1. 1
Analysis of the Telecommunications
and Energy industry in Turkmenistan.
Content
Telecommunication Industry
I. Executive Summary………………………………………………………………………………......1
II. Brief Telecommunication History……………………………………………………………….5
III. Turkmenistan Overview……………………………………………………………………………..7
IV. Political Effect…………………………………………………………………………………………….8
V. Mobile Sector…………………………………………………………………………………………..10
VI. Turkmen Netizens……………………………………………………………………………………12
Private Access
Internet Access
Mobile Phones Access
Cyber Space
VII. Institutional Framework…………………………………………………………………………..17
VIII. Regulatory Environment…………………………………………………………………………..18
IX. Ease of Access………………………………………………………………………………………….18
X. Setting Tariffs…………………………………………………………………………………………..18
XI. Competition Safeguards…………………………………………………………………………..20
XII. Operational Conditions…………………………………………………………………………….20
XIII. Universal Service………………………………………………………………………………………20
XIV. Targets…………………………………………………………………………………………………….21
XV. Key Market Indicators………………………………………………………………………………22
XVI. State Control……………………………………………………………………………………………26
XVII. Telecommunications Infrastructure………………………………………………………...27
XVIII. Conclusion……………………………………………………………………………………………….28
XIX. Sources…………………………………………………………………………………………………….29
Energy Industry
I. Introduction…………………………………………………………………………………………….30
II. Regulatory Environment…………………………………………………………………………..31
2. 2
Telecommunications Industry Analysis
Executive Summary
Turkmenistan’s telecommunications services are shown to be the least developed
among the former Soviet states.
Poor growth is attributed to the slow development of the private sector and stringent
regulations enacted by the government. However, with the ascent of a new
government, rapid changes have been experienced and leave space for optimism.
The telecommunications industry is dominated by state owned Turkmen Telecom
which is the primary provider of public telephone, email and internet services.
Through a subsidiary (Altyn Ayr) it also operates GSM mobile network competing
against one private operator (MTS Turkmenistan).
Mobile penetration rate in Turkmenistan by 2010, prior to the suspension of MTS’
concession, was slightly above 63%. Despite being one of the smallest and relatively
underdeveloped markets in the region, massive gains were experienced in 2008
where the annual subscription rates grew by 143%. As a result the mobile
penetration jumped from 8% to almost 20% in one year. The growth rate continued
to run at more than 100% in 2009. The latest figures, as of 2012, indicate that mobile
penetration is at approximately 88%.
Fixed line penetration has struggled to break the 10% barrier. However, recent
indications show that in 2012, the penetration rose to 11%.
Email and internet services had been hindered by severe government controls until
2007 when the new government eased some restrictions. Strict controls still remain
3. 3
in place. Access to the internet is provided by the government ISP company
TurkmenTelecom, this was after its forced out four other ISP providers back in the
year 2000 to create a monopoly. This was consistent with the government’s policy
that required tight control over all communications in the country.
Broadband internet access is still very low, at less than 0.03% of the population.
Access to internet services is by 5% of the population, which is roughly about 252,
741 people. However, it is difficult to ascertain the accuracy of the data as official
figures are hard to obtain. Internet cafes (about 20 in total) in the capital charge an
average of $4 per hour.
The ministry of communications signed a contract with TATA communications for
routing traffic through the Transit-Asia-Europe fibre optic channel. TurkmenTelecom
started offering higher speed internet to users in Ashgabat (capital city).
Fixed line services
2011 2012
Total number of
subscribers
520,000 550,000
Annual change 5% 6%
Penetration (population) 10% 11%
Source: BuddeComm
Mobile services
2011 2012
Total number of
subscribers (millions)
3.2 4.5
Annual change 50% 41%
Penetration (population) 63% 88%
Source: BuddeComm
*data may slightly be skewed due to the suspension of MTS Turkmenistan operating
licence.
4. 4
Ps: MTS (the second GSM mobile operator) had been engulfed with problems by the
government who refused to renew its licence for two years (until September 2012)
despite the fact that it had coverage of around 85% of Turkmenistan’s territory.
Television
Turkmenistan currently broadcasts 7 national TV stations through satellite. Analog TV
feed of 5 national channels are receivable over the air across the whole country. In
some places of Ashgabat, cable service is available where satellite dishes are
restricted.
Additional information
The launch of the first Turkmen communication satellite is scheduled for 2014 for a
15 years lifetime.
