In October 2005, Vassily Sidorov, President of MTS, Russia’s largest cellular phone operator, spoke about his confidence that the Turkmen mobile phone market would grow to one million users in the forthcoming two to three years. President Saparmurat Niyazov boosted the likelihood of this eventuality on Monday by calling for the introduction of a flat, low-cost mobile phone tariff.
Turkmenistan.ru reports that Niyazov urged his Minister of Communications, Resulberdy Khojakuliyev, not to allow tariffs to exceed the sum of $10 per year, while also suggesting that Turkmenistan should avoid pursuing pricing strategies in line with those of other countries.
Currently, state-run Altyn Asyr has only 20,000 subscribers, while Barash Communications Technologies Inc., which is wholly owned by MTS, has 90,000 subscribers. While the move may possibly result in a increase in the uptake of cellular technology among the population at large, it is not yet clear how the imposition of a cap on mobile phone tariffs will affect the competitiveness of the Turkmen state company’s Russian rival. As it is, 20 percent of Barash’s profits are devolved to the Ministry of Communications, under the terms of a five-year concession agreed upon in November 2005, so it seems likely that the Turkmen government will be keen to see this company continue its current growth rate.
Barash, which was bought from its U.S.-born Georgian founder in November 2005, has not been immune to some of the regulatory problems that can assail foreign investors in Turkmenistan. In early July 2005, the Ministry of Communications revoked Barash’s operating license for motives that are most likely connected to the MTS takeover the previous month, though the license was reinstated a week later after intense negotiations.