1st International Middle Asia and Caspian
Countries Telecommunication Conference
(Caspian Telecoms Conference) was held in Istanbul.

Liberal telecommunication wind in Caspian

Ministers of Communication of Turkey, Azerbaijan, Kazakhstan, Tajikistan, Uzbekistan, Turkmenistan, Kyrgyzstan and Georgia and their representatives came together in Istanbul within the scope of 1st International Middle Asia and Caspian Countries Telecommunication Conference (Caspian Telecoms Conference) in order to declare their opinions on the subject of Regional cooperation and national and regional telecommunication investments in Middle Asia. Besides above listed seven countries, high level ministerial representatives of Russia and Iran which are important neighbours of Caspian countries and delegations from European Commission, United Nations, World Bank, International Telecommunication Union (ITU) and EBRD have participated in this important conference that lasted three days. Minister of Transportation Mr. Oktay Vural, President of Board of Directors of Turkish Telecom Mr. Ibrahim Hakkż Alpturk and Member of Telecommunication Committee Mr. Rasit Gulhan were ready in the conference that was held in Hilton.
Among the main subjects discussed in the conference were the development of the fiber optic network -called Trans Asia European- of 20 kilometres extending from China to Germany and the satellite networks of Russia and Commonwealth of Independent States. Also the leading companies of the sector from all over the world showed interest in the conference for the purpose of creating investment opportunities and supporting the changes.
National telecommunication companies of Middle Asia and Caspian countries which are already privatised partially or in the process of privatisation attracted attention with the resolute way of behaving that they followed for the purpose of attracting the grand foreign funds. In the performed evaluations it is put forth that the economical and social status of the region are important key factors for a strong telecommunication infrastructure. It is also stated that the Asia telecommunication network is a developing network and at present, uses the equipment that is left from Soviet Russia. Digitalising the networks and enlarging the capacity is found to be important from the point of view of its effect especially on the rural areas which the stationary line with a capacity of 4 lines per 100 people is laid on. Unexpected highness of the regional investments on the internet technologies was one of the subjects of the agenda.

"Priority must be given to the incitement of the liberalisation, competition and telecom investments"
Minister of Transportation, Mr. Oktay Vural who made a speech on the opening ceremony of the conference expressed his belief in creation of new horizons in the region through this meeting. He stated that "this conference is an important environment for the Caspian countries to develop the cooperation on the field of telecommunication and also for the formation of a common market. A different development model based on retaining information resources is taking place of the classical development models. Telecommunication sector is certainly one of the most important factors of this change". Mr. Vural emphasised that "telecom sector has become the basic dynamic of the information economy and has added a new dimension to the industrialisation contention of the countries that are in the process of development. The developed and developing countries shall take all the necessary administrative, technical and legal measures that will provide the appearance of a telecom market. Among all these, an atmosphere that may incite the liberalisation, competition and telecom investments in the telecommunication sector has got the priority."

Turkey the bridge
President of the ITE Marketing Group, Mr. Steven Warsaw who has made the opening speech of the conference said that " our meeting's being the first Caspian Region Telecom Conference and such a participation from Turkey and countries of Caspian region shows that there is a big potential in this region on the subject of telecom. Besides, it proves that Turkey has regained its developing potential and previous place in this region." Mr. Warsaw pointed out that Turkey was a strategical bridge between Asia and Europe. He said that " Turkey's historical and cultural connections with the Caspian region countries has made Istanbul an ideal city for the Caspian Telecoms Conference. Participation of high level authorities of the participating countries has shown the importance of regional cooperation in telecom industry and puts forth the existence of a big investment opportunity in the region for an international telecom community. Satellite communication, mobile communication, development of local telecom networks and modernisation of regional networks are the privatisation efforts that are still continuing in most parts of Middle Asia telecom industry. Importance of the presence of a healthy telecommunication and information technology infrastructure can not be undervalued. This infrastructure is seen as a key factor in the socio-economic prosperity of the countries and for this reason, it's accepted as a subject of priority by the Middle Asia and the Caucasus countries."