The ministry of communication organizes an international exhibition, TurkmanTel,
each year for leading companies across the world to exhibit their technologies.
Turkmenistan At a Glance.
*based on Turkmenistan government estimate. www.data.worldbank.org/indicator
5. 5
Brief Telecommunication History
The government took its first steps towards going online in the mid-1990s under
former President Saparmurat Niyazov, when Siemens and Alcatel were invited to
develop the country’s internet. Throughout Niyazov’s reign, the internet existed
mostly for the use of government, academia, foreign diplomats and foreign-owned
businesses. There was little public internet access except at centres sponsored by
foreign aid programs.
In 2000, Niyazov banned the country’s four private ISPs, hence solidifying the
monopoly of state-controlled TurkmenTelekom. In 2002, he banned internet cafes,
after an alleged presidential-assassination attempt.
In 2003 however the government launched a long-term plan for social and economic
development that identified telecommunications infrastructure as a top priority.
Among other goals, the plan called for the addition of 1.8 million phone lines by
2020-the number needed for every household to have a phone. As of 2010, only
some 10% of Turkmen had a basic fixed line phone service, a mere 2% increase since
the plan’s launch.
In 2003, Turkmenistan’s higher education and research sectors (members of TuRENA)
were connected to the NATO funded Virtual Silk Highway via a 708 km stretch of fibre
optic cable and a satellite set up in Ashgabat and linked to Hamburg, Germany. A year
later, the cable was extended to the country’s eastern and western regions,
providing service to major cities such as Turkmenbashi and Balkanabat.
By 2007, Turkmenistan had four international fibre optic lines. These connect to:
Uzbek Telecom in the North, near Dashoguz;
Iran (and farther to Frankfurt via the TransAsia-Europe line) near Ashgabat;
Uzbek Telecom in the east, near Turkmanbat;
Turkmenbashi in the west, which is to be connected to Azerbeijan’s
AzTerraNet via a cable under the Caspian Sea.
6. 6
Source: The central Asian Research and Education Network.
Niyazov also initiated mobile service in the country by granting an exclusive license to
a private provider, US-based Barash Telecommunications (BCT) in 1996. He issued a
second license to state-owned TM Cell (also called Altyn Asyr) in 2004. The following
year, BCT was taken over by a Russian company, Mobile Telesystems (MTS), which
began ambitious expansion of services in Turkmenistan. Over the next six years,
mobile penetration sky-rocketed, almost all of it driven by MTS. In 2011, MTS was
forced to shut down when its license was revoked by the sitting president. In August
2012, the government reversed its orders and MTS resumed service despite losing its
grip as a market leader.
7. 7
Turkmenistan Overview
Turkmenistan is regarded by many human rights groups as one of the most repressive
regimes in the world.
In this closed and tightly controlled environment, the internet presents a novel
problem for the Turkmenistan authorities. While on one hand the government is
keen to promote it; on the other, officials are increasingly weary of its potential as an
outlet for political dissent.
In keeping with this ambivalence the government has taken a two-step forward, one-
step-back approach. It has promised ambitious infrastructure and boldly broadened
access over the past five years. At the same time, state controls continue to deter
users and stymy development.
Due to the lack of publicly available data in Turkmenistan, finding credible
documented information is difficult. This report draws most of its data from other
independent evaluators/researchers, including technical articles, corporate reports
and NGO studies.
8. 8
Political Effect
Upon his election in 2007, President Berdymukhamedov vowed to bring
Turkmenistan’s internet into the 21st century. He has also stated that internet access
is the right of every Turkmen citizen. In fact, many of his policy pronouncements on
telecommunications development give a glimmer of hope to Turkmenistan, at least in
terms of potential internet access.17 And he has taken some bold steps.
In 2009, he launched a new initiative to increase infrastructure capacity: the Central
Asian Research and Education Network (CAREN) project. Funded mostly by the
European Commission’s Europe Aid Cooperation Office (AIDCO), the project replaces
the Virtual Silk Highway, establishing broadband connections for universities and
research institutes via fibre-optic cables linked to GÉANT, the European data
network.20
The government reports that researchers now have much faster internet access than
before. The website of the Academy of Sciences of Turkmenistan claims there are
some 12,000 users on the TuRENA network, which has a download speed of 13 Mbps
– significantly faster than the top speed for ADSL access in Turkmenistan.21
For the general public, however, it is another story. Sources report woefully low
download speeds for all forms of internet access, and the country’s total bandwidth
remains extremely limited. Engineers report that the total bandwidth for
Turkmenistan is 650 Mbps. While this is a huge increase from the country’s 0.26
Mbps in 2000, it is still relatively small compared to that of neighbouring states.
