Innovations in KazakhTelecom JSC

Table of contents: The Kazakh-American Free University Academic Journal №6 - 2014

Balykova Marzhan, Kazakh-American Free University, Kazakhstan
Kaygorodtsev Alexander, Kazakh-American Free University, Kazakhstan

Production expenses reduction, material resources sustainable use, higher economical performance, and first and utmost labor and production efficiency increase causing cost decrease are of the high importance and current concern issues of production management. It is quite necessary to improve management to solve these issues and therefore increase the efficiency, and master methods of effective production management.

The required condition of company efficiency increase is a scientific research, analysis, experience summary and justification of company management system that assures new services supply to the market providing competitive strengths.

Innovations in modern economical world are one of the key factors affecting company activity efficiency. Nowadays competitive ability at the markets mostly depends on products as based on new know-how. In the past success and development depended on access to natural resources. These days it is impossible to succeed and be developed without innovations.

Currently the whole responsibility for innovations implementation is for management of separate businesses. However right assessment and selection as well as innovative projects implementation allow companies to achieve leading positions in a particular industry sector and assure a strong base for continuous growth.

Scientific and technological advance achievements are spread within production in a form of innovations. Innovation can be a new order, a new method, new products or a new feature. Innovation is used by means of production, reproduction and sale for the society within innovative process. Innovative processes are created in different scientific spheres and finished in different industrial spheres causing effective and qualitative changes. Innovations may cover technique and technology as well as production organization and management forms. All of them are closely interconnected and represent qualitative steps for production forces development and production efficiency increase.

The following types of innovations can be revealed:

- technique and technology innovations are new products, technologies and production means. They are the base for technological advance and production re-equipment.

- organizational innovations are processes for implementation of new forms of production and labor organization and management as well as innovations to be used for change of correlation between spheres of structural departments, social groups and individuals influence (vertically and horizontally);

- management innovations are purpose-oriented change of functions, organizational structures, technologies and management process organization, management apparatus methods of work as intended to change management system elements (or the system as a whole) in order to speed up, simplify and implement tasks as established for the company;

- company economical innovations are positive changes in financial, payment, accounting activity spheres as well as in planning, price formation, labor motivation and payment areas and activity results assessment;

- social innovations are revealed in a form of human factor activation via development and implementation of personnel policy improvement system; system of professional training and skills improvement; system of social and vocational adaptation of newly employed personnel; system of reward and assessment of job deliverables. This is also an improvement of social and living conditions of workers, safety and health conditions, cultural activity, spare time management.

Modern state development is based on three models: innovative model, technological model and raw material model.

The main task of innovative model of state development is production of knowledge, know-how to be based on fundamental scientific research results. Products as manufactured on a base of such model are unique and highly valued on the worldwide market. In the meantime innovative model of development requires high expenses to be invested to fundamental science and a lot of time for scientific personnel training.

Innovation investments are a process of establishment of a technique and technological innovations commercial research.

In general innovations are renovation of main capital (production assets) or products as manufactured by means of introduction of scientific, technique and technological research deliverables within regular fair process of public production improvement (Table 1).

Table 1. Reasons of company innovative strategy development

Motivation for innovation development is market competition at first. Producers and consumers when using old technique and technology get differential losses causing necessity to reduce operating costs based on innovations. Business companies that have mastered effective innovations first are in a position to reduce operating costs and commodities (products, services) price resulting in enforcement of such companies position in competition with other companies suggesting similar commodities (products, services) to the market. Therefore innovative activity contributes to company survivability in competition.

Perspective of innovation development and sales significantly depends on a life cycle stage (origin, growth or completeness) it is going through at the required moment. Significant attention shall also be paid to accelerating of innovative product establishment. Sometimes this process takes several years causing ageing of innovation and decreasing its value with new innovations appearance. The newer the innovation stage is, the higher its perspectives are.

Innovations that are at a completeness stage may be used only for internal market satisfaction with commodities in short supply. Home appliances innovations may be a good example of such a stage. These home appliances are usually produced at defense enterprises within conversion. Should innovations be on a growth stage, internal demand and worldwide market access shall be guaranteed. Should the innovations be on origin stage or in some cases on completeness stage, advance to scientific and technical sphere shall be possible. Air space industry shall be a good example.

Innovative (introducing) activity is aimed at establishment and usage of intellectual product, making new unique ideas implemented into finished commodities for the market.

Innovation definition is applied to all novelty in operation, organizational, financial, scientific and research spheres, any improvements causing costs saving or conditions for such saving. Innovation cycle covers the process from idea generation to its practical implementation.

