Discussing Kazakhstan’s telecom sector at Davis Center

At a recent event hosted by the Davis Center for Russian and Eurasian Studies at Harvard University, Elisa Oreglia and Oyuna Baldakova presented their findings from the DIGISILK project on Kazakhstan’s telecommunications sector and its place within the evolving “Digital Silk Road.” Their talk, “Fragmenting the Digital Silk Road: History, Modularity and Agency in Kazakhstan’s Telecom Sector,” explored how infrastructure decisions in Kazakhstan are shaped not only by geopolitics, but also by long-term orientation and modularity of digital infrastructure, and telecom firms’ ownership.

The talk drew on the article “Beyond geopolitics: Agency and modularity in mobile telecommunications in Kazakhstan,” published in Telecommunications Policy. Readers can also read more about the research in the blog post, “How do telecom companies choose their suppliers?”.

The presentation was followed by a discussion with the moderator Nargis Kassenova, senior fellow and director for the program on Central Asia at the Davis Center, and questions from online participants which expanded on several themes, including infrastructure sovereignty, vendor choices, and the realities of telecom decision-making in Kazakhstan. Below are selected highlights from the Q&A session:

Is there freedom in the digital world now in Kazakhstan?

Elisa: What we've tried to do with this project, which has a team of researchers looking at digital ecosystems in different countries, is to show how a question like this is impossible to answer. It's not very useful as an analytical lens to understand what is going on in terms of Chinese and other tech companies in the country. It's just too broad and not clearly defined. If we narrow it down to the topic of our paper, the telecom industry in Kazakhstan, and if for freedom we say competition, and if for the digital world we say communication industry, we can ask: Is there competition in the telecommunication industry in Kazakhstan now? I would say there is. Could be more, but it's definitely been a long way.

Can I modify it a little bit? From the presentation, we know that the core of the telecom sector is still American, and it seems very difficult to change. While the rest of the region has a strong Chinese presence. How sustainable is that? Are we locked in or down the road might things change?

Elisa: Lock-in effects are real and they are indeed the reason why there is still so much technology that comes from decisions taken 20 years ago. Now that there is Huawei in parts of the infrastructure, it will be there for years to come. But also Huawei is not the only player. There are always these different assemblages of vendors, technologies etc. If we leave aside for a moment the Chineseness of Huawei, I think it is a good rule for network operators to have multiple vendors. You just don't want to rely too much on a company in case it goes bust. It's a purely business decision. We keep on seeing these different layers.

Oyuna: When it comes to history, depending on the period, basic networks were built on the basis of the available solution on the market at the time. Firms that were established in the early 2000s, before 2008, were built using Nokia and Ericsson equipment, and Cisco and Juniper for the network systems. And these parts are possible to replace, but depending on the complexity of the company, it's much harder. There are lock-ins, different standards, and little interoperability between different firms. This is a phenomenon that is still a problem for developing countries. They want to cut costs, use cheaper versions but once they start building on one equipment it is much more difficult to switch. Firms that were built later from 2008, you see an influx of Chinese capital, and they are using much more Huawei equipment. Another thing about technology is that you have changes, different generations like 4G, 5G, 6G now in China. Huawei has allegedly the best solution in the market at the moment for 5G in developing countries, so there is a higher probability that they will switch to Huawei when it comes to access networks. Perhaps there will be new Indian firms. Some of my interviewees were talking about 5g solutions and how they are open.

How about Gulf companies? Are they closer to western technologies or Chinese?

Oyuna: Not really. The Qatari capital came in at the end of 2024, when we published the paper. But a lot depends on the firm: Is there a state backing or not? Are there strategic priorities in terms of ties with other firms? It's a complex decision-making process that needs to happen.

Elisa: It's probably worth emphasising that Chinese companies like ZTE and Huawei are competitors. They have different strategies and often bid against each other in these telecom infrastructure tenders.

You mentioned that the war in Ukraine affected the competitiveness for western companies because supply chains were disrupted. Is it still the case?

Oyuna: It's hard to say because my fieldwork was there in 2022 and 2023, when the war just started, and there were the first effects in the supply chain and financing. A lot of companies were either forced to establish in Central Asia or Gulf areas. For example, Huawei's main office for Central Asia is in Dubai, and before it was in Moscow. They changed a lot of locations. I imagine now the market has adopted a faster way to ship goods.

You mentioned that Kazakhstani government agencies don't use Chinese technology, and prefer American tech. Is that the case in other countries you researched?

Elisa: I should add for the sake of going beyond this bipolar world that there is still a fair amount of European tech. But, yes, I have to say that this is something I have seen in Cambodia as well. There is leveraging of different companies for different sectors, even different types of technologies, for example at the level of internet providers. Often that becomes a way to differentiate and segment the market. An ISP might position itself as the one that doesn't use Chinese tech as a selling point, others will go for cheaper service and then go for Chinese tech. It depends on how much competition there is in individual markets but also what is the political situation. Myanmar, for example, was going down the road of liberalisation of the telecom market, especially in 2014-2015, and we saw new players coming in what was already a pretty diverse market, and then in 2021 there was a military coup and things really changed overnight. There are moments of more fluidity in telecom operators and moments of big changes. The war in Ukraine for example created a whole set of consequences in terms of sanctions, so European companies had to react to that. In Myanmar, the same thing with sanctions, and the whole economic and political climate made companies like Telenor leave the market and others stepped in.

What is the political climate in Kazakhstan formal or informal rules for the telecom sector?

Oyuna: There is nothing official. A few interviewees said that they tried not to include Huawei equipment when it comes to critical infrastructure and there is awareness and concern from local officials about the security of Huawei, plus there is a perception that Western equipment is more secure and well maintained.

Elisa: We can see a number of countries who were very explicit about not having Huawei in their 5G networks, or the United States having the entity list where a number of Chinese companies are listed. But a lot of the countries that we looked at and developing countries don't really have the luxury of being so clear about not doing business with this company, so there are a lot of informal rules. You're not going to find the white or black list, but more of these edging behaviours.