ALMATY -- Kazakh telecoms are cutting their rates for subscribers by up to 50% next year, according to the Ministry of Information and Communications.
Kazakhtelecom, a national provider, will be giving subscribers a 5% discount starting January 1, 2019, Vice Minister for Information and Communications Daryn Tuyakov announced December 10.
"Transtelecom is offering a reduction of about 5% for World War II veterans, and the company points out that its current costs are low overall," he said, according to Zakon.kz. "Rural customers pay 529 KZT ($1.40) per month while city dwellers pay 797 KZT ($2.10) per month."
Meanwhile, "KazTransCom is reducing its activation fee by up to 50%, as well as a 10% discount on the monthly fee and a roughly 15% discount on the monthly internet fee," he said.
KaR-TeL is rolling out a new line of pricing plans, according to Tuyakov. Prices are expected to fall by about 50% -- monthly fees will drop from 1,300 KZT ($3.50) to 590 KZT ($1.60).
"Kcell has launched the new Comfort XS+ plan," he said. "The company is lowering rates by 50% ... the monthly subscription fee will amount to 1,390 KZT ($3.70), down from 2,590 KZT ($7)."
A presidential initiative
In opting to cut their rates, telecoms are taking guidance from President Nursultan Nazarbayev's goal of reducing prices for public utilities, Murat Kastayev of Almaty, CEO of DAMU Capital Management, told Caravanserai.
On average, customer rates for electricity and heat in Kazakhstan are 40% higher than production costs, Nazarbayev said at the November 7 session of the Security Council.
"This allowed 15 power stations to generate 38 billion KZT ($102.4 million) in excess profits in 2016–2017. The Prosecutor General's Office therefore stopped this," Nazarbayev said, addressing Energy Minister Kanat Bozumbayev.
The Prosecutor General's Office will thoroughly investigate the matter and that monopolists guilty of setting prices too high will be punished, he said.
"In other words, the president didn't give a direct order to cellular companies to lower their prices, but the political determination to reduce what the public pays for important services -- including communication -- was made clear," Kastayev said.
A New Year's present for residents
Mobile phone users are welcoming the drop in prices.
Shymkent resident Zaure Baltayeva said it will be a relief for her family.
"My husband and I and our three kids all use mobile phones, and we pay about 8,000-9,000 KZT ($22-24) every month for this service," she told Caravanserai.
"Of course we'd like to pay half as much," she said.
In modern life, it is impossible to imagine living without cell phone service, she said.
Yekaterina Voronova, an Almaty resident, shares Baltayeva's relief but expressed hope that reduced prices would not mean inferior service.
She did not want to see a degradation of audio quality or of internet speed, she told Caravanserai.
Although any rate cut boosts the image of a government that helped make it happen, it also is an opportunity for cellular operators to attract subscribers, said Yevgeny Malishevskii of Almaty, director of the Scientific and Consultancy Centre at the National Telecommunication Association of Kazakhstan.
"These days there are so many alternative ways to save money on calls -- such as video and audio calls through WhatsApp, Facebook Messenger, and Skype -- that mobile operators' revenue has fallen," he told Caravanserai.
Although the volume of internet traffic jumped by 100% between 2017 and 2018, companies' revenue rose only by 8%–10%, he said.
Therefore, companies need to make voice calls an attractive service again, he said, adding that reducing prices is one way to expand the customer base.