rus
Issue #4/2015
Z.Dadabaeva
Some problems of Fiber-Optic Communications in Central Asia Countries by the Example of the Republic of Tajikistan. Problems and the Potential for Development
Some problems of Fiber-Optic Communications in Central Asia Countries by the Example of the Republic of Tajikistan. Problems and the Potential for Development
Problems and the potential of competitive telecommunications environment are analyzed; key 1991—2013 public communication figures characterizing communications services market are present. Brief summary of communications services and their further development forecast are given; the list of the leading communications market players of Tajikistan is reported.
Теги: communication agency communication services fiber-optic communication links information and communication technologies telecommunication wireless communication волоконно-оптические линии связи информационно-коммуникационные технологии мобильная связь служба связи телекоммуникация услуги связи
G
lobal economic processes and political changes that occurred in the world in late 20th century led to increased interest in the implementation of new communications, development and implementation of new information and communication technologies. The role of economic activities connected with obtaining and processing of information has grown; possibilities of electronic services provision to the population have increased. These processes also took place in Tajikistan. Geographical features of the country with 93% of mountainous territory have defined specific features of transport routes, communications and telephony development between districts and cities of the Republic. During Soviet times, there were no or very constrained communications in remote mountain regions. During first years of independence there were no economic possibilities to form modern public communications facilities formation. Gradual growth of economics allowed transforming Tajikistan communications into the most developed sector of economics. Material achievements of Tajikistan information and communication technologies market over the past years were reflected in increasing regional competitiveness.
Information and communication technologies are central in modernization and restructuring of all kinds of the Republic’s activities. Implementation of electronic government in the country has been carried out during several years. In 2011 "The Concept of Electronic Government Formation on the Republic of Tajikistan" was adopted; according to representative of RT Communications Service, electronic government will be completely formed by 2025. Nowadays, almost all state administrative bodies have their websites. Alongside with that, according to expert opinion, existing websites differ by structure, nature and quality of content despite the procedure for unified requirements for websites and local area networks of state administrative bodies adopted in 2011. And language versions of the websites in Tadjik, Russian and English are not always synchronized.
Present-day Condition of Information and Communication Technologies in Tajikistan
Present-day information and communication sector has clearly defined services market based on fixed-line, mobile, satellite communications and data transfer via the Internet. Despite dynamically developing telecommunications sector, Tajikistan and its neighboring states – Uzbekistan and Kyrgyzstan – lag behind global trends; this is caused by economic, political and social features of these countries.
Development of electric communications has not significantly changed the use of postal communications in Tajikistan; compared to 1991, only issue of newspapers and journals has decreased (Table 1).
In 90s large Israel investments allowed complete modernization of communications sector in new Tajikistan state. Joint venture of Tajikistan and Netherlands (with private Israel capital) "TojikTel" – first mobile communications operator in Tajikistan – started offering its services in D-AMPS analog standard in Dushanbe since 1996. Up to 2001, this company had sole right to provide mobile communication services in Tajikistan; Israel companies obtained exclusive right for issuance of licenses for equipment installation. One should mention that economic consequences of civil war in Tajikistan held back mobile communications development; alongside with that, later entrance of mobile services operators to Tajikistan market allowed them to use up-to-date equipment. Active development of mobile communications started since 2001, when "Indigo-Tojikston" company was established by MST Corporation (USA) and Aga Khan Fund for economic development. MLT Company (Mobile Lines of Tajikistan) – joint Russian-Tadjik venture was established by "North-West GASM" and "Tojiktelecom" and worked in GSM standard. In 2003, GSM services were introduced even by "Babylon-Mobile" Company with American capital; some other companies appeared on the market. Nowadays, "Babylon-Mobile" is a leading company on the market with its share of 60% of user market.
In 2004, the Ministry of Communications of the Republic started issuing licenses for provision of third generation mobile communication. Russian mobile operators "VimpelCom" and "MegaFon" built first 3G networks in Tajikistan. With the financial support of the EBRD all automatic telephone exchanges have switched to digital format. At this, experts note that Tajikistan was ahead of all the CIS countries regarding implementation of 3G mobile technologies at that time. Thus, "MLT" Company (Mobile lines of Tajikistan)* made it possible to communicate via 3G not only in Tajikistan, but throughout the former Soviet Union for the first time among cellular operators of the Republic in 2005. International experts have repeatedly noted stable possibilities of MLT company for commercial launch of complete UMTS 3G-network. This strengthened the position of the Tajik telecommunication market in the global information environment in the new millennium. In the 3G network coverage area included settlements that lacked even fixed landline communication. Major part of Tajikistan’s population lives in rural areas with limited access to transport services, and mobile communication allows reducing costs and is becoming vital for the full life of the population, functioning and increasing the productivity of small businesses and Dehqan farms. Currently, subscribers of network MLT networks of these districts and cities receive not only traditional GSM-services, but also high-quality multimedia services.
MLT company was the first to test the new technology of the fourth generation – LTE (mobile broadband technology of the fourth generation) with data transfer speeds up to 150 megabits per second; this is 10 times faster than the UMTS networks of third generation and several times faster than the most widespread GPRS / EDGE technology.
According to various sources, at the end of 2013, there were 150—230 million LTE subscribers using the connection of the fourth generation. In April 2014, the first LTE network was launched in Tajikistan. Mobile Internet became available to subscribers of Tcell [1]. The company was formed as a result of the merger of CJSC "Indigo Tajikistan", the shareholders of Central Asian Telecommunications Development BV (CATD) – Dutch company which beneficiaries are TeliaSonera UTA Holding BV and the Aga Khan Fund for Economic Development (AKFED). The fast-growing market of Tajikistan actively uses advanced technologies. In particular, in 2014, Russia’s first full-MVNO mobile operator – Aiva Mobile, launched by OJSC "MTT" and intended for ethnic groups from different countries began active sales. Tariff offers of Aiva Mobile virtual operator offer to use a combination of two active phone numbers – Tajik and Russian in one SIM-card. Both numbers can be used freely in the two countries without roaming, thanks to the intelligent routing technology from MTT; calls to both numbers can come from the two countries at "domestic" tariffs.