Innovation activity is a complicated dynamic system when different methods, factors and management tool interact to make scientific research, new types of products development, equipment and instruments improvement, modification of technological processes and forms of operation based on newest scientific and technological achievements; planning, financing and coordination of scientific and technological advance; economic instrument and incentive improvement; establishment of measures to control interdependent activities to accelerate intensive development of scientific and technological advance and increase of its social and economic efficiency. General scheme of key issues of company innovative activity establishment summarizes information above (Picture 1).

Picture 1. Scheme of key issues of company innovative activity establishment

Kazakhtelecom JSC is a national operator of connection nets in Kazakhstan and one of the most dynamically developing telecommunication companies within post-soviet area. Kazakhtelecom JSC proposes a wide range of information and communication services.

51% of Kazakhtelecom JSC shares are owned by the State represented by Samruk State Assets Management Holding of Kazakhstan JSC. The structure of Kazakhtelecom JSC includes Altel JSC (100%), Mobile Telecom Service Ltd. (51%), GSM Kazakhstan Ltd. (49%), Nursat JSC (95.68%), Signum JSC (100%), Vostok Telecom Ltd. (100%), Kepter Telecom JSC (100%), Radio Tell Ltd. (100%). Today Kazakhtelecom JSC Group of Companies covers all the main target markets of information and communication services consumers.

Central office of the company is situated in Astana, the capital of Kazakhstan. More than 30 thousand people work for the company. Kazakhtelecom JSC have regional branches in each region of the country to assure service rendering within the whole territory of the country. The company services almost 3.2 mln. consumers of fixed connection as of July 1st, 2008. Telephone density in the Republic of Kazakhstan in average is 20.36 telephones per 100 people. Kazakhtelecom JSC is in close connection and interaction with more than 40 operators of neighboring and far-abroad countries.

Kazakhtelecom JSC deals with a number of big infrastructural projects implementation, telecommunication nets modernization and digitalization, new technology introduction and telephone systems installation in villages and broadband internet access development as well.

East-Kazakhstan regional operational and technical communications department was established in December 27th, 1939 in Ust-Kamenogorsk.

During World War II telephone connection development rates decreased. City telephone connection was significantly developed within 50s and 60s. Automatic telephone stations were introduced those times. 24 automatic and 1 manual telephone stations of 48.2 thousand numbers (to be connected to 46790 telephones) capacity had been established within telephone net up to 1970. 546 telephone booths were installed in cities and regional centers.

Intercity connection was developed along with city telephone connection net growth. Number of intercity calls increased with an increase of subscribers number. In 1978-1979 automatic international unit called as АТУ-ДШС was installed and connected to introduce semiautomatic data messaging system in the region. The first automated call office АПП-80 was established in 1988.

90s are the yeas when East-Kazakhstan Telecommunication Department started its new development stage.

There were 92 thousand of subscribers as serviced by 203 stations in Ust-Kamenogorsk in 1991 when number of automated call offices significantly increased. The demand could not be satisfied with the use of old equipment. In this regard the issue of public telephone network modernization got a high importance those days.

Starting with 1995 regional telecommunication center started replacement of the automated call office equipment with modern digital one as produced by German Alkatel company. The capacity of new equipment was 30976 numbers for five automated call offices as located in different regions. Digital automated call office subscribers got the opportunity to use a lot of additional kinds of services making telephone functional capabilities wider.

Kazakhtelecom JSC as a national communication operator started a new project aimed at FTTH (Fiber to the Home) networks establishment according to G-PON (Gigabit Passive Optical Network) method up to 2015. This project implementation will allow subscribers to have high-speed Internet connection as world information leaders have. Meanwhile a lot of subscribers have already assessed advantages of this kind of innovative service: iD Net innovation became available in big cities year and a half ago; now it is spreading intensively all over the country. It shall be emphasized that the project was noticed at the state level and became a part of a governmental development program.

Kazakhtelecom JSC takes a significant part of a market and defines the country development with regard to information and communication. Nowadays key priorities of the operator activity have been development of broadband Internet connection.

Last years high-speed broadband Internet demand shows dynamic and steady increase among corporate clients as well as private persons.

According to ICT-Marketing number of Internet users was 4.3 mln. people as of the end of the last year, other words 26.5% the country population where 41% are urban citizen of 16 and more years old, and 19% are villagers. Regulars (people who access the Internet at least once a month) are 94% of urban citizens as of 2010.

Please, note despite mobile internet spreading the main point of connection to the network is stationary home computer which constitutes 63% of all the statistics.

According to questionnaire results only 12% of urban citizens whi are older than 16 use the network with mobile (GPRS / WAP). Seven of ten mobile Internet users have Megaline installed at home or at a working place.

In November 2010 90% of families preferred broadband Internet access. In general 89.5% subscribers use Kazakhtelecom JSC services. This time a new service iD Net was introduced: G-PON equipment was brought to Astana, Almaty, Karaganda and Atyrau in 2010. Fiber optic cable is supposed to be laid to a building to be further distribution to blocks switch-boards and subscribers.

