The Digital Age
The coronavirus pandemic has disrupted the global population’s ability to work and socialize in person since March of 2020. As a result, internet and mobile telephone services play an increasingly important role in supporting economic growth and social inclusion across the world. Additionally, mobile internet connects people to new opportunities and life-enhancing services online, driving growth for the digital economy and advancing progress towards the UN’s SDGs.
According to the World Bank[1], “Digital technologies are at the forefront of development and provide a unique opportunity for countries to accelerate economic growth and connect citizens to services and jobs. In times of crisis, from natural disasters to pandemics such as the one the world experienced with Covid-19, digital technologies are what’s keeping people, governments and businesses connected”.
While the reach of mobile networks across the globe has expanded significantly in recent years, with more than 3.7 billion people connected to mobile internet by the end of 2019, over half of the world’s population remains unconnected. There is a ‘coverage gap’ of approximately 750 million people residing in underdeveloped and remote areas who cannot access a mobile broadband network. There is also a ‘usage gap’ for 3.4 billion people who can access mobile broadband networks but are not subscribed to mobile internet services due to costs or other factors. Increased penetration for mobile networks, specifically for 3G and 4G, can enhance digital connectivity by expanding internet and broadband access, which facilitates the reduction of barriers to trade, commerce, communication, service delivery, and human development.
Telecommunications in CIS Countries
According to GSMA[2], the Covid-19 pandemic has profoundly impacted the digital landscape in the Commonwealth of Independent States (CIS) and around the world. Mobile operators in the region have engaged with both the public and private sectors on initiatives to alleviate the impact of the pandemic for vulnerable groups of the population and the most affected businesses. Measures include zero-rated use of educational services and government websites, discounted tariffs for healthcare workers, and free access to online conferencing solutions to enable business continuity and support economic recovery.
Though still behind most developed markets, the CIS region is witnessing an accelerated shift to mobile broadband. 4G became the leading mobile technology in the region during 2020 and remained a strategic priority for governments, with network availability and performance as the key competitive dimensions. Greater use of data-intensive services and demand for higher speeds will drive further adoption as the pandemic continues, with 4G accounting for nearly two-thirds of total connections by 2025. In certain countries, it is expected that this will also deliver some revenue uplift.
Further to this, in 2019, mobile technologies and services generated 6.1% of GDP in the CIS region – a contribution of USD 137 billion. The mobile ecosystem supported over 830,000 jobs, either through direct employment or indirectly through activity on the broader economy. Mobile technologies and services also contributed USD 14 billion to fund the public sector – mainly via general taxation. Over the coming years, advancing mobile technologies will drive further contributions to the CIS economy, impacting key sectors such as manufacturing, utilities, and professional and financial services.
Telecommunications in Uzbekistan
The Republic of Uzbekistan is a landlocked country rich in natural resources and located in the heart of Central Asia. Home to approximately 32 million people, the nation boasts the largest population in the CIS region[3] and has long been known as a leading influence for informational development within these countries. However, Uzbekistan’s telecommunications networks are still primarily based on modern additions to Soviet-built infrastructure. Challenges to developing Uzbekistan’s telecommunications have constrained the ability to unlock the full potential of the nation’s digital economy.
For many years Uzbekistan has been working to bring its telecommunications up to the standard in developed countries. There has been a positive trend in the country’s telecom market within the last decade due to increased investment in infrastructure, expanding subscriber bases, and rising revenues. Over the past five years, Uzbekistan has seen a rapid increase in mobile broadband penetration, with market penetration driven by a rising level of mobile subscribers and mobile data. However, the nation’s mobile broadband market is still at an early stage of development, and mobile network penetration remains low.
Since the beginning of 2018, the Government of Uzbekistan has announced ambitious development goals for the telecommunications sector, including plans to liberalize markets and actively seek private investment. The Government has set the challenging target of increasing broadband capacity and deploying 277,000 km of fibre optic infrastructure. The Government of Uzbekistan has also demonstrated a commitment to improving access to digital government services and adopting digital development approaches to economic growth.
Importing essential Telecommunications Equipment
ICIEC has provided a combined over USD 50 million cover through Specific Transaction Policy to two Chinese telecommunication giants to accelerate the development of Uzbekistan’s communication and information technologies. The project involved the USD 70 million modernization of the nation’s mobile broadband access network, data storage and processing centre expansion, and DWDM network in the Eastern Region of Uzbekistan, specifically in the capital city of Tashkent and the Western Region of the country.
ICIEC intervention enables the largest and the market leader of a telecommunications operator in Uzbekistan to expand its core services for public authorities at all levels, state institutions, organizations, and individual consumers. As of August 2020, the operator mobile subscriber base reached 6 million users. This number will continue to grow as the company expands its 4G networks in regions across the country through this project. The company’s mobile coverage is estimated to reach 90% of the population. The mobile telecom operator, which operates with 22 branches and 17,000 employees, supports most of the national territory with its network expansion.
The project is enabling Uzbekistan to facilitate growth in its mobile sector. The project aligns with Uzbekistan’s broader economic and social objectives as slated in their National Development Strategy 2017-2021. It includes the goal to increase 4G penetration and smartphone usage in the country. The project also contributes to foreign direct investment and improves access to telecommunications infrastructure for citizens of Uzbekistan who were previously out of reach.
ICIEC’s support for the project aligns with the Corporation’s development objectives. Uzbekistan is a newly added member country for ICIEC, and this project contributes to several of the United Nation’s Sustainable Development Goals (SDGs). Enhancing Uzbekistan’s telecommunications networks will exponentially promote developments in industry and infrastructure as defined by the SDGs. It will also contribute to decent work and economic growth with the potential of growing the nation’s digital economy. Finally, the project is helping Uzbekistan reduce inequalities concerning the percentage of the population that will access reliable internet services.