Uzbekistan, for instance, had 1,250 Mbps as of October 2009.
Berdymukhamedov’s other internet-related policy movements – both forward and
back – include:
• lifting the ban on internet cafés (2007);
• permitting home internet connections for private citizens (2008);
9. 9
• hindering the growth of mobile phone service and 3G internet access by
suspending Russian-owned MTS’s licence (2010). At the time, MTS had
about 2.5 million subscribers (about half the population), its services
covered 83% of the country, and it was planning to offer 3G service. By
contrast, state-owned TM Cell had less than half a million customers,
and its coverage was centred on Ashgabat and its surroundings. In
2011, MTS was shut down altogether, leaving TM Cell as the sole mobile
provider, despite its low capacity (see Box 1, p. 5, and Figure 2, p. 6).
MTS has since regained its licence and as of September 2012, it had
reactivated 500,000 subscribers.
• introducing e-government, with plans for some 80 ministries and
government agencies to have their own websites. A new IT-focused
government department was also created (2011);
• signing a resolution to improve TM Cell’s poor service (2012). He also
threatened to sack the Minister of Information and Communications if
the service did not improve.
• vowing to integrate computers into the education system (2011).
Lenovo notebooks worth $26 million U.S. have been reportedly
distributed to 100,000 first graders. (While this move suggests a
commitment to creating Turkmenistan’s first “wired” generation, a lack
of connectivity means that very few classrooms will actually be online);
• supporting the Mejlis’ (parliament’s) efforts to use ICTs to strengthen
institutional capacity, legislative processes, control functions and public
outreach and encouraging the introduction of an electronic voter
registration system by the Central Election Commission and,
• reiterating support for the 2020 strategic plan, which would increase
the fibre-optic network by 2,500 km and connect core urban centres.
The government has made some decidedly internet-friendly gestures in recent years.
Yet Turkmenistan remains a highly restrictive environment for both internet access
and internet content, as the state continues to maintain tight control on both fronts.
10. 10
Mobile Sector
In 2010, Turkmenistan could have revolutionized internet access with a move to fast,
affordable 3G mobile service. But just as this opportunity was announced by the
Russian provider MTS, Turkmen authorities shut it down.
Between 2006 and 2010, Turkmenistan’s mobile service penetration rate skyrocketed
from 4% to some 63%. Mobile’s explosive growth was mostly driven by the Russian
provider MTS. By August 2010, its services covered 83% of the country, with an
estimated 2.5 million subscribers. By contrast, state-owned TM Cell was available
only in major cities, with about 400,000 customers.
In late 2009, TM Cell customers began receiving a very basic 3G service. But service
was poor and unreliable, and uptake was reportedly low.
In 2010, MTS announced plans to offer 3G services.
Given MTS’s extensive capacity, wide coverage and massive customer base, this
move would have created a cheap, fast and nearly nationwide option for internet-
capable mobile service.
However, within weeks of MTS’s announcement, the government suspended its
license. In January 2011, MTS operations were shut down altogether, with authorities
stating its five-year contract had expired.
TM Cell was left as the sole mobile service provider in the country, despite its
extremely limited range and low capacity. The company struggled to absorb MTS’s
customer base. In fact, demand was so high that officials reportedly suspended the
distribution of SIM cards temporarily in April 2011, with the exception of cards for
public officials and foreigners.
In a move designed to address the lack of wireless capacity, the Ministry of
Communications signed contracts with Huawei and Nokia Siemens in April 2011 to
upgrade and expand TM Cell’s mobile network. By August 2012 the government had
once more changed course. MTS’s licence was restored, and within a month it had
reactivated over 500,000 user accounts.
11. 11
*No data are available publicly on how many mobile customers have internet access.
Estimates for this report suggest a rate of about 14% of the population, with 6%
having 3G service.
Turkmenistan’s Mobile Monopoly game.
Source: Paul Budde Communication Pty. Ltd.
12. 12
Turkmen Netizens
Official government statistics show only 2.2% of the Turkmen population online. But
this number probably does not include mobile internet access. A field source with
knowledge of the area estimates mobile internet users to number some 700,000 with
300,000 of those using 3G services, using this figures it therefore means that 14% of
the population has mobile access.
