OREANDA-NEWS. September 15, 2008. A USD105 million loan to JSC Transtelecom is expected to significantly improve the telecommunications infrastructure of Kazakhstan, reported the press-centre of EBRD.

The loan will finance the construction of a 4,664-km fibre cable along the railway tracks of the national railway company Kazakhstan Temir Zholi (KTZ), one of the ten largest railway companies in the world. JSC Transtelecom operates the telecommunications infrastructure of KTZ and also offers spare capacity to other clients.

The new network will enable the railways company to modernise its signalling and control facilities along the track. Kazakhstan, with large volumes of predominantly bulk commodities to be moved over long distances and no significant water transport alternative, is critically dependent on railways. The telecommunications upgrade will allow for the installation of an automated management system which will leader to the better and more efficient utilisation of the railway network.

In addition, the creation of fibre optic cable transmission capacity will allow JSC Transtelecom to expand its provision of commercial long distance telecommunication services. This includes lease of lines, lease of digital channels, intercity and international transit traffic, and the provision of telephony and Internet services to the general public in the towns served by the company?s network.

The rapidly growing telecommunications sector in Kazakhstan is still dominated by the state-owned operator Kazakhtelecom with a market share of over 40 per cent. The number of competitors, however, has increased significantly thanks to a liberalisation of the market and strongly rising demand.

SC Transtelecom, wholly-owned by KTZ, is a comparably small operator with 3.4 per cent market share in terms of revenues in 2007, but with a stable and increasing customer base and an excellent reputation for the quality and reliability of its services.

Thomas Maier, EBRD Business Group Director Infrastructure, said the investment programme will lead to increased competition in Kazakhstan?s telecommunications market. “Consumers will ultimately benefit from this through better quality at affordable prices”, he said. At the same time improvements in the telecommunications infrastructure is key for Kazakhstan to remain attractive as an investment destination, he added.

With a project value of more than USD 5 billion, the EBRD is the largest single investor in Kazakhstan outside the oil and gas sector. The Bank is investing across all sectors of the economy and particularly focusing its efforts on infrastructure investments where the country still has enormous needs.