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RUCPDOC/USDOC WASHDC 0149

UNCLAS SECTION 01 OF 02 DUSHANBE 000430 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON EIND EINV ETRD PGOV TI
SUBJECT: TELECOM IN TAJIKISTAN: SCENE-SETTER FOR USTDA CONFERENCE IN 
ALMATY 
 
DUSHANBE 00000430  001.2 OF 002 
 
 
¶1.  (SBU) SUMMARY.  While Tajikistan's presence at the upcoming 
US Trade and Development Agency Telecommmunications Conference 
in Almaty will be thin, the vibrant and competitive Tajik 
telecom sector continues to attract both consumers and foreign 
investment.  Nine major companies serve approximately 800,000 
mobile customers throughout the republic.  Success brings 
unwanted attention as well - President Rahmonov capriciously 
decided to tax telecom companies on the importation of 
equipment; and the Ministry of Transportation and Communications 
has plans to create a single gateway to control digital traffic. 
 The government-owned land-based monopoly Tajik Telecom 
struggles to keep up, despite official market interference. 
Undeterred, the entrepreneurial Tajik cellular phone operators 
debate pricing structures and "third generation" technology. 
END SUMMARY. 
 
¶2.  (SBU) The Tajik Ministry of Transportation and 
Communications is unlikely to play an active role at the April 
3-5 conference in Almaty.  Abdurahim Ashurov, head of the newly 
combined Ministry and former Minister of Transportation, leaves 
telecommunications issues to his deputy, Beg Zuhurov.  Post 
actively sought Zuhurov's participation in the conference, but 
presidential administration reticence to allow travel by any 
high-level ministerial personnel halted this opportunity.  In 
his stead, Nurinisso Boboeva, the Soviet-thinking head of the 
Ministry's International Department, will attend, along with 
Rahmonali Hasanov, General Director of Tajik Telecom, and Anora 
Zakirova, Director of the Agency of Communication Regulations. 
No private Tajik telecom operators plan on attending, due to a 
lack of understanding of how the conference might help them. 
 
¶3.  (U)  Major improvements in the country's telecommunications 
infrastructure continue, however.  According to recent news 
reports, Kazakh Telecom is opening a representative office in 
Dushanbe for the purpose of installing a fiber-optic network 
connecting Kazakhstan and Tajikistan through Kyrgyzstan, 
potentially extending to Afghanistan and Pakistan.  (Comment: 
Ironically, this occurred on the same day that Kazakh Air 
indefinitely cancelled its Almaty-Dushanbe flight.  One step 
forward, two steps back.  End Comment.)  Under an agreement 
signed in December 2006, China Development Bank will provide a 
$73 million long-term loan to improve telecommunications 
services in Tajikistan.  The loan will be used to purchase 
modern equipment for TK-Mobile and Tajik Telecom.  The European 
Bank for Reconstruction and Development is supporting 
modernization of the country's telecommunications network 
through investment in new digital switching and transmission 
equipment in Dushanbe and regional centers. 
 
¶4.  (U)  Foreign direct investment drives the development of 
telecommunications services in Tajikistan through joint 
ventures.  The leading companies include: Indigo Somoncom, 
Indigo Tajikistan, and Skytel - U.S.-Tajik joint ventures; 
TK-Mobile and M-Teko with China; and Beeline and MegaFon with 
Russia.  The sprawling Tajik system functions on several 
standards, including GSM, AMPS, CDMA450, CDMA20001X, 3G-UMTS and 
3G.  A liberal mobile licensing policy and comparatively low 
market entrance cost have driven the rapid growth of cellular 
operators and related competition between wireless standards. 
Other contributing factors include the low penetration rates in 
both fixed-line and mobile communications, and the rapid growth 
in disposable income. 
 
¶5.   (U)  An active telecom association regularly brings 
together the heads of the Tajik cellular operators to discuss 
pricing plans, government interference, and interoperability. 
Operating within a culturally suitable brand of communal 
capitalism, cellular companies set standard prices for 
 
DUSHANBE 00000430  002.2 OF 002 
 
 
connecting with each other.  At an Embassy-hosted telecom lunch 
February 21, EconOffs listened as all the major operators 
discussed moving away from the "Receiving Party Pays" and 
"Mobile Party Pays" models to the "Calling Party Pays" model, 
which would make landline phone users pay for connecting with 
cellular customers. 
 
¶6.  (U)  As revenues in the telecom sector in 2006 approached 
$70 million, the Tajik government moved to clamp down on the 
industry by creating a Unified Communication Center.  The center 
would make all calls flow through a centralized system, allowing 
the Ministry of Interior or other secuirty services to monitor 
telephone calls, and supposedly increasing tax revenues. 
Starting in early 2006, the cellular operators have vehemently 
opposed reducing the efficiency of the network while removing 
their customers' protections.  The government backed off, but 
has not entirely abandoned its goals to control more tightly the 
flow of information -- and revenue. 
 
¶7.  (SBU) Comment:  Despite the absence of top telecom-policy 
makers, post believes the Almaty conference will provide the 
Tajik officials a more Western-oriented viewpoint on regulating 
the telecommunications industry, something sorely needed in a 
Soviet-minded bureaucracy that is not yet part of the 
information age.  Meanwhile, the enormous potential for 
expansion makes telecom one of Tajikistan's few appealing 
investment sectors. End Comment. 
JACOBSON