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Comparing 3G rates offered by MTS and Altyn Asyr

Turkmenistan launched the 3rd generation mobile network 3G. This launch can hardly be referred to as timely since the whole world, or at least developed countries, has already been switching to the new 4G (LTE) standard since 2012. But let us excuse MTS since as always the process is more complicated in Turkmenistan.

MTS had intended to introduce 3G in 2010 before the Turkmen authorities banned MTS operations by refusing to extend their license. At that time the company had 2.4 mln subscribers whereas its only competitor, the state-run “Altyn Asyr” had only about half a million. It should be noted that “Altyn Asyr” launched its 3G network in early 2010.

In the course of investigation, MTS representatives threatened to file a lawsuit at the court of arbitration under the World Bank. The amount of damages from lost profits was estimated at $ 600 million.

Two years later, in 2012, MTS managed to get permission to return to the Turkmen market. However, the license was issued for only 3 years, not 5 years as before, i.e. until August 2015. It remains unknown whether it will be extended after it expires. Another condition for the comeback was that, apart from taxes, MTS is obligated to pay on a monthly basis 30% of its net operating profit from Turkmen operations to its direct competitor “Turkmen telecom” (before, they paid 20%) which in turn means that rates for the service need to be increased.

But that’s not the whole story. This year MTS was confronted with new obstacles. Despite the fact that the provider held a license to launch a 3G network in the country, according to some sources, the authorities did not give MTS the “green light” to increase the main channel capacity, which hindered the launch of the 3rd generation network. In other words, the network could be deployed, but with narrow band channels it is impossible to ensure stable Internet speed. This is still a weak point of “Altyn Asyr”. Subscribers of the state-run provider complain about the constantly “fluctuating” speed. In the evenings and at weekends, during “peak hours” when the majority of users try to log on to the Internet it is sometimes impossible to download even a text webpage.

Taking into account all the aforementioned conditions and constraints, it is obvious that MTS can’t afford to introduce cheap rates for its services. First of all, don’t forget the 30% that MTS must pay to “Turkmentelecom” which basically means that under equal conditions the rates offered by the Russian operators must be 30% cheaper. Secondly, it would not be surprising that MTS might agree its rates with the authorities or with “Turkmentelecom” not to make them too attractive. The new license expires in a year, and in case of excessive business activity it can be revoked as before.

But ordinary subscribers should not be bothered with these obstacles. Turkmen residents must choose from the options available. The good thing is that they have a choice, although it is very limited.

 

The plan stipulates no subscription fee but at the same time subscribers have to pay 28,5 manats a month ($10) which is tantamount to a subscription fee. It should be noted that this price will remain for 4 months, until 1 February 2015, and then will double amounting to 54 mantas a month ($19). This includes up to 10 MB a day (300 MB per month), + 10 tenge for each megabyte above the limit.

As of today, especially with 3G speed, 300 megabytes is not a lot. Apart from that, for the majority of users, mobile internet in Turkmenistan is the main and only means of Internet access. For instance, in Europe it is mostly used for entertainment when on the road, but not as a full-fledged substitute of the much faster and cheaper fiber-optic connection via a desktop computer. Nevertheless, the trend to fully switch to mobile internet is noticeable.

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