Contribution of TT to Turkish telecom sector
Member of Telecommunication Committee, Mr. Abdullah Rasit Gulhan gave to the participators a detailed information about the Telecommunication Authority, its operation and activities. Mr. Gulhan who made explanations on the results of WTDC-02 and the conference which was realised in March by ITU in Istanbul stated that " until today Telecommunication Authority has carried out all its studies in the form of being parallel with the Regulations of European Telecommunication Standards Institution (ETSI) and thanks to that, the Turkish telecom sector has obtained a competitive position in Europe. As it is the same in world, telecommunication sector of Turkey is also in the process of reconstructing and the privatisation studies will pave the way for the sector." Mr. Gulhan has expressed that "nearly 25 licences were granted as the result of the licensing studies that has initiated by the effectiveness of the Law nr. 4673 in May 2001 and the process is continuing. In addition to these, licensing studies in the systems such as multimedia messaging (MMS), broadband and TETRA are also continuing." Mr. Gulhan who has emphasised the importance of the Caspian region for Turkey said that "in Caspian region there are not any regulatory authorities other than Turkey and Georgia and Turkey is ready to share its relevant experience with these countries. Turkey may become a production centre if a reduction can be provided in some taxes, the incitement mechanism can be developed and a positive arrangement can be realised in energy prices."

"We are the world's 13th biggest telecommunication company"
In his speech, General Manager of Turkish Telecom Mr. Ibrahim Hakkż Alpturk gave information about the Turkish Telecom. He declared that " Turkish Telecom which produces and also sells service is the world's 13th biggest telecommunication company". Mr. Alpturk said that "Turkish Telecom has 4 satellites and only one of them is common and expressed that Turksat A2 is one of the strongest satellites of Europe. In the Caspian region, Turkey is the first in the utilisation of the mobile services and second in the utilisation of internet. Within the national borders Turkish Telecom has almost completed its mission. Its objective is to carry its accumulation to the countries of the region and use it for them. We are always open for cooperation."

According to the explanations of Alpturk, some data pertaining to Turkish Telecom is as follows;

Switchboard line capacity : 21.508.886
Telephone subscribers : 18.949.512
Subscriber density : 28.32 %
Number of PSTN : 161.808
Digitalisation rate of switchboards : 88.80 %
Digitalisation in transmission between
the switchboards : 97.85 %
Number of cable TV subscribers : 907.000

"There is financial problem in the region"
Mr. Jan Glinski who is from Alcatel and responsible from Middle and East Europe and Russia gave information about Russia and the Caspian region. Mr. Glinski said that "the importance of the telecom sector is comprehended in the region. There are problems regarding how to provide finance for this. When a regional evaluation is made, we see that in all countries transition from mobility to internet is being performed. Internet and mobility are important propulsion of the region. Arrangements, laws and legislation are very important for the region. A sensitive study shall be performed on the subject of privatisation. As long as the relevant studies are not completed investments will not flow to the region. According to the other countries of the region Russia, Turkey and Iran are more developed. With the exception of these countries, the region is an open area for investments. A population of 500 million is living in the area and the present income obtained by the operators is around 25 billions Euros. The procuring market is around 5 billions Euros. There is a big potential in the region. In Russia there is a big investment potential. Russia overcame the crises it experienced a few years ago but still is not developing rapidly. Legislation procedures to be performed are not progressing quickly. In order to prevent the disappearing of the potential a stop must be put to the slow development that Russia is experiencing. Mobile services will be the basic development locomotive of the region since they are not alternative services and access is provided very easily. Variability of the climatic conditions in the region shows that it will be very suitable to use the satellite services."

Kazakhstan telecommunication market
Mr. Askar Esengarayev who made a speech in the conference gave information about the Kazakhstan telecommunication market. Mr. Esengarayev said that "development of the telecom sector and the reasons of being under-developed are being discussed in the Ministry of Telecommunication and Communication of Kazakhstan. Programs existing in the telecommunication sector of the country have priority. In the year of 2001, number of the stationary phone lines have come close to 2 million. The capacity of the phone network has reached to 2.4 million lines. Within the last year there occurred an increase of 6% in this figure. International phone traffic has shown an increase of 18% within the year of 2001. Together with the stationary lines we are also developing in the mobile phones. By the beginning of this year, number of mobile phone subscribers have reached to 800.000. Increment rate of Kazakhstan's GSM sector is 28%. From the year of 1998 to 2002, the work volume in the sector have increased from 250 million dollars to 800 million dollars. While the number of GSM lines are increasing in our country, a decrease is being experienced in the number of stationary phone lines. Within the telecom sector more than 700-license -covering various services from basic to mobile- were given by the Ministry of Defence. In Kazakhstan the most rapid development is being experienced in the internet sector. Around 130 licenses were given to ISS's. Field of mobile telephone covers ¼ of the telecom field and there is a big competition in this sector. There are 4 GSM operators in Kazakhstan. Total number of GSM subscribers is approximately 1 million. Internet constitutes the 7% of the telecom sector. Studies regarding the digital broadcasting are continuing. Legislation studies are also continuing. Privatisation is progressing step by step. The first stage will be completed within 2 or 3 years."