In such a way, the competitive mobile market has developed in the zero years due to active work of the Chinese company ZTE, Russian "VimpelCom" and "MegaFon", Swedish TeliaSonera, "Indigo Tojikston" company with the participation of American capital. Analysis of the development of information and communication technologies shows that providing the transparency of information on all cellular GSM operators and companies – monopolists of fixed communications, operating in Central Asia, Tajikistan with five companies could go after regional leadership.
Legislative regulation of competitive environment and review of services scope development
In 2002, the Law "On Telecommunications’ regulating telecommunications sector in Tajikistan was adopted. In November 2003, the State Strategy "Information and Communication Technologies for Development of the Republic of Tajikistan" was approved; it defined the main organizational, economic and financial mechanisms for the development of this segment of the infrastructure. It also emphasized the strategic directions for the formation of information technologies. Measures to address the growing "digital gap" in the country, the region and the CIS with the aim of decent integration of Tajikistan into the global information community were provided.
In addition to this strategy a number of legal documents relating to information and communication technologies were adopted. "The program of information security of the Republic of Tajikistan", the program "Development and implementation of information and communication technologies in the Republic of Tajikistan", the program "Application and development of information technology in the Tajik" and the program "Transport telecommunication networks in the Republic of Tajikistan", "On standards of coding and layout of Tajik alphabet characters on the computer keyboard in UNICODE standard for computer applications", Resolution of the Government of the Republic of Tajikistan "On the State Commission on Radio Frequencies of the Republic of Tajikistan", 2005.
Their implementation allowed more than double number of communications operators and creating environment for the use of information and communication technologies in all living environments of the country. The government started formulating government policies on the formation and development of a common information space in Tajikistan, as well as the implementation of sectoral projects and programs for IT development, namely the introduction of electronic databases and data banks, up-to-date technologies, wide use of information and telecommunication systems and networks in the banking sector. In 2014, the State program for development and implementation of information and communication technologies in the Republic of Tajikistan for 2014—2017 was adopted.
In 2011, total income of all mobile communication companies in Tajikistan exceeded 300 mln. dollars [2]. In 2012, incomes of private operators increased – they have made more than 1.6 billion somoni (about 379 million dollars); and performance of state-controlled OJSC "Tajiktelecom and SUE "Pochtai tojik" were much smaller and amounted to 103.9 million (23.5 million dollars). Despite the fact that the basic income is made up by private operators promoting advanced technologies and production of new information and communication technologies, today, there is a state monopoly in the field of communications represented by "Tajiktelecom" company with 95% of the shares owned by the state, the Chairman of the Board is the Head of Communications Service – B. Saburi.
In the first half of 2014, incomes of private operators totaled 1.2 billion somoni ($ 240 million), which is 5.1% more than for the same period in last year. Incomes from the business of the national operators "Tajiktelecom" and "Pochtai Tojik" decreased by 11.5% amounting to 54 million somoni ($ 8.6 million) [3]. Comparative analysis of the industry’s total income for 2011—2013 shows a steady increase of 15% per year [4].
As of 2014, six operators of CDMA (code division multiple access) and GSM (Global digital standard) cellular communication operated in the country; there are about 16 Internet service providers in the country. [5, p.314] The number of users with access to the Internet for 2000—2013 increased by nearly 320 times, but still remains the lowest among the CIS countries. Azerbaijan is leading regarding this figure (Table 2). According to the Communications Service under the Government of the Republic of Tajikistan (controller), at the beginning of 2014, 155 licensees operated in telecommunications industry.
In general, the CIS lags behind the most developed countries regarding the number of Internet users, penetration rates in some countries are less than 20%; for example, in 2010, nearly 12 of 100 people used Internet services in Tajikistan; and in 2013 this figure rose to 16 of 100 people, although the CIS average penetration rate in 2013 was equal to 46.6 – Table 2and 3. In most post-Soviet countries people mostly use low-speed access, which leaves considerable potential for the provision and implementation of broadband services.
In many cities and regional centers of the Republic of Tajikistan one may connect to the Internet from home, but the population does not have sufficient funds to use of this service. Numerous centers of public access to the Internet represented by Internet cafes allow solving this problem; many users connect to the Internet from work places.
In 2010, the number of mobile communication subscribers was equal to 6 million people. In 2012, this figure increased to 6.5 million people, and in 2013 – to 10.9 million people; the number of Internet users tripled – from 1.3 to 3.73 million – over the same period [6]; and in 2013 it increased to 3.8 million people [5, p.314] But according to the representative of the Communication Services under the government of the Republic of Tajikistan, only about 6.3 million subscribers of 8.5 million population have active phone numbers, while mobile communications cover more than 90% of the populated territory of the country with penetration of over 120%. 80 of every 100 people have mobile phones; profit from such phones, including the use of the Internet, is 40 somoni [7]. With regard to fixed-line phones, there are 5.3 apparatuses per every hundred citizens. One local phone line generates income in the amount of 25 somoni per month.
In 2013, the company J’son & Partners Consulting analyzed mobile market in the CIS states and came to the conclusion that Tajikistan – 21% (1.7 mln. users) along with Kyrgyzstan – 35% (2 million users) and Uzbekistan 33% (10 million users) is an outsider in penetration of mobile Internet. Such situation is caused by high tariffs for mobile data traffic, relatively low wages, and low penetration of smart phones – 13—14%. As of spring 2014, LTE networks were launched in all CIS countries except Belarus and 3G networks operate in all countries. Russia ranked first in the category "Technology Leader" and is among three states with the highest penetration of mobile Internet and smartphones.
