Strategic review
Telecommunications market analysis
4.2% increase in IT costs up to $ 4 trillion - IDC
According to preliminary estimates by IDC , the volume of the global IT market in 2018 reached $ 4 trillion, an increase is 4.2% compared to 2017. At the end of 2019, a 3 percent decline is forecasted due to problems in the economy associated with increased import duties, increased interest rates of the Federal Reserve System USA, damped growth of the Chinese market and the completion of the capital spending cycle in companies
By 2022, global IT costs will exceed $ 4.5 trillion, with a highest growth demonstrated by services and software related to the so-called third platform ( cloud computing, mobile technology, big data, analytics and social services) and digital transformation projects. Cloud providers and their investments in data-centers infrastructure will become the main driver of the IT equipment segment.
According to Gartner, the IT Market Growth Accelerates through the Enterprise Software
October 17, 2018 Gartner analytic company presented an updated forecast for the global IT market. Experts predict the cost of information technology on a global scale by the end of 2018 to reach $ 3.7 trillion, an increase is by 4.5% compared to 2017. In January, researchers predicted costs of $3.68 trillion and the same increase of 4.5%.In 2017, the market grew by 3.9%
According to analysts, the main driver of the global IT market growth in 2018 was corporate software, the sales of which will grow by about 10%. SaaS Model (provision of software as a service) stimulates growth in almost all software segments, especially in CRM, since it pays attention to customer service improvement. The experts predict that costs of cloud services will grow by 22% in 2018, while sales of traditional software installed on client computers will increase by only 6%.
Global IT Spending Growth Forecast, by Segment
Overall IT
(2018: $3,683 B)
Communications Services
(2018: $1,427 B)
IT Services
(2018: $985 B)
Devices
(2018: $704 B)
Enterprise Software
(2018: $389 B)
Data Center Systems
(2018: $179 B)
ICT Market Review 2018
For 12 months of 2018, the entire communications market in Kazakhstan amounted to 728.7 billion tenge ($ 2.1 billion with an average weighted rate of tenge against the US dollar at 344.71) as compared to 711.7 billion tenge for the same period of 2017 - operators earned 17 billion tenge more. The growth to the previous year amounted to 2.4%.It is worth noting that the growth rate has been steadily declining in recent years.
Revenues from long-distance and international telephone services in Kazakhstan in 2018 amounted to 28.8 billion tenge, which is 4.1% less than in 2017; from local telephone services - 39.5 billion tenge (4.4% less); from services of data transmission over telecommunication networks, wire and wireless - 37.15 billion tenge (25.7% more); from the Internet - 244.6 billion tenge (10% more); from distribution services - 33.5 billion tenge (10% more); from mobile services - 214.8 billion tenge (3.4% less); from other telecommunication services - 128.3 billion tenge (neutral).
The graph below shows that the the market capacity, expressed in national currency, is growing mostly. Until 2013, the growth rate is very high - at least 7.5%.But since 2014, the growth has been falling sharply with a degradation demonstrated in 2016. In general, recent years indicate that the market has reached a plateau - since 2015 it has grown by only 6.5%.If we compare the revenues that the market generated in 2018 to what it was in 2017, the growth was only 2.4%. This is almost twice less than the growth of the economy of Kazakhstan (in 2018, it grew by 4.1%). Moreover, until the middle of 2018, the industry revenue growth indicator looked very promising - about 6%.But finally it decreased to the above mentioned 2.4%.
The telecommunications market share and its structure, 2019-2018, billion tenge
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2018
According to the results of 2018, the market structure is as follows, the three largest segments (mobile communications, Internet services and other telecommunication services) make up near 80.65% (587.7 billion tenge of 728.7 billion tenge) of the communications market revenue as a whole. See details in the diagram below.
The structure of income from communication services in Kazakhstan for 2018
Service Penetration Levels
In this part, we will consider how the subscriber base of communication service users has changed. In January 2018, the number of fixed telephone lines amounted to 3.638 million units, mobile subscribers - 26.67 million, and mobile subscribers with Internet access - 14.07 million. Finally, fixed Internet subscribers - 2.63 million units. In December 2018, the number of fixed telephone lines decreased to 3.35 million (-8%), mobile subscribers - to 26 million (subscriber base decrease by 2.5%), mobile subscribers with Internet access increased to 14.43 million (+ 2.6%). The number of fixed Internet subscribers decreased by 6% to 2.47 million. According to the results of December, the penetration rate of SIM cards in Kazakhstan amounted to 141% (the indicator is decreasing), while the proportion of subscribers who use mobile Internet reached 55% (here we can see the growth).
Summary
Based on the analytical data, the telecommunications market in 2019 will not have significant growth, since the market is more in the stage of stagnation than growth, there are also no visible powerful drivers that can give a powerful impetus to the market. It is worth noting that potential drivers enter the market, for example, such as 5G, financial technology products, the development of marketplaces and media, but the main income in the telecommunications market of Kazakhstan is generated mainly by the Internet and voice traffic, and no changes are expected in this segment.
Source: https://profit.kz