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Kyrgyz Consumers Switched Off by Phone Charges

Anti-monopoly agency to investigate new fee charged by phone companies.
By IWPR Central Asia
The introduction of connection charges by leading mobile phone companies in Kyrgyzstan has prompted an investigation by the country’s anti-monopoly agency.

The new fees sparked anger among consumers, who held a one-day boycott of their phones on February 5. Organisers claimed that 100,000 people switched off their phones between eight in the morning and six in the evening.

Four companies – SkyMobile, AlfaTelecom, NurTelecom and AkTel – which together account for 80 per cent of the mobile phone market in Kyrgyzstan, simultaneously announced they were bringing in connection charges from February 1.

The country has eight mobile phone operators with a total of 3.8 million users – nearly 70 per cent of the population, despite the low incomes earned by most people. The proliferation of providers in recent years has made mobiles relatively cheap to own and run, even compared with landlines.

The introduction of a new charge of 60 tiyin, or just over one US cent for every call put through has come as a shock to many.

An office worker from Bishkek who gave his name as Kylych told IWPR why he joined in the “Silent Action” protest.

“It was matter of principle for me not to use my mobile on the day of the day,” he said. “I’m definitely going to restrict my use of it on other days, too. I don’t want to pay more. I will either use the landline or SMS, or else I might go over to another phone operator.”

Aybek Baratov, one of the organisers of the protest, said an estimated 100,000 people took part in the boycott, most of them young people who make frequent calls. This number could not be confirmed, he added, because the phone companies were reluctant to divulge such information.

Baratov said he doubted the protest would have much effect, but warned that it might be repeated.

Kyrgyzstan’s State Agency for Anti-Monopoly Regulation is currently looking into the fees to see whether they were coordinated by the companies concerned, and whether these firms control enough of the market to breach monopoly rules and could therefore be deemed to have acted as a cartel.

Talantbek Sakishev, head of the pricing policy department at the Ministry for Economic Development and Trade, believes there may have been some collusion.

“The fact that these companies introduced a common connection charge all at the same time is grounds for suspecting there was an agreement among them, although of course this will have to be proved,” he said.

The head of monopoly regulation at the agency, Larisa Shutnikova, told IWPR that it had only just acquired powers to regulate the sector, which previously rested with the state telecommunications agency.

The head of the telecoms agency, Kubat Kydyraliev, defended the four companies in a speech to parliament on February 3, arguing that they had acted individually and that they had been forced to introduce fees because the cost of importing technology was rising due to the exchange rate, and also because consumers used their phones so sparingly.

“More than 50 per cent of all traffic consists of short calls lasting under 30 seconds, and these don’t cover the technical cost of processing them,” he said.

When IWPR contacted the phone operators, spokespersons for Beeline (SkyMobile) and AkTel, which operates under the name Fonex, gave explanations similar to those offered by Kydyraliev. They cited high taxes and overheads, rising electricity bills, and the need to pay US dollars for equipment imports out of income earned in rapidly-depreciating Kyrgyz soms.

The head of public relations at SkyMobile, Tatiana Baylo, said the company’s actions were lawful, and she pointed out that its call charges per minute were less than a fifth of what they were in 2007.

Another allegation levelled against the phone companies is that they did not inform the government of their new fees in advance. Baylo responded, “Since none of the mobile operators dominates the market, there is no mandatory requirement to agree price changes with the anti-monopoly agency.”

Oxana Bedash of MegaCom made similar points, noting that call costs in Kyrgyzstan were among the lowest in the former Soviet Union.

Asilbek Jeenbekov, a member of parliament from the opposition Social Democratic Party, has taken up the issue, voicing objections to what he described as a “unilateral” price increase and calling for greater competition, for example by allowing South Korean and Chinese firms to enter the Kyrgyz market.

“Only then can we hope for charges to go down,” he said.

Asyl Osmonalieva is an IWPR-trained contributor in Kyrgyzstan.