In penetration of mobile communications and Internet Tajikistan is the last of all the CIS countries (excluding Turkmenistan’s and Uzbekistan) – see Tables 2 and 3.
Position of the Tajikistan Republic in ICT World Ranking
Networked Readiness Index – a comprehensive ICT development indicator developed in 2001 is considered to be the most comprehensive and authoritative source of international assessment of ICT impact on competitiveness and well-being of the countries. Index is used for the analysis of the problem moments in state policies and monitoring in the field of new technologies implementation. According to global report on the development of information technologies, Tajikistan held 111th place among 139 countries in 2010—2011. The report for 2013 "Economic growth and employment in the hyperlinked world" presented data on the Network Readiness Index in 144 countries of the world, where Tajikistan took 112th place (in 2012 it was on the 114th place out of 142 countries); a neighbor and competitor in the field of ICT development – Kyrgyzstan – held 118th place in 2013, and in 2012—115th.
In 2013, by the Index of network activity among the CIS countries the leaders were: Kazakhstan-55th place, Russia –56th place, Azerbaijan – 61st place, Ukraine – 75th place, Moldova – 78th place. Among the first ten countries: Sweden, Singapore, Finland, Denmark, Switzerland, the Netherlands, Norway, United States, Canada and Britain. In 2015, data of the report on the Network Readiness Index among 143 countries show 117th place out of 143 countries. Leadership among the CIS countries remained in Kazakhstan which moved to 40th place, 41th place – Russia, Azerbaijan – 57th place, Armenia – 58th place, Moldova – 68th place, Ukraine – 71st place, Kyrgyzstan – 98th place. First ten states remained to be Singapore, Finland, Sweden, the Netherlands Norway, Switzerland, the United States and the United Kingdom with the exception of Denmark replaced by Luxembourg and Canada, which has moved to the 11th position, and its place was taken by Japan. In reports undoubted progress in the development of information and communication technologies in the Republic of Tajikistan is noted; but in several important indicators of ICT development Tajikistan is considerably inferior not only to the majority of countries that have inherited comparable telecommunications infrastructure and personnel from the former USSR, but also to so-called Third World countries. In particular, one of the major reasons for the backlog of Tajikistan regarding widespread use of the Internet is the lack of modern infrastructure for network access, i. e. systems and fixed broadband networks.
Experts believe that the backlog of Tajikistan in terms of subscribers of fixed broadband Internet access per 100 inhabitants in the countries of Central Asia is connected with the lack of adequate modern infrastructure for access to the network of this format. Implementation of fixed broadband access is economically advantageous in countries with a predominantly urban population; in Tajikistan it is associated with so-called natural constraint (70% of the population are rural residents). But the use of foreign experience of other countries, such as Turkey could bring the republic to a new level, where rural population also dominates.
It seems to us that the backlog and low rating of Tajikistan can be explained by objective and subjective factors, including low quality of life, limited number of smart phones and personal computers in families. Readiness of business circles to provide services via the Internet are delayed by the problem of payment for goods and services using virtual accounts. Experts emphasize the undeveloped system of logistics services. Only one company represented by the Republican national postal service SUE "Pochtai Tojik" is able to provide services on deliveries of cargo and mail, but it cannot provide their fast and high-quality performance. There is no legal base for online store status; network infrastructure is still underdeveloped in rural areas. The essential problem of many regional businesses is the low level of automation, associated with problems of uninterrupted supply of electricity. Representatives of small businesses refrain from the use of information and communication technologies due to the high price of their implementation and maintenance.
Thus, undeveloped institutions, the strict political and administrative controls, including those related to government regulation of business climate, lack of personnel competence are the main shortcomings that hinder the development of entrepreneurship and innovation in the ICT sector in Tajikistan and inhibit the use of ICT in public, commercial and public sectors.
However, development of Tajikistan mobile communication continues. The pace of LTE 4G fourth generation technology introduction is increasing; in 2011, this led to a decrease in the number of users (subscribers), fixed-line operators (Table 1). The number of cellular communication subscribers in 2012 grew by 1891.76 times compared to 2001. In 2000, coverage of population by cellular telephony services increased almost from zero to 112%. Average growth rate of industry income, taking into account private operators, totaled more than 25% [8]. The increase in the number of mobile users is associated with increased competition – operators have to reduce tariffs and expand the range of services provided. Services based on the data transfer are the most popular in this segment. According to Tajik researchers, presence of operators using various standards (GSM, AMPS, CDMA450, CDMA20001X, 3G-UMTS and 3G) on the market largely determines the market strategies of existing and new operators and stimulates the rapid implementation of advanced technologies of data transmission over cellular networks and the implementation of a wide range of additional services based on these technologies. [8]
Industry specific problems
But in recent years, telecommunications system of the country that is relatively well equipped in technical means falls under the pressure of government agencies. In 2010–2013, tax legislation of Tajikistan was amended in the direction of increasing the tax base for companies with foreign capital participation. In the three years such taxes as excise tax (3%) for an incoming connection with further inclusion of Internet services and increase of this tax to 55 starting from 2015; VAT (18%) for incoming connection. Then the tariffs for calls to Russia, where more than a million migrant workers live, rose. New tax on mobile services has led to a rise in price of mobile communications and affected the average consumer in the direction of reducing the number of users.
According to the letter of Communications Service and the order of the National Bank on the establishment of tariffs and measurement units for services in the national currency as of 2012, in May 2013, mobile operators of Tajikistan converted their service plans in the national currency. Internet edition of "Sotovik" published data stating that 500 MB of mobile data costs in average $39.6 in Tajikistan. This is 21.8% of the average monthly income of its citizens. In the CIS, only Kyrgyzstan has such high cost of mobile internet in relation to the monthly incomes of population $ 27.4. – 15.8% [9].