There are clear signs that demand for internet access is robust. By 2010, there were
more than 20 times as many internet users as 2000(based on the low official
statistics), and the rapid increase in the number of mobile subscribers is particularly
striking, with growth rates exceeding 200% in some years.
Surprisingly, the government was once forced to call the military to quell popular
unrest in larger cities over a lack of new mobile subscriptions after MTS shut down.
Public internet centres sponsored by foreign governments and organizations report
string demand. These centres offer fast and powerful satellite connections and
services for which users-researchers, government employees, state journalists, and
the regular public-are willing to wait in line.
By way of example the Information Research Centre (IRC) at the U.S Embassy in
Ashgabat reported users queuing for 30 minutes or more just to use their terminals.
Their monthly usage rose 50% between 2007 and 2008.
Overall, indications suggest there is a burgeoning potential market of users who are
poised to go online as soon as access and service improve in Turkmenistan.
The major stumbling block is the TurkmenTelekom monopoly, which sits at the
strangled heart of Turkmenistan’s slow, expensive, censored and surveyed internet.
The government maintains direct control over the company. The director of
TurkmanTelekom reports directly to the Cabinet, bypassing the Ministry of
13. 13
Communications, which is normally in charge of ISP, as well as other related
industries, such as radio and television.
Lack of competition has led to astronomically high prices for some services.
Private Access.
The government began allowing private internet access in 2008, but uptake has been
slow. Satisfactory connections are rare outside the country’s capital, highly expensive
as well as slow, and require a tedious registration process.
Connectivity is virtually non-existent beyond Ashgabat and some major towns. This is
a major obstacle, given that 50% of the population lives in rural areas.
ADSL internet access costs a staggering $7,000 U>S per month for the highest speed.
Even at the slowest speed, an ADSL connection with no limits on traffic cost more
than half of the average income.
Hardware is also expensive. A basic desktop computer costs a the equivalent of two
month salary for the average Turkmen citizen.
Downloads speeds are extremely slow, estimated at 72 Kbps. By comparison,
neighbouring Afghanistan’s average speed is 150 kbps-more than twice as fast.
Acquiring access is also an administrative nightmare that can take several months.
Users must register their passports with TurkmenTelekom, agree to refrain from a
wide range of online activities, such as accessing websites containing untrue or
defamatory information, and even promise not to use foul language. A signature
from the local police station is required.
Internet Cafes.
Re-opened in 2007, state-run internet cafes offer higher speeds than most people can
afford through home access. The difference is relative, of course. Hourly rates are
also less expensive than monthly home-access plans, estimated at $ 1 U.S to $ 3 U.S
an hour, although this is still a significant sum for the average citizen.
14. 14
By 2012, there were 15 state-run internet cafes in the whole country, all of the major
cities. State surveillance makes people wary of using cafes. Customers must show
their passports or other identification and fill out a questionnaire giving personal data
and explaining why they want to use the internet.
In 2008, observers noted that most cafes had very few users. An exception seemed to
be in two particular locations-one in Ashgabat and another in Mary City. The reason
for the higher traffic in these locations remains unexplained.
Mobile Phones access.
Mobile access is a key avenue for internet use in Turkmenistan, including access via
mobile devices connected to laptops. Engineers report that TM cell leases a 300Mb/s
channel from TurkmenTelekom to provide internet access via smartphones.
Dramatically cheaper than fixed lines, mobile phones are used by some 63% of the
population, and the addition of internet access is relatively inexpensive. Estimations
put it at 14% the number of Turkmen that accesses the internet via mobile service.
6% access using 3G services ( which should provide full internet access in theory but
falls far short of this in reality).
Smart phones are expensive, but most remain more affordable than personal
computers. Nokia models that cost from $ 180 U.S to $ 240 U.S are the most
common. Mobiles running using the android platform are also becoming increasingly
popular. Sought-after models include the Samsung Galaxy, Sony Ericsson Xperia, and
various HTC phones.
Most mobile subscribers make full use of 2G services such as messaging: people often
exchange their mail.ru usernames rather than phone numbers, according to a
prominent blogger.
Cyberspace.
With most citizens using the internet primarily as a recreational tool, social networks,
forums, and chat sites such as odnoklassniki.ru, vkontakte.ru, and rambler.ru, are
15. 15
overwhelmingly popular (although it is worth noting that these are all monitored by
Russian security services).
