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
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
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.
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.
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);
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.
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.
are a process of establishment of a technique and technological innovations
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
Table 1. Reasons of company innovative strategy development
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.
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.
(introducing) activity is aimed at establishment and usage of intellectual
product, making new unique ideas implemented into finished commodities for the
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
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
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
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
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.
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.
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
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.
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.
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.
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
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.
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
– 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
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.
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
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
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.
Prezidenta Respubliki Kazahstan ot 17 maja 2009 goda №1096 «O Strategii
industrial'no - innovacionnogo razvitija Respubliki Kazahstan na 2010-2015 gody»
Respubliki Kazahstan o nauke ot 18.02.2011 g.
Respubliki Kazahstan ob akcionernyh obshhestvah (s izmenenijami i dopolnenijami po
sostojaniju na 29.12.2009 g.)
4 Zakon RK
"Ob innovacionnoj dejatel'nosti" Astana, 3 ijulja 2009 goda N 333-II
Gosudarstvennaja programma po forsirovannomu industrial'no innovacionnomu
razvitiju Respubliki Kazahstan na 2010 – 2014 gody, ot 19 marta 2010 goda № 958
programma industrial'no-innovacionnogo razvitija Vostochno-Kazahstanskoj oblasti
na 2004-2015 gody // Utverzhdena resheniem IV sessii Vostochno - Kazahstanskogo
oblastnogo maslihata III sozyva 30 marta 2004 g. №4/45-III
upravlenija innovacii na predprijatii. // Pod. red. Vodachek L.I., Vodachkova Ju.O.
- M.: «Jekonomika», 2001.
Table of contents: The Kazakh-American Free University Academic Journal №6 - 2014