Starting from July 1, 2015, regulatory authorities of the Republic of Tajikistan have introduced new amounts of charges for the use of subscriber numbers, the cost of using mobile subscriber numbers, NGN communications, fixed-line phones, and other types of telecommunications. Communications Service raised the rent for the use of a single number from 10 dirhams to 1.82 somoni, and the companies TT Mobile Babylon-T, Tuck, Tcell, introduced a monthly fee for one number in the amount of 80 and 50 dirhams per month.
In an open letter to the Association of mobile operators to the Ministry of Finance and Tax Committee it is noted that the increase in the tax burden has led "to the fact that in 2013 the share of taxes in relation to progit in the sector was 32%, and taking into account the amount of tax audit is will reach 45%; at this companies fully bear the costs of the service and their business. Today, cellular companies pay 32 diram taxes per one somon of revenue; and in addition to the taxes, there are other costs: net cost, staff salaries, the cost of maintaining the network, connection fees for connecting customers and receiving payment, and others. Thus, total payments comprise more than the companies earn. Such a burden of costs jeopardizes the investment attractiveness of the Tajikistan economy and the implementation of planned indicators of the communications industry in the country’s strategy." [4] Aggregate tax and other obligatory payments from mobile operators at a rate of about 1 billion somoni (159 693 422 million doll.) per year are given to the budget of the Republic. Tax burden on mobile operators in Tajikistan is "one of the hardest" compared to world practice. Analysis of tax payments in 186 countries of the world presented in the report PayingTaxes-2014 by "PricewaterhouseCoopers’ showed that the Republic of Tajikistan, in terms of total tax rate, holds the second to last place among the countries of Central Asia and Eastern Europe, and the tax rate of 86% is one the highest in the world. While in Europe, the highest tax rate reaches 65% (Italy), and the lowest is 20% in Croatia. [4]
But there are a lot of factors that hinder the development of ICT in Tajikistan, such as low incomes, inadequate power supply, operators have to lay their power lines or buy diesel for base stations. The country does not have enough lines of fiber-optic communications; this forces operators to use satellite channels with small capacity. However, it should be noted that the technological level of the Tajik operators contrasts with those of neighboring countries. While GSM Kazakhstan tried to accelerate the implementation of 3G telecommunication networks, the first 3G base stations have already been installed in Tajikistan. This was possible, partly because that free frequencies required for the third generation network appeared unoccupied due to weak development of IT-technologies; and operators easily used them. In 2009, the mobile operator "Mobile Linse of Tajikistan" (CJSC "TT mobile") offered wireless communication technology – 3,5G USB modems, considered most effective, convenient and easy way to access the Internet at that time, on the telecommunications market of the Republic. Currently, they are promoted by LLC "Babylon Mobile", CJSC "TT-Mobile", LLC "Tcell", LLC "Tuck." Development of high speed standards allows diversifying the market.
Joining WTO, which took so long for Tajikistan, obliged the country to fulfill a number of obligations to strengthen the competitive advantages of the country, liberalization of the services market, transfer to market relations, namely in the field of telecommunications. One of these obligations is to create an independent regulator (IR) for telecommunications sector. Existing regulator – Communications Service under the Government of Tajikistan – at the same time controls the activity of one of the companies (JSC "Tajiktelecom"), which leads to unequal conditions in market relationships. Independent telecommunications organizations of the Republic have high hopes for the creation of regulator independent from operators and the state, capable to accept and control rules, mandatory for all operators, regardless of ownership. It is the lack of an independent regulator in the country that is a major problem of telecommunications sector.
Multi-stakeholder partnership within WTO is very important for a geographically isolated Tajikistan, which is interested in widespread use of ICTD benefits. The government, realizing the importance of such partnership, advanced the idea of turning the country into a transit telecommunications hub. To this end, the Council on ICT under the President of the Republic of Tajikistan hypothesizes a feasibility analysis of the transit potential of Tajikistan and the development of a roadmap for the implementation of telecommunication transit potential of the country. "Means of communication may consist of pipeline networks and transport corridors, as well as an extensive network of business partners. In Tajikistan, these means of communication may include high-voltage power lines (HVPL). If the pipelines allow laying fiber-optic links, we can create such links via VLEP such as CASA – 1000 even with more success". [4]
Some conclusions
In the early years of the republic existence, communications sector developed rapidly and efficiently, induced by foreign investment, the excess profits from international communication connected with migration of republic’s population and the desire join the world community. Emergence of an international fiber-optic communication also contributed to market development. For short period of time, a number of companies providing the level of communication in the 3G format on the telecommunications market.
Problems with promotion of new information and communication technologies in Tajikistan existing in post-Soviet period were associated with the civil war and its economic consequences.
Currently, it can be noted that the market for mobile and Internet services in Tajikistan is quite competitive. Coverage by mobile communication in Tajikistan is limited mainly by settlements located in the north-west and south-west of the country; in the eastern part of the country two-thirds of the territory has a very loose coverage. By 2013, more than 14 million subscribers of 8 million population used new communication services.
The development of fixed broadband access has been limited, and today, this service has only a few thousands of subscribers using mainly ADSL and fiber to the building (FTTB) technologies; most likely, we can say that access to Internet services is more real via wireless broadband access than via fixed broadband communications.
Analysts point out that in Tajikistan satellite communication is actually cheaper than international fiber optic, which is mainly concentrated in the west of the country, which greatly limits the development of the international broadband communication..