Turkmenistan is not digitalised yet
Mr. Berdi Mamedov, the Technical Management Director of the Ministry of Communication of Turkmenistan made a speech and told about the telecommunication sector of Turkmenistan and its infrastructure and stated that "many telecommunication companies are using demoded equipment since the independence of Turkmenistan. Phone systems of the country was based on the analog telecommunication equipment. The modern communication systems such as electronic automatic switching exchanges, digital communication systems, fiber optic and metal cables were not sufficient. At present, through the international switchboard in Askabat Turkmenistan has direct channels to all its neighbours and satellite connection and digital wireless lines to some countries such as Iran, Turkey, Italy, Russia and USA. The intense study pertaining to the modernisation of the first network of the country is proceeding. Modernisation of the phone system in the big cities of the country is considered to be very important. Although 64% of the phone system in the capital Askabat is digitalised, average of the digitalisation of the other big cities of country is 29%.
Ministry of Transportation which considers the legal arrangement of the telecommunication industry very important has made studies on the determination of the norm basis of the legislation and industry. Broadening of the new services such as internet services is considered to be very important. Cellular communication on GSM standard will be developed more."

Privatisation has the priority in Uzbekistan
General Manager of Uzbektelecom, Mr. Hakim Mukhitdinov said that they are targeting to become a united whole with the world market by developing the telecom sector on world standards. He also stated that together with their foreign partners they have realised arrangements in the sector. Mr. Mukhitdinov made a speech in the conference and expressed that " there are more than 1.600.000 telephone subscribers in Uzbekistan. 85% of the phone capacity is being used." Mr. Mukhitdinov gave the following information about the telecommunication sector of Uzbekistan: " More than 88.000 phone lines are formed within the year of 2001. In general, fiber optic cables are being used in the country. Mobile communication is developing rapidly. Number of our mobile phone subscribers have reached to 5.000. We have two satellite ground stations. The three operators existing in the country have GSM licenses. Uzbek Telecommunication has connection to 120 countries through fiber optic. There are transit stations. Through these stations we are broadcasting to Middle Asia. Although the telecom sector of Uzbekistan is developing rapidly it needs modernisation. Therefore, concrete measures are being taken. One of the programs of the country's sector that is given priority is privatisation. They are working with their foreign partners in order to develop this program. 2000 Uzbek Telecom is put into the state of holding. There had to be new steps within the scope of privatisation these steps are being taken since the year of 2000. New services and competition power have risen after drawing the foreign investments to local sector. Now, uniting of the regional operator under a single roof is being realised. Share of stocks are being sold in order to provide the realisation of the potential foreign investment. Modernisation program of the infrastructure and hardware that will be carried to international standards by Uzbekistan in the year of 2002 is accepted. This program is a project with some stages. Studies regarding the digitalisation of the regions and districts of the country has initiated within the first stage. The figures show that digitalisation has spread over Uzbekistan. There are 5 international tenders. This is done for the purpose of drawing the international capital to the country. There are 11 companies in the sector that are based on partnership and they comprise 35% of the sector. Our goal is to serve on international standards. In the year of 1998 Transasia Line was constructed. Lines were set up from China to Germany and on this line data transfer is being provided. Fiber optic connections are very much developed in Uzbekistan. New studies on systems such as IP Phone, establishment of new databases and cordless communication are the points that are at issue. There are deposits pertaining to the protection of the rights of foreigners. We are in cooperation with countries such as Japan, Germany, England, Korea and Malaysia. Many studies are performed on the subject of deposits for the development of the Information and Telecommunication Technologies."

Kyrgyz Telecom is being privatised within this year
Mr. Samsaly Alymkulov - Chief Adviser of Ministry of Transportation and Communication- gave information about the telecommunication sector of Kyrgyzstan and said that " In the year of 1996, government of Kyrgyzstan realised the city telecommunication project. The main objective of this project was to provide telecom connections everywhere in Kyrgyzstan and exits to all over the world. With this project, main lines of the Kyrgyz information and telecommunication sector are determined. Digitalising projects are being carried out. From 1996 on, the sector is experiencing a swift development. This year, we are expecting the privatisation of National Kyrgyz telecom operator. Within this year 51% of the Kyrgyz telecom shares will be subject to privatisation. Law of Privatisation is accepted and relevant studies are proceeding rapidly.