Data compiled by Google insights on the most popular searches originating from
Turkmenistan also reflect a primarily social orientation, as well as a keen interest in
mobile services.
Chat forums are particularly popular. Teswirler.com was reportedly one of the most
popular Turkmen language websites, but was shut down permanently in July 2011. It
has been replaced by ertir.com. Many citizens also use talypar.com, a popular
discussion forum hosted in the U.S that was originally designed for students. These
chat forums are also routinely accessed from mobile phones.
Popular search engines include Google, Bing, Yandex poisk, mail.ru poisk and
Brothersoft (a software and freeware download website.)
Blogging is discouraged, but not illegal. Political blogs are effectively non-existent.
Instead, blogs function as a format for sharing information and knowledge about
relatively innocuous topics, including technology, new companies, and saving money.
However, the most important sources of information is not the internet but
television, through local, Russian or Turkish channels. Print media, while cheap, only
contains information from state agencies; subscription are compulsory for
government employees.
Monthly Cost of ADSL internet access.
17. 17
Institutional Framework
The ministry of communication controls eight state enterprises in the post and
telecommunication sectors. They are;
Turkmen Telecom ( fixed operator)
Ashgabat City Network
Altyn Asyr (GSM)
TV Radio/ TV Broadcasting
Spectron Administration
Turkmenistan post
Special Delivery Service
Training Centre
Under the 2000 Law on Communications, the Ministry defines sector policy, regulates
co-operation between operators, issues licenses, manages the spectrum, sets tariffs
and carries out investigations to check that operators conform to all laws and
regulations. The Deputy Chairman of the Cabinet of Ministers (equivalent to deputy
prime minister) is ultimately responsible for the communications sector, with the
Minister of Communications reports to him. The President and the Cabinet of
Ministers defines policy for the sector and the Ministry is tasked with implementing
this policy. Under the 2000 Law on Communications, the Ministry provides proposals
for the development of the sector, and is the regulatory body that regulates the co-
operation between operators. It also receives applications for licenses and issues
licenses (“Law on Regulation of Licenses”), carries out spectrum management (“Law
on Frequency Management”), establishes tariffs caps for residential line rentals and
local calls.
(Source: EBRD Communications Sector Assessment 2008 Page 4)
The law of telecommunications, passed in 1996, created the Ministry of
Communication to oversee and issue licences for telecommunications services.
The ministry was later expanded and named the Ministry of Information and
Communication (MIC). The MIC is both the regulator and policy maker for the
telecommunications sector.
18. 18
Regulatory Environment
The ministry and the regulator are the same body. The general director of Turkmen
Telecom reports to the cabinet of Ministers, as does the Minister of Communications.
There is a general acceptance of allowing alternative operators into the market. It is
worth noting that political interference is inevitable. In Turkmenistan there exists
only one internet licence, and given that the role of tariff regulation by the cabinet,
he close examination by the ministry of commercial factors before issuing licences,
suggests that there is heavy government direction of the market.
While many countries have legislation that requires fair and non-discriminatory
procedures, they are not evident in Turkmenistan. Likewise, the practice of publishing
the radio frequency plan on a website while it’s now a normal practice, it isn’t the
case in Turkmenistan yet.
Ease of Access
Given the strong influence of government with regards to market activities, the
process of licence of market application to market operation is also handled by the
government and not an independent body.
The fees for operating license are extremely low. The licenses are also fixed across all
sectors of the Ministry of Economy. The licenses are valid for three years renewable.
There are 32 different types of licenses in the communication sector. The license
application consists of a two page form and 10 defined documents attached. The
ministry then proceeds to submit them to a commission (representatives from the
eight state bodies); here each member gives their opinion concerning the application.
There are no exclusive rights explicitly defined.
19. 19
Any operator is theoretically allowed to offer internet services provided that they
have a license, but at present there is only one license holder, Turkmen Telecom.
Foreign companies are not allowed to own land, instead they are required to lease a
building. Typical premises that foreign companies are allowed belong to the
government and the procedure necessary to lease the building can at times be
lengthy and tedious.
Also worth noting is, there exists and Inter-Agency Commission on Radio Frequencies.
It takes account of all sectors, broadcasting, telecommunication and military.
However, the regulations published are sector specific.
Setting tariffs
Despite the fact that the Ministry of Communication has enormous market
power/control, they are by law required to invite other specialist from other
ministries to discussions before making regulatory decisions. They may also invite
private operators, however in most cases the ministry of justice represents their
interests.