The monopoly on the provision of long-distance communication channels belongs to the state company "Tojiktelecom". Some mobile operators place their equipment at the telephone stations of "Tojiktelecom", but for other companies it is difficult to compete in the cost of long distance calls. However, all mobile operators have their own direct channels to Moscow, which allows them to provide low prices for international calls to Russia, and this is especially true in the context of mass migration of the working age population.
Low living standards hinder the growth of the mobile Internet, so, according to assessments of international agencies of Tajikistan and a number of Central Asian countries are among the laggards.
lobal economic processes and political changes that occurred in the world in late 20th century led to increased interest in the implementation of new communications, development and implementation of new information and communication technologies. The role of economic activities connected with obtaining and processing of information has grown; possibilities of electronic services provision to the population have increased. These processes also took place in Tajikistan. Geographical features of the country with 93% of mountainous territory have defined specific features of transport routes, communications and telephony development between districts and cities of the Republic. During Soviet times, there were no or very constrained communications in remote mountain regions. During first years of independence there were no economic possibilities to form modern public communications facilities formation. Gradual growth of economics allowed transforming Tajikistan communications into the most developed sector of economics. Material achievements of Tajikistan information and communication technologies market over the past years were reflected in increasing regional competitiveness.
Information and communication technologies are central in modernization and restructuring of all kinds of the Republic’s activities. Implementation of electronic government in the country has been carried out during several years. In 2011 "The Concept of Electronic Government Formation on the Republic of Tajikistan" was adopted; according to representative of RT Communications Service, electronic government will be completely formed by 2025. Nowadays, almost all state administrative bodies have their websites. Alongside with that, according to expert opinion, existing websites differ by structure, nature and quality of content despite the procedure for unified requirements for websites and local area networks of state administrative bodies adopted in 2011. And language versions of the websites in Tadjik, Russian and English are not always synchronized.
Present-day Condition of Information and Communication Technologies in Tajikistan
Present-day information and communication sector has clearly defined services market based on fixed-line, mobile, satellite communications and data transfer via the Internet. Despite dynamically developing telecommunications sector, Tajikistan and its neighboring states – Uzbekistan and Kyrgyzstan – lag behind global trends; this is caused by economic, political and social features of these countries.
Development of electric communications has not significantly changed the use of postal communications in Tajikistan; compared to 1991, only issue of newspapers and journals has decreased (Table 1).
In 90s large Israel investments allowed complete modernization of communications sector in new Tajikistan state. Joint venture of Tajikistan and Netherlands (with private Israel capital) "TojikTel" – first mobile communications operator in Tajikistan – started offering its services in D-AMPS analog standard in Dushanbe since 1996. Up to 2001, this company had sole right to provide mobile communication services in Tajikistan; Israel companies obtained exclusive right for issuance of licenses for equipment installation. One should mention that economic consequences of civil war in Tajikistan held back mobile communications development; alongside with that, later entrance of mobile services operators to Tajikistan market allowed them to use up-to-date equipment. Active development of mobile communications started since 2001, when "Indigo-Tojikston" company was established by MST Corporation (USA) and Aga Khan Fund for economic development. MLT Company (Mobile Lines of Tajikistan) – joint Russian-Tadjik venture was established by "North-West GASM" and "Tojiktelecom" and worked in GSM standard. In 2003, GSM services were introduced even by "Babylon-Mobile" Company with American capital; some other companies appeared on the market. Nowadays, "Babylon-Mobile" is a leading company on the market with its share of 60% of user market.
In 2004, the Ministry of Communications of the Republic started issuing licenses for provision of third generation mobile communication. Russian mobile operators "VimpelCom" and "MegaFon" built first 3G networks in Tajikistan. With the financial support of the EBRD all automatic telephone exchanges have switched to digital format. At this, experts note that Tajikistan was ahead of all the CIS countries regarding implementation of 3G mobile technologies at that time. Thus, "MLT" Company (Mobile lines of Tajikistan)* made it possible to communicate via 3G not only in Tajikistan, but throughout the former Soviet Union for the first time among cellular operators of the Republic in 2005. International experts have repeatedly noted stable possibilities of MLT company for commercial launch of complete UMTS 3G-network. This strengthened the position of the Tajik telecommunication market in the global information environment in the new millennium. In the 3G network coverage area included settlements that lacked even fixed landline communication. Major part of Tajikistan’s population lives in rural areas with limited access to transport services, and mobile communication allows reducing costs and is becoming vital for the full life of the population, functioning and increasing the productivity of small businesses and Dehqan farms. Currently, subscribers of network MLT networks of these districts and cities receive not only traditional GSM-services, but also high-quality multimedia services.
MLT company was the first to test the new technology of the fourth generation – LTE (mobile broadband technology of the fourth generation) with data transfer speeds up to 150 megabits per second; this is 10 times faster than the UMTS networks of third generation and several times faster than the most widespread GPRS / EDGE technology.
According to various sources, at the end of 2013, there were 150—230 million LTE subscribers using the connection of the fourth generation. In April 2014, the first LTE network was launched in Tajikistan. Mobile Internet became available to subscribers of Tcell [1]. The company was formed as a result of the merger of CJSC "Indigo Tajikistan", the shareholders of Central Asian Telecommunications Development BV (CATD) – Dutch company which beneficiaries are TeliaSonera UTA Holding BV and the Aga Khan Fund for Economic Development (AKFED). The fast-growing market of Tajikistan actively uses advanced technologies. In particular, in 2014, Russia’s first full-MVNO mobile operator – Aiva Mobile, launched by OJSC "MTT" and intended for ethnic groups from different countries began active sales. Tariff offers of Aiva Mobile virtual operator offer to use a combination of two active phone numbers – Tajik and Russian in one SIM-card. Both numbers can be used freely in the two countries without roaming, thanks to the intelligent routing technology from MTT; calls to both numbers can come from the two countries at "domestic" tariffs.
