Brief Strategy resume

Strategy of group of Kazakhtelecom companies directed to saving leading positions in fixed business, developing mobile business with step by step building of integrated operator, using synergies with main business for point development in crossed with telecommunication spheres. At that a task on saving operational business efficiency is put at level upper average for companies –analogies and raising capital investments efficiency.

By the end of 2013 Kazakhtelecom saves leading positions at Kazakhstan market of fixed communication holding share about 80%. However at expense of difference in growth tempo of mobile and fixed communication, share of fixed communication reduced from half of telecommunication market in 2007 to third part in 2012 as shown in the picture 1.

Pic. 1.Profit on telecommunication market of Kazakhstan

To save leading positions on telecommunication market of Kazakhstan and enlarge presence on infocommunication market, Kazakhtelecom develops presence on mobile market (through under control ALTEL JSC operator) and IT direction.

Pic. 2. Determining «growth points» of telecommunication market of Kazakhstan at horizon 2012-22. 

Kazakhtelecom JSC has some advantages as regards to other players on Kazakhstan market, particularly:

  • wide coverage of Kazakhstani people with communication services– over 70% houses connected to fixed Kazakhtelecom telephony;
  •  has no analogies by the country of wire communication infrastructure– technical coverage over 80% houses in Kazakhstan, where:

-  25% houses provided with access to high speed GPON data transfer infrastructure;

-  60% houses– access to ADSL 2+ infrastructure that secures speed up to 20 Mb/s;

-  15% houses have access to basic telephony;

  • Single 4G license by the country to mobile communication (LTE);
  • Developed network of retail sales centers and subscribers’ servicing– over 300 by Kazakhstan;
  • Popular brand that worth trust.

However before the Group serious strategic calls are set, which will influence to its ability to create and enlarge the cost and must be considered when building long-term strategy:

  • Reduction of growth tempo and scale of company’s business

-  Reduction of gain from fixed telephony because of fixed lines flows and refuse of subscribers from fixed telephony to mobile;

-  Raise of competence on fixed broadband market;

-  Week positions in rapidly growing directions– mobile segment, paid TV, ICT;

  • High level of free content;
  •  Regulatory limits:

-  Absence of regulatory support in mobile business development;

-  Regulatory limits in fixed business (for instance, regulation of rates to fixed communication for В2С, no regional differentiation);

  • Reduction of business margins in result of reduction of service cost;
  • Considerable load, connected with investments to infrastructure, including realization of social projects with payback.

To achieve goals and successful opposition to possible calls, realization of strategic initiatives  that form group’s vision is supposed:

  • Services supermarket for all family: choice №1 for communication, information, entertainment;
  • Information base of Kazakhstan business;
  • Building integrated operator;
  • Business-model upgrade.

Pic. 3. Mission, vision and strategic initiatives of the Group

Group of initiatives «Services supermarket for all family» assumes batch proposal promotion of telecommunication and other services that will satisfy all family members’ needs in communications, information and entertainment;

  • Users’ experience raise and subscribers’ loyalty;

Group of initiatives «Information base of Kazakhstan business» includes:

  • Widening of product line and providing complex solutions that meet infocommunication needs of various corporate clients;
  • Shift from product approach in work with corporate segment to client- and segment oriented approach;
  • Development of operator’s business.

Group of initiatives «Building integrated operator» specifies

Development of mobile business to the scale that will allow performing considerable deposit to financial results of the group

  • Receiving synergetic effect at expense of mobile and fixed business segments integration

«Upgrade of business-model» is necessary condition for achieving strategic goals by the group both from direct influence to financial indices and securing necessary conditions for realization of important strategic initiatives, mentioned before.  Upgrade of business –model assumes complex of initiatives on raising organization’s efficiency and labor productivity, improving processes and corporate culture of the Group.

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