Tariffs are set by the operator themselves. However, before a license is issued, the
ministry examines tariff proposals to ascertain that certain tariff limits are not
violated.
If a private operator wishes to change retail tariff in the course of his business, they
are required to consult the ministry before implementing these changes.
20. 20
Competition safeguards
There exists no competitive safeguards that are in existence. The main regulatory
device is investigation which is a defined obligation of the ministry. The ministry
issues an order to carry out a commission. An inspection commission is formed and
invites competent state officials to carry out the inspections.
The inspections can cover technicality, quality, accounting and legal issues. The
accounting issues include, tariffs, customer contracts, costs and profits, to see if they
exceed predefined state norms.
Operational conditions
The introduction of competitive safeguards such as carrier selection and pre-selection
and number portability is lacking in Turkmenistan at the moment. However, the
government has established some kind of reference interconnection offer as a basis
for interconnection agreements.
Universal Service
Turkmenistan does not have explicit universal service obligations or obligations that
involve new entrants in the market.
21. 21
Targets
The market is governed by the government’s medium term plan. Communication
sector plans are inclusive.
The president of Turkmenistan had publicly stated a goal of 1 million internet users
and 1 million mobile subscribers by the end of 2008, then 2 million internet users and
3 million mobile users by the end of 2009. The government is also believed to be
toying with the idea for the inclusion of a third mobile license so as to enhance the
development of the mobile market. Additional development in the areas includes the
installation of fibre optic cables throughout the country.
Tariff rebalancing has been discussed but resolution of the issue is outstanding. Since
then however, there has been a higher pace of development. The only service that
has been provided to customers is now 50 kbps dial-up, by Turkmen telecom, though
leased lines are provided to business customers for higher capacity internet access.
Permission has now been given for broadband national WiMax frequencies.
26. 26
State Control
Turkmenistan’s authoritarian regime exerts aggressive controls over the digital
content available to its citizens.
Turkmen citizens are relatively unsophisticated in evading government censure. Few
know how to use circumvention tools, and self-censorship is common.
The regime uses a range of control tactics: centralized media control, content-
blocking, surveillance, and severe penalties.
Centralized Media Control
State owned TurkmenTelkom holds a monopoly on all forms of internet access, from
mobile phones to fixed line connections. All internet channels pass through a central
hub under government control, which enables both censorship and surveillance.
As noted earlier, the general director of TurkmenTelekom reports directly to the
cabinet. The government also controls all media outlets, including nominally
independent outfits. Foreign stations are accessible only to a handful of people with
satellite dishes or shortwave radio.
Content blocking
Little is known about the mechanisms by which the Turkmen government
implements internet censorship. There are no public records or official documents
that describe who is tasked with deciding what to filter, nor is there a record of the
process according to which sites are blocked. Available information is patchy at best.
Censorship is centralized. There is no publicly disclosed list of blocked sites in
Turkmenistan.
Censorship practices may be difficult to scale as they require specific approvals from
a very limited number of officials.
27. 27
The available evidence suggests that the system is simple and relies on a predefined
block lists. TurkmenTelekom possesses deep packet inspection technology that can
be used to filter at the keyword level.
Severe penalties
Under article 132 and 133 of the country’s Criminal Code, Turkmen who libel or insult
government representatives may face fines, forced labour or up to one year in prison.
Insulting the president may result in a five-year prison term.
Telecommunications infrastructure
Turkmenistan has experienced a number of problems relating to communications
technology.
Despite recent efforts to upgrade the country’s telecom infrastructure, the telephone
network remained poorly developed and many villages have been left without
telephone services.
There has been a minimal increase in the number of main telephone lines over the
last decade; consequently fixed-line teledensity has really only marginally increased
over the last 20 years.
Turkmenistan also launched a limited coverage 3G network in 2010.
In the meantime, Turkmenistan said its working on a project designed to introduce
mobile voice services to currently unserved and inaccessible settlements in the east
of the country.
The operator said it aimed to use a combination of alternative energy sources for the
project to enable those in the Koyetendag district of to access voice services.
Alternative power sources being tested include wind turbines, solar modules and
batteries. If the testing proves successful, MTS said it would look at replicating the
installations in other rural and remote areas.
28. 28
Turkmenistan’s fibre-optic links to the global internet.
Source: The central Asian Research and Education Network.