In such a way, the competitive mobile market has developed in the zero years due to active work of the Chinese company ZTE, Russian "VimpelCom" and "MegaFon", Swedish TeliaSonera, "Indigo Tojikston" company with the participation of American capital. Analysis of the development of information and communication technologies shows that providing the transparency of information on all cellular GSM operators and companies – monopolists of fixed communications, operating in Central Asia, Tajikistan with five companies could go after regional leadership.
Legislative regulation of competitive environment and review of services scope development
In 2002, the Law "On Telecommunications’ regulating telecommunications sector in Tajikistan was adopted. In November 2003, the State Strategy "Information and Communication Technologies for Development of the Republic of Tajikistan" was approved; it defined the main organizational, economic and financial mechanisms for the development of this segment of the infrastructure. It also emphasized the strategic directions for the formation of information technologies. Measures to address the growing "digital gap" in the country, the region and the CIS with the aim of decent integration of Tajikistan into the global information community were provided.
In addition to this strategy a number of legal documents relating to information and communication technologies were adopted. "The program of information security of the Republic of Tajikistan", the program "Development and implementation of information and communication technologies in the Republic of Tajikistan", the program "Application and development of information technology in the Tajik" and the program "Transport telecommunication networks in the Republic of Tajikistan", "On standards of coding and layout of Tajik alphabet characters on the computer keyboard in UNICODE standard for computer applications", Resolution of the Government of the Republic of Tajikistan "On the State Commission on Radio Frequencies of the Republic of Tajikistan", 2005.
Their implementation allowed more than double number of communications operators and creating environment for the use of information and communication technologies in all living environments of the country. The government started formulating government policies on the formation and development of a common information space in Tajikistan, as well as the implementation of sectoral projects and programs for IT development, namely the introduction of electronic databases and data banks, up-to-date technologies, wide use of information and telecommunication systems and networks in the banking sector. In 2014, the State program for development and implementation of information and communication technologies in the Republic of Tajikistan for 2014—2017 was adopted.
In 2011, total income of all mobile communication companies in Tajikistan exceeded 300 mln. dollars [2]. In 2012, incomes of private operators increased – they have made more than 1.6 billion somoni (about 379 million dollars); and performance of state-controlled OJSC "Tajiktelecom and SUE "Pochtai tojik" were much smaller and amounted to 103.9 million (23.5 million dollars). Despite the fact that the basic income is made up by private operators promoting advanced technologies and production of new information and communication technologies, today, there is a state monopoly in the field of communications represented by "Tajiktelecom" company with 95% of the shares owned by the state, the Chairman of the Board is the Head of Communications Service – B. Saburi.
In the first half of 2014, incomes of private operators totaled 1.2 billion somoni ($ 240 million), which is 5.1% more than for the same period in last year. Incomes from the business of the national operators "Tajiktelecom" and "Pochtai Tojik" decreased by 11.5% amounting to 54 million somoni ($ 8.6 million) [3]. Comparative analysis of the industry’s total income for 2011—2013 shows a steady increase of 15% per year [4].
As of 2014, six operators of CDMA (code division multiple access) and GSM (Global digital standard) cellular communication operated in the country; there are about 16 Internet service providers in the country. [5, p.314] The number of users with access to the Internet for 2000—2013 increased by nearly 320 times, but still remains the lowest among the CIS countries. Azerbaijan is leading regarding this figure (Table 2). According to the Communications Service under the Government of the Republic of Tajikistan (controller), at the beginning of 2014, 155 licensees operated in telecommunications industry.
In general, the CIS lags behind the most developed countries regarding the number of Internet users, penetration rates in some countries are less than 20%; for example, in 2010, nearly 12 of 100 people used Internet services in Tajikistan; and in 2013 this figure rose to 16 of 100 people, although the CIS average penetration rate in 2013 was equal to 46.6 – Table 2and 3. In most post-Soviet countries people mostly use low-speed access, which leaves considerable potential for the provision and implementation of broadband services.
In many cities and regional centers of the Republic of Tajikistan one may connect to the Internet from home, but the population does not have sufficient funds to use of this service. Numerous centers of public access to the Internet represented by Internet cafes allow solving this problem; many users connect to the Internet from work places.
In 2010, the number of mobile communication subscribers was equal to 6 million people. In 2012, this figure increased to 6.5 million people, and in 2013 – to 10.9 million people; the number of Internet users tripled – from 1.3 to 3.73 million – over the same period [6]; and in 2013 it increased to 3.8 million people [5, p.314] But according to the representative of the Communication Services under the government of the Republic of Tajikistan, only about 6.3 million subscribers of 8.5 million population have active phone numbers, while mobile communications cover more than 90% of the populated territory of the country with penetration of over 120%. 80 of every 100 people have mobile phones; profit from such phones, including the use of the Internet, is 40 somoni [7]. With regard to fixed-line phones, there are 5.3 apparatuses per every hundred citizens. One local phone line generates income in the amount of 25 somoni per month.
In 2013, the company J’son & Partners Consulting analyzed mobile market in the CIS states and came to the conclusion that Tajikistan – 21% (1.7 mln. users) along with Kyrgyzstan – 35% (2 million users) and Uzbekistan 33% (10 million users) is an outsider in penetration of mobile Internet. Such situation is caused by high tariffs for mobile data traffic, relatively low wages, and low penetration of smart phones – 13—14%. As of spring 2014, LTE networks were launched in all CIS countries except Belarus and 3G networks operate in all countries. Russia ranked first in the category "Technology Leader" and is among three states with the highest penetration of mobile Internet and smartphones.
In penetration of mobile communications and Internet Tajikistan is the last of all the CIS countries (excluding Turkmenistan’s and Uzbekistan) – see Tables 2 and 3.