Company has been using fiber optic for provision of broadband Internet access starting with 2000. All the regional centers and a number of other cities have been using FTTC. Therefore there is a number of subscribers who wish to use interactive television (iD TV), iD Phone telephony and iD Net with one instrument. Furthermore Kazakhtelecom JSC provides its customers with special optical modem. Comparing to Megaline iD Net assures high-speed video, data and voice broadcast.

Kazakhtelecom JSC clients get access to internal resources (IP-addresses are registered in RIPE in favor of Kazakhtelecom JSC) through incoming and outcoming channel with a speed of 100 megabit per second, to external resources – up to 2 megabit. External traffic limit is 40 gigabyte, upon limit expiry the speed decreases down to 128 kilobyte per second through incoming and out coming channels. Monthly payment is not much higher than one of Megaline. It is 4,600.00 tenge (VAT included).

Customers demand to Internet channels bandwidth is growing. In this regard Kazakhtelecom JSC highly evaluates potential of technology to use fiber optic cable. Internet access network based on FTTH (G-PON) is a part of broadband networks development program for 2011–2014 aimed at wide scale forced introduction of this kind of innovations in Kazakhstan. The Head of the State has mentioned the necessity to spread and popularize broadband Internet. This idea has been being implemented by the Ministry of Connection and Information.

The Ministry of Connection and Information has started a program called Broadband Internet Access Development Road-map. Implementation of this program shall cover 100% household of the country with qualitative Internet to 2015. Number of subscribers shall be increased up to 45 among 100 citizens (34.1 in 2011), rates shall be reduced for 30% min. up to specified date.

It is expected that wireless Internet access networks will be developed according to 3G, CDMA-450/800, 4G technology within the road-map program. Fixed access to the Internet using FTTH and FTTB technology shall also be provided.

The program identifies that 3G networks shall be established in all the inhabited areas with population of 10 thousand people and more up to the end of 2014. All the regions shall be provided with broadband access as established according to CDMA technology up to the specified time.

Currently Kazakhtelecom JSC is introducing a new service within a general strategy of gradual transferring to more advanced access technology. Today FTTH is the newest and the most progressive technology. It helps to achieve a full range of telephony, Internet and interactive TV services.

– i.e. ADSL technology which is a base for Megaline has significantly depreciated and is going to be gradually depressed;

– ADSL technology has advantages such as rapid arrangement of broadband access services in all the cities and region centers, provision of Triple Play basic set of services – Internet, voice and video, furthermore subscribers access arrangement is dine quite cheaply;

Everyone is used to work with standard applications such as Skype, Facebook that do not require high speed of Internet connection however there are other services not available now. For instance, several SD and HD-video channels cannot be provided. Broadband access development based on copper network does not allow to expand a range of services.

In a long-term perspective copper networks cannot be considered for supply of the high speed Internet due to physical limits of a cable. Main investigations to achieve 100 megabit and more in fixed networks are performed for optical technologies.

With regard to the information mentioned above Kazakhtelecom JSC is going to replace copper cable networks as established according to ADSL technology which is unable to provide higher connection speed (connection is done within 1 and 24 megabit, 12 megabit in average) with fiber optic networks.

However ADSL will not disappear (for instance, 87501010 dialup access still available). Kazakhtelecom JSC experts are completely sure people will continue using Megaline allowing fiber optic and copper networks coexist for a long time.

Nowadays Kazakhstan owns independent and competitive telecommunication network due to several reasons. One of such reasons is development of a big project of state importance. This is construction of a collar bush of the National Information Superhighway. This project implementation afforded the country to make a very important step towards establishment of so called “digital state”, formation of “electronic” government structure as well as “information” society. Furthermore the National Information Superhighway will allow to integrate Kazakhstan to global information space.

Innovation management get higher importance present days as it significantly affects strategy, goals and methods of company management. Innovations create a future image of a company by defining its technologies, services as proposed and potential clients.

Connection networks are a part of information base providing information transfer and distribution as necessary for all the chain elements functioning in good order. Modern society cannot exist without information receipt and distribution because it reflects all the processes of public work and cooperation between people. Therefore there is a high necessity in communication means as united within different communication networks.

Currently the network as mostly occupied with information flows is telephone network. Subscribers of this kind of connection network are spread all over the country. A significant part of this network is referred to mass information transfer such as television and radio programs transfer from studio to distributors or to units of wire broadcasting network.

Due to introduction of new services Kazakhtelecom JSC will be able to increase and get an additional profit that is one of the most important factors for each company.


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Table of contents: The Kazakh-American Free University Academic Journal №6 - 2014

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