Conclusion
The telecommunication sector is still relatively young and has enormous potential to
succeed. The main impediment has been the strict control enacted by the
government. However, the current government led by President Gurbanguli
Berdymukhamedov, has shown commitments to reforms and welcoming foreign
investors. With cheap energy readily available, drastic improvement of infrastructure
is conceivable as modern forms (including software) of communication slowly make
their way into the sector.
Despite these assurances, it doesn’t match the reality on the ground. Maintaining a
tight control over the internet remains a key priority. The regime is extremely aware
of the potential of the internet as a vector for dissent, and for potentially exposing its
secretive practices to unwelcome international scrutiny.
29. 29
The state’s method of monitoring and surveillance are basic; however, citizens’
knowledge of alternative such as circumvention tools is likewise minimal. For the
most part, netizens censor themselves, and avoid looking for trouble.
Economic analysts have praised Turkmenistan for weathering the global recession
better than any other country in the region, and this success has been reflected in the
continued robust progress in telecommunications market penetration.
The other element that makes Turkmenistan’s telecom growth impressive is the low-
level of telecommunication infrastructure on which the growth has rode on.
Fortunately, the current president has realized the importance of this industry and
has approved massive and rapid investments in it.
In conclusion, Turkmenistan remains in a kind of online limbo, torn between the
benefits of joining the wired world and the risks of losing control over information
and communication within its borders.
SOURCES
This report was prepared thanks to a multitude of contributors whom we’ve quoted
extensively and relied on their anonymous sources for some of the data presented
herein.
They include and not limited to: The SecDev group, Freedom House, OpenNet
Initiative, World Bank, United Nations, ITU, BBC monitoring, IDC, Paul Budde
Communication, Economist Intelligence Unit, U.S embassy Ashgabat, TuRENA, EBRD
Further reading and comparison to the region and Europe can be recommended in a
report by the EBRD titled Comparative Assessment of the Telecommunication Sector
in the Transition Countries. Assessment Report Turkmenistan. December 2008.
30. 30
Energy industry analysis
Introduction.
Natural gas production is the most dynamic and promising sector of Turkmenistan’s
economy.
The country is ranked among the top six countries in the world with the largest
natural gas reserves and 20th
in terms of gas production. It is ranked 97th
in the world
on the basis of its GDP, which is approximately $33.68 billion.
Turkmenistan has several of the world’s largest gas fields, including 10 with over
3.5Tcf of reserves located primarily in the Amu Darya basin in the southeast, and the
South Caspian basin in the west.
Extensive hydrocarbon/natural gas reserves, which have yet to be fully exploited,
have begun to transform the country. Recent major discoveries at South Yolatan in
the prolific eastern part of the country are expected to add to the current proven
reserve amounts.
Gas production increased rapidly between 1998 and 2008, when it reached 71billion
cubic metres. In 2009 it dropped by 45% to 39bcm due to the global recession and
the fall of international gas demand.
In 2012, foreign investment was more diversified, with 57% on the energy sector
(90% in 2011) and 27% in the chemical sector, with the rest going to the
transportation sector.
According to the World Bank, foreign direct investment was $1.4 billion in 2009, up
65% from 2008 and country officials anticipate higher investment in the future.
As a result, Turkmenistan is a net exporter of electrical power to central Asian
republics and its southern neighbours. The Hindukush Hydroelectric Station has a
31. 31
capacity of 350 megawatts, and the Mary thermoelectric power station has a rated
capacity of 1370 megawatts, just to mention a few.
Until 2010, two thirds of Turkmenistan’s gas went through Russian state owned
Gazprom, with recent developments, new gas export pipelines that carry Turkmen
gas to China and to Northern Iran began operation.
According to a decree by the People’s council (parliament) in August 2003, electricity,
natural gas would be subsidized for citizens up to the year 2030.
Regulatory environment.
The Turkmenistan natural gas Company (Turkmengaz) under the auspices of the
Ministry of Oil and Gas controls gas extraction in the country.
Seeking to attract more foreign investment and diversify its export routes, the
Turkmen government began reforming the country’s energy sector and regulatory
environment. In March 2007, the government established a hydrocarbon regulatory
authority, State Agency on management and Use of hydrocarbon Resources, to issue
licences and contracts for oil and gas development and provide greater revenue
transparency.
In 2008, Turkmenistan also passed a Hydrocarbon Law to provide greater legal
transparency in ownership of oil and gas projects.
