Presented by Kazakhtelecom
I have recently returned from a business trip to the U.S., where I had to travel about 3,000 miles around the country. I was shocked at how badly the mobile and wired Internet works in one of the world’s most developed countries.
As soon as I left New York for just a couple of hours, the AT&T signal level was down by one line, then by two lines, and in the small towns of the Tyoga Forest region there was no connection at all. I could hardly begin to follow my route without having the Google Navigator connected to the Internet, and it took me about an hour to circle around in search of a network.
During this two-week trip, the LTE speed hardly exceeded the 10 Mb/s-measure and the high-quality connection ended immediately outside the main roads or big cities. What’s more, AT&T, together with Verizon, claim to provide the best Internet coverage in the US! My colleagues who were using T-Mobile and Sprint services were even less fortunate — for most of our trip they had no connection at all.
The wired Internet also leaves a lot to be desired. Only 25 percent of American households have fiber-optic connectivity, and the above-mentioned 10 Mb/s is the limit of American internet capability.
The reasons for this are totally clear: the huge expanse of the country, many areas with an extremely low population density (where cellular towers are economically irrational) and some with an extremely high population density (where the network is overloaded all the time), the complicated procedure for installing new base stations, the protests of radiophobics, etc.
How do we solve such problems in Kazakhstan?
In Kazakhstan, where I come from, such problems are very familiar. The country is comparable in size to Argentina and is five times the size of France. But only 18 million people live here, and most of them in villages situated thousands of kilometers apart.
In fact, now we are solving the same problems that North America is faced with. A few years ago, when the country digitalization began in Kazakhstan, it turned out that the increase of mobile broadband access penetration by 10 percent can lead to a GDP growth of 0.6-2.8 percent.
In monetary terms this is equal to $500-2000 billion
Mobile Internet penetration growth of just 1 percent leads to about 0.2 percent of GDP growth. What is the use of having Uber available in the country if a person has no Internet connection to download mobile applications? What is Airbnb good for if the room/property owner cannot respond to the messages of potential guests and must go to the neighboring town in order to find connectivity to the network?
That is why digitalization in Kazakhstan began with building fiber-optic lines and launching 3G and 4G.
From 4 percent Internet penetration to 73 percent in just over a decade
Back in 2004, the Internet penetration of Kazakhstan was only 4 percent; now 73 percent of the population has access to the network. During this time, the country’s GDP (due to its buying power parity) has more than doubled, increasing from 190 billion to 410 billion. Of course, this is not only because of the network, but it is certainly a contributing factor.
Over the next two years we are going to increase the FTTH coverage to 78 percent and launch the first 5G network in the hope that digitalization will increase the country’s GDP by 5 percent by 2025.
Why are some regions rich and some poor?
There is one similarity between Kazakhstan and the U.S. — the worse the access to the Internet in a particular region, the less economically stable the region is. In the United States I have found myself in remote areas many times, where people live in fields in their trailers.
This picture reminded me of the situation in Kazakhstan in the 1990s, when the GDP was the lowest in the region, and the country was rapidly rolling to default. Some remote regions of the country were like the ones from Western movies, and people’s salaries were just several tens of dollars per month.
3G, 4G, and optic launch gave new life to the neglected regions. Villages without qualified teachers received access to Coursera and EDX, and people gained the ability to consult doctors remotely, as well as check the results of their tests.
Moreover, talented teachers and entrepreneurs received the opportunity to earn money online. The best egovernment in the region, better than that of many European countries, has also appeared.
One more important step to overcoming digital inequality is the optimization of content delivery to remote regions. Programs such as Google’s global cache, Facebook Network Appliance, and Akamai AANP allow the hosting of caching servers in the regions, so that residents can receive content much faster than if they try to download a Facebook video from a California server. This reduces the final cost of the Internet per individual user and gives better access quality.
To my mind, it is strange when the world’s top countries spend billions of dollars on military programs, but at the same time forget about basic infrastructure like a good Internet connection.
In the 21st century, having a high-quality Internet connection is almost as important as access to roads, medicine, or education.
Nurlan Meirmanov is Executive Director at Kazakhtelecom, the largest telecommunications company in Kazakhstan. “Kazakhtelecom” is a state-owned company with $1,2 bln net assets value, $640 mln revenue in 2017 and sustainable growth of +64% of assets value in 2014-2018. It’s market share in the country’s telecom is 40 percent, mobile – 25%, TV – 45%. It has 9.5M subscribers.
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