Position of the Tajikistan Republic in ICT World Ranking
Networked Readiness Index – a comprehensive ICT development indicator developed in 2001 is considered to be the most comprehensive and authoritative source of international assessment of ICT impact on competitiveness and well-being of the countries. Index is used for the analysis of the problem moments in state policies and monitoring in the field of new technologies implementation. According to global report on the development of information technologies, Tajikistan held 111th place among 139 countries in 2010—2011. The report for 2013 "Economic growth and employment in the hyperlinked world" presented data on the Network Readiness Index in 144 countries of the world, where Tajikistan took 112th place (in 2012 it was on the 114th place out of 142 countries); a neighbor and competitor in the field of ICT development – Kyrgyzstan – held 118th place in 2013, and in 2012—115th.
In 2013, by the Index of network activity among the CIS countries the leaders were: Kazakhstan-55th place, Russia –56th place, Azerbaijan – 61st place, Ukraine – 75th place, Moldova – 78th place. Among the first ten countries: Sweden, Singapore, Finland, Denmark, Switzerland, the Netherlands, Norway, United States, Canada and Britain. In 2015, data of the report on the Network Readiness Index among 143 countries show 117th place out of 143 countries. Leadership among the CIS countries remained in Kazakhstan which moved to 40th place, 41th place – Russia, Azerbaijan – 57th place, Armenia – 58th place, Moldova – 68th place, Ukraine – 71st place, Kyrgyzstan – 98th place. First ten states remained to be Singapore, Finland, Sweden, the Netherlands Norway, Switzerland, the United States and the United Kingdom with the exception of Denmark replaced by Luxembourg and Canada, which has moved to the 11th position, and its place was taken by Japan. In reports undoubted progress in the development of information and communication technologies in the Republic of Tajikistan is noted; but in several important indicators of ICT development Tajikistan is considerably inferior not only to the majority of countries that have inherited comparable telecommunications infrastructure and personnel from the former USSR, but also to so-called Third World countries. In particular, one of the major reasons for the backlog of Tajikistan regarding widespread use of the Internet is the lack of modern infrastructure for network access, i. e. systems and fixed broadband networks.
Experts believe that the backlog of Tajikistan in terms of subscribers of fixed broadband Internet access per 100 inhabitants in the countries of Central Asia is connected with the lack of adequate modern infrastructure for access to the network of this format. Implementation of fixed broadband access is economically advantageous in countries with a predominantly urban population; in Tajikistan it is associated with so-called natural constraint (70% of the population are rural residents). But the use of foreign experience of other countries, such as Turkey could bring the republic to a new level, where rural population also dominates.
It seems to us that the backlog and low rating of Tajikistan can be explained by objective and subjective factors, including low quality of life, limited number of smart phones and personal computers in families. Readiness of business circles to provide services via the Internet are delayed by the problem of payment for goods and services using virtual accounts. Experts emphasize the undeveloped system of logistics services. Only one company represented by the Republican national postal service SUE "Pochtai Tojik" is able to provide services on deliveries of cargo and mail, but it cannot provide their fast and high-quality performance. There is no legal base for online store status; network infrastructure is still underdeveloped in rural areas. The essential problem of many regional businesses is the low level of automation, associated with problems of uninterrupted supply of electricity. Representatives of small businesses refrain from the use of information and communication technologies due to the high price of their implementation and maintenance.
Thus, undeveloped institutions, the strict political and administrative controls, including those related to government regulation of business climate, lack of personnel competence are the main shortcomings that hinder the development of entrepreneurship and innovation in the ICT sector in Tajikistan and inhibit the use of ICT in public, commercial and public sectors.
However, development of Tajikistan mobile communication continues. The pace of LTE 4G fourth generation technology introduction is increasing; in 2011, this led to a decrease in the number of users (subscribers), fixed-line operators (Table 1). The number of cellular communication subscribers in 2012 grew by 1891.76 times compared to 2001. In 2000, coverage of population by cellular telephony services increased almost from zero to 112%. Average growth rate of industry income, taking into account private operators, totaled more than 25% [8]. The increase in the number of mobile users is associated with increased competition – operators have to reduce tariffs and expand the range of services provided. Services based on the data transfer are the most popular in this segment. According to Tajik researchers, presence of operators using various standards (GSM, AMPS, CDMA450, CDMA20001X, 3G-UMTS and 3G) on the market largely determines the market strategies of existing and new operators and stimulates the rapid implementation of advanced technologies of data transmission over cellular networks and the implementation of a wide range of additional services based on these technologies. [8]
Industry specific problems
But in recent years, telecommunications system of the country that is relatively well equipped in technical means falls under the pressure of government agencies. In 2010–2013, tax legislation of Tajikistan was amended in the direction of increasing the tax base for companies with foreign capital participation. In the three years such taxes as excise tax (3%) for an incoming connection with further inclusion of Internet services and increase of this tax to 55 starting from 2015; VAT (18%) for incoming connection. Then the tariffs for calls to Russia, where more than a million migrant workers live, rose. New tax on mobile services has led to a rise in price of mobile communications and affected the average consumer in the direction of reducing the number of users.
According to the letter of Communications Service and the order of the National Bank on the establishment of tariffs and measurement units for services in the national currency as of 2012, in May 2013, mobile operators of Tajikistan converted their service plans in the national currency. Internet edition of "Sotovik" published data stating that 500 MB of mobile data costs in average $39.6 in Tajikistan. This is 21.8% of the average monthly income of its citizens. In the CIS, only Kyrgyzstan has such high cost of mobile internet in relation to the monthly incomes of population $ 27.4. – 15.8% [9].
