TV markets are growing in Central Asia driven by OTT and mobile services impulses

With a total of 77 million inhabitants, Central Asia represents a large market for telco operators. But the local political, geographical and economic contexts have been constraining the development of wireline and wireless connections over the last two decades. Looking at the evolution of TV markets in the region over the past three years, we nonetheless observe growing opportunities for operators and broadcasters. Since 2018, very few foreign telco operators remain active in the region. MTS terminated its operations in Turkmenistan in 2017. Telia also exited the region and sold its operations in Tajikistan to the Aga Khan Fund for Economic Development in 2017, in Kazakhstan to the state-owned company Kazakhtelecom in 2018 and in Uzbekistan to an Uzbek government-owned entity in 2018. The last major foreign telcos active in the area are Russian Veon, which operates the brand Beeline in Kazakhstan and Uzbekistan, and Megafon operating in Tajikistan. Local markets are dominated by state-backed entities: Kazakhtelecom, Uzbektelecom, Tajiktelecom, Kyrgyztelecom and Turkmentelecom. In Turkmenistan, the state-owned telco is not challenged by any competitor. In other markets though, there are three to five active mobile network operators who often also provide broadband services. Mobile penetration reaches 135% of the population in Kazakhstan and 118% in Kyrgyzstan. As mobile operators in the region are getting more and more data subscribers, they develop additional services including video-on-demand and OTT pay TV plans for mobile devices. In Kazakhstan, mobile OTT pay TV is leading the growth of the pay TV segment. Kcell's OTT service, branded MobiTV, was launched at end 2016 and reached 850 000 paid subscribers at Q3 2020, more than 10% of its mobile subscriber base. Veon also launched a mobile OTT, BeeTV, in its operative markets in 2019 through a partnership with Russian streaming service leader Ivi. In Kyrgyzstan, mobile operator O! launched a similar offer in 2016, and Megacom launched MePlay last year. Meanwhile, the development of fixed wireline broadband connections enables operators to develop IPTV services. In Uzbekistan, where the broadband market is highly fragmented between several tens of internet provider services, most operators are offering interactive TV services through broadband connection for 10 to 30% of monthly internet subscription fees. To keep up with this increasing competition, legacy cable operators also started offering broadband and IPTV services for the last four years, like Spectr-IT, Stark-TV, Freelink or Avianet. In Kazakhstan, IPTV already reaches one tenth of TV households. TV networks in the area are dominated by state-owned or state-backed companies whose owners are often related to the administration's officials. State administrations still have an overwhelming influence on media outlets. In Kazakhstan for example, public funding still accounts for more than 80% of TV networks revenues while the advertising...