General Liberalisation View of the Caspian Countries in the Telecommunication Sector :

THE SEMINAR REALISED COLLECTIVELY WITH ETSI

1. On the second day of the International Caspian Telecoms Conference, a joint seminar was realised in which ETSI, our Institution and representatives of the Turkic Republics have participated.
Following the opening speeches of Mr. Karlz Heinz Rosenbrock - General Manager of ETSI- and Mr. Abdullah Rasit Gulhan - Committee Member-, ETSI and its standards are presented and explained and subjects such as the necessity of ETSI and its standards for the regional integration and close connection of the standards and regulation with the Caspian Region were considered. Vice-President of the Institution, Mr. A. Hicabi Erdinc made a presentation on "Developments Regarding the Arrangements in the Countries of Caspian Region".
After the participant of Uzbekistan who made explanations about the telecom arrangements in his country, a presentation was performed on the subjects of relation between our Institution and ETSI, the standards, relations between the members and targets of our Institution. In the seminar which was realised collectively with ETSI, there were negotiations with ETSI participants and our impression is that ETSI will warmly welcome any cooperation that will be realised with our Institution.

RESULT
Excluding a few of the countries, when it is looked in general it is seen that with respect to telecommunication infrastructure Caspian Region is very behind the countries that are developed. A sufficient amount of investment on the field of telecommunication can not be realised since demand is limited because of the economical conditions. The basic problems of the Caspian Region on the subject of telecommunication are as follows;
· Telecommunication infrastructure of the countries in the region are quite poor in general. At locations other than big cities, the network is not sufficient. Communication with rural areas is pretty hard.
· Although many investment projects are planned, there are not adequate number of digital lines. Analog telephone lines are being used in general.
· Infrastructure works are impeded in some of the regions because of the unprovided necessary political stabilisation and lacking governmental authority. Such a situation obstructs the foreign investors' and international institutions' -that desire to make investments through donation- heading for region.
· Until today, countries of the region were not very successful in receiving the foreign aid that is necessary for the development of their insufficient telecommunication infrastructures. Because of their economical situations sufficient investments can not be performed by themselves either.
· Countries of the region can not make future plans on the subject of telecommunication because of striving against problems such as political unstability, economical crises and security problems.
Another important point to be emphasised here is that these countries do not have economical power which is necessary for the strengthening of their telecommunication infrastructures. In other words, they need foreign investors also for the strengthening of their telecommunication infrastructures. In order to provide the coming of the foreign investors, the concerned countries shall remove the factors that are impeding the liberalisation of the sector by constituting the legal infrastructure of the telecommunication sector rapidly.
Recently, the most attracting development in the world telecommunication sector is; determining politics, performing administrative arrangements and business activities in the sector are separated from each other. It is already known that telecommunication sectors of the countries that have timely realised such separations have provided a significant development. Within this framework, the sector structure that finds field of application in the developed countries includes in general the determination of the general bases, targets and politics of the sector by the government that bears political responsibility, performance and application of the necessary technical and administrative arrangements in its activities by the autonomous regulatory authority and in return, fulfilment - within the economical bases - of its business activities by the commercial institutions.
Because of social reasons such as regulation, protection and provision of competition, subscriber agreements, protection of the service quality and similar consumer benefits, protection of handicapped and old people and sub-income groups the macro targets of the country are constructed for directing the sector like R&D, national defence and the requirements of emergency conditions. Regulation in telecommunication sector is the technical and legal arrangements -that will be realised by the regulatory authorities- directed towards the managers who are dominant in the market. In other words, it is determining the rules of the regulation game.
Although some countries have significantly proceeded in the liberalisation of the sector, monopoly position of the operators (incumbent) that are located in many countries is continuing. In many of the countries, independent regulatory authorities have not been established yet. Among Caspian countries, independent authorities are formed only in Turkey, Georgia and partially Kyrgyzstan. During the conference Uzbek authorities stated that they also have an independent authority. Relevant establishment studies have initiated in Kazakhstan.
There are big cooperation opportunities in the telecommunication sector between Turkey and Caspian region. We, as being the Telecommunication Authority, can provide significant contributions to the studies pertaining to the establishment of the independent regulatory authorities which have newly initiated in these countries. At the end of the bilateral negotiations realised during the conference, we came to the conclusion that these countries are ready to warmly welcome all kinds of bilateral cooperation projects.
As a result; cooperation of our Institution -on the subjects that are within the field of its activities- with these countries which we share the same geography and common values and which mark out for a good future but under-developed with respect to telecommunication and transferring its relevant knowledge and experiences to these countries is thought to be very beneficial.