Starting from July 1, 2015, regulatory authorities of the Republic of Tajikistan have introduced new amounts of charges for the use of subscriber numbers, the cost of using mobile subscriber numbers, NGN communications, fixed-line phones, and other types of telecommunications. Communications Service raised the rent for the use of a single number from 10 dirhams to 1.82 somoni, and the companies TT Mobile Babylon-T, Tuck, Tcell, introduced a monthly fee for one number in the amount of 80 and 50 dirhams per month.
In an open letter to the Association of mobile operators to the Ministry of Finance and Tax Committee it is noted that the increase in the tax burden has led "to the fact that in 2013 the share of taxes in relation to progit in the sector was 32%, and taking into account the amount of tax audit is will reach 45%; at this companies fully bear the costs of the service and their business. Today, cellular companies pay 32 diram taxes per one somon of revenue; and in addition to the taxes, there are other costs: net cost, staff salaries, the cost of maintaining the network, connection fees for connecting customers and receiving payment, and others. Thus, total payments comprise more than the companies earn. Such a burden of costs jeopardizes the investment attractiveness of the Tajikistan economy and the implementation of planned indicators of the communications industry in the country’s strategy." [4] Aggregate tax and other obligatory payments from mobile operators at a rate of about 1 billion somoni (159 693 422 million doll.) per year are given to the budget of the Republic. Tax burden on mobile operators in Tajikistan is "one of the hardest" compared to world practice. Analysis of tax payments in 186 countries of the world presented in the report PayingTaxes-2014 by "PricewaterhouseCoopers’ showed that the Republic of Tajikistan, in terms of total tax rate, holds the second to last place among the countries of Central Asia and Eastern Europe, and the tax rate of 86% is one the highest in the world. While in Europe, the highest tax rate reaches 65% (Italy), and the lowest is 20% in Croatia. [4]
But there are a lot of factors that hinder the development of ICT in Tajikistan, such as low incomes, inadequate power supply, operators have to lay their power lines or buy diesel for base stations. The country does not have enough lines of fiber-optic communications; this forces operators to use satellite channels with small capacity. However, it should be noted that the technological level of the Tajik operators contrasts with those of neighboring countries. While GSM Kazakhstan tried to accelerate the implementation of 3G telecommunication networks, the first 3G base stations have already been installed in Tajikistan. This was possible, partly because that free frequencies required for the third generation network appeared unoccupied due to weak development of IT-technologies; and operators easily used them. In 2009, the mobile operator "Mobile Linse of Tajikistan" (CJSC "TT mobile") offered wireless communication technology – 3,5G USB modems, considered most effective, convenient and easy way to access the Internet at that time, on the telecommunications market of the Republic. Currently, they are promoted by LLC "Babylon Mobile", CJSC "TT-Mobile", LLC "Tcell", LLC "Tuck." Development of high speed standards allows diversifying the market.
Joining WTO, which took so long for Tajikistan, obliged the country to fulfill a number of obligations to strengthen the competitive advantages of the country, liberalization of the services market, transfer to market relations, namely in the field of telecommunications. One of these obligations is to create an independent regulator (IR) for telecommunications sector. Existing regulator – Communications Service under the Government of Tajikistan – at the same time controls the activity of one of the companies (JSC "Tajiktelecom"), which leads to unequal conditions in market relationships. Independent telecommunications organizations of the Republic have high hopes for the creation of regulator independent from operators and the state, capable to accept and control rules, mandatory for all operators, regardless of ownership. It is the lack of an independent regulator in the country that is a major problem of telecommunications sector.
Multi-stakeholder partnership within WTO is very important for a geographically isolated Tajikistan, which is interested in widespread use of ICTD benefits. The government, realizing the importance of such partnership, advanced the idea of turning the country into a transit telecommunications hub. To this end, the Council on ICT under the President of the Republic of Tajikistan hypothesizes a feasibility analysis of the transit potential of Tajikistan and the development of a roadmap for the implementation of telecommunication transit potential of the country. "Means of communication may consist of pipeline networks and transport corridors, as well as an extensive network of business partners. In Tajikistan, these means of communication may include high-voltage power lines (HVPL). If the pipelines allow laying fiber-optic links, we can create such links via VLEP such as CASA – 1000 even with more success". [4]
Some conclusions
In the early years of the republic existence, communications sector developed rapidly and efficiently, induced by foreign investment, the excess profits from international communication connected with migration of republic’s population and the desire join the world community. Emergence of an international fiber-optic communication also contributed to market development. For short period of time, a number of companies providing the level of communication in the 3G format on the telecommunications market.
Problems with promotion of new information and communication technologies in Tajikistan existing in post-Soviet period were associated with the civil war and its economic consequences.
Currently, it can be noted that the market for mobile and Internet services in Tajikistan is quite competitive. Coverage by mobile communication in Tajikistan is limited mainly by settlements located in the north-west and south-west of the country; in the eastern part of the country two-thirds of the territory has a very loose coverage. By 2013, more than 14 million subscribers of 8 million population used new communication services.
The development of fixed broadband access has been limited, and today, this service has only a few thousands of subscribers using mainly ADSL and fiber to the building (FTTB) technologies; most likely, we can say that access to Internet services is more real via wireless broadband access than via fixed broadband communications.
Analysts point out that in Tajikistan satellite communication is actually cheaper than international fiber optic, which is mainly concentrated in the west of the country, which greatly limits the development of the international broadband communication..
The monopoly on the provision of long-distance communication channels belongs to the state company "Tojiktelecom". Some mobile operators place their equipment at the telephone stations of "Tojiktelecom", but for other companies it is difficult to compete in the cost of long distance calls. However, all mobile operators have their own direct channels to Moscow, which allows them to provide low prices for international calls to Russia, and this is especially true in the context of mass migration of the working age population.
Low living standards hinder the growth of the mobile Internet, so, according to assessments of international agencies of Tajikistan and a number of Central Asian countries are among the laggards.
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