliable, who know and
are able to defend their rights.
Speaking about Kyrgyzstan, you've been one of
the main business figures here. You are heading
one of the main companies in Kyrgyzstan. Your opinion
to us is very valuable on how you view the investment
climate in the country. How do you see its developing?
What is your opinion on the investment climate in
Kyrgyzstan? Do you think it's really attracting
investors as much as it could?
Could be additional efforts made?
I think that investment climate here is attractive,
but there are some certain problems which can be
really risky. I would name the corruption among
the biggest risks in Kyrgyzstan. We can see the
results of corruption in many ways. Except the legislation
base we have at the moment, it says that it is not
going to change. For example, in Russia, as far
as I know, with the help of financial institutions
and the World Bank was introduced the mechanism
for fighting against the corruption. This mechanism
is very simple. If an independent committee determines
that in a certain place there is the corruption
, the government pays them out very big amount of
money. I've heard, it is about 200 mln dollars.
However, this is the big sum.
One last question. This is more on personal level.
Could you tell us a little bit about yourself, previous
experience before you entered KATEL? Perhaps, what
do you feel most satisfied since you've been a directing
this company? What are your biggest targets for
the future? How would you like to see KATEL in the
future?
As for me, I was born in 1941. I have graduated
the Moscow University of Communication and Information
Science in 1963. Since this time I had been working
as an engineer of communication in Bishkek. I was
leading several enterprises here. Particularly,
I was a general chief engineer of the inter-city
telephone station and a director of Bishkek telephone
station. Later several oblasts were created in Kyrgyzstan,
and I was a head of the Issyk-Kul administration
of communication and a substitute of the minister
of Communication of Kyrgyz Republic.
Several years I was working as an advisor to the
minister of communication of Vietnam. After my official
trip to Vietnam I worked for the government for
several years and as a mayor of Bishkek city after.
When A. Akaev became the president of our country
he appointed me as a minister of Tourism. I was
the first minister of Tourism of our Republic.
After several years I had returned to the communication
sphere, to my current job in KATEL.
KATEL is known from its beginning as "high
teach". Nowadays there are very swift changes
in sphere of telecommunication and information sciences
and the development went ahead. Mobile communication
also has its own horizon, but we are not going to
change our profile. The third generation of mobile
communication is coming. According to this, I would
like to see KATEL on the top of the technical progress.
Being in my soul more engineer than a politician,
I would better take more participation in the high
technological rigging of KATEL.
Thank you very much. If you want to add something
else, we can cover it. May be a little message to
our readers.
It is very difficult to add something after this
discussion, as the questions that you have asked
highlighted the things rather fully. The most of
the changes were issued before I came to the company
by the previous director. Thanks a lot. |
Mr. Iskakov
S.T 