UN ESCAP Conference Almaty, Kazakhstan. Joseph Mik (Investment Officer) IFC Transaction Advisory

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1 UN ESCAP Conference Almaty, Kazakhstan Joseph Mik (Investment Officer) IFC Transaction Advisory

2 Who We Are, What We Do IFC is the private-sector arm of the World Bank Group We provide the following services: Mergers & acquisitions Commercial lending Equity investment Asset management Presence in 109 countries $52.6bn in total assets (2014) 2

3 Regional Presence Almaty Amman Baku Bishkek Beijing Cairo Delhi Dubai Dushanbe Hanoi Hong Kong Islamabad Istanbul Jakarta Kabul Karachi Moscow Mumbai Riyadh Singapore Tashkent Tbilisi Ulan Bator 3

4 Select Experience in Telecoms Privatization Privatization Equity Loan Loan Sale of 60% of Haiti Telecom Sale fixed-line operator in Botswana $22.5m for data centre in Russia $45m for GSM operator in Afghanistan $240m for GSM operator in Pakistan IFC Transaction Advisory IFC Transaction Advisory Loan Loan Equity Equity Equity $70m to mobile operator in Bangladesh $120m for mobile operator in Turkey $25m for cable & broadband operator in Russia $20m for telecom towers operator In Russia $100m for fixed line operator in Hungary 4

5 Fixed Line Subscriptions, (Per 100 Inhabitants) Source: ITU, Fixed Line Subscriptions, Stagnant or declining except where broadband is making inroads Afghanistan Azerbaijan Kazakhstan Kyrgyzstan Pakistan Russia Tajikistan Turkey Turkmenistan Uzbekistan 5

6 Mobile Phone Subscriptions, Mobile Phone Subscriptions, Rapid growth in penetration of preceding years starting to level off (Per 100 Inhabitants) Afghanistan Azerbaijan Kazakhstan Kyrgyzstan Pakistan Russia Tajikistan Turkey Turkmenistan Uzbekistan Source: ITU,

7 Mobile Phone Market Dynamics, 2013 Central Asia is a lucrative market for service providers Market GDP per Pop. Subscribers Svc. Rev./Yr ARPU/Month Minutes of Use Rev./Min. Annual EBITDA No. of Capita ($) (Mn) (Mn) YoY ($Bn) YoY ($) YoY (Min.) YoY ($) YoY Churn Margin Players China^ 6,897 1, , % % % % % 42.0% 36.2% 3 India^ 1,525 1, % % % % % 49.2% 31.0% 4 Pakistan^ 1, % % % % % 84.0% 40.5% 5 Russia^ 15, % % % % % 48.0% 45.3% 5 Turkey^ 10, % % % % % 34.8% 35.3% 3 Tajikistan* % % % % % unkown 46.6% 5 Kazakhstan 8, % % % % % unkown 47.8% 4 Uzbekistan* 1, % % % % % unkown 46.6% 4 Kyrgyzstan* 1, % % % % % unkown 45.2% 4 Source: ^ BAML Global Wireless Matrix 1Q14, * World Bank GDI (GDP/capita, population 2012), ITU (penetration 2012) and Vimpelcom 1Q14 fin. stat. Rapid growth in subscribers suggests market not fully saturated Drop in ARPU points to competitiveness of market (see also no. of players) Falling prices are spurring rapid growth in minutes of use Nevertheless EBITDA margins exceed those of larger markets 7

8 Access to Internet, (Percnt of Population) Access to Internet, Extremely rapid growth in access via mobile phones Afghanistan Azerbaijan Kazakhstan Kyrgyzstan Pakistan Russia Tajikistan Turkey Turkmenistan Uzbekistan Source: ITU,

9 Investment in Telecoms Sector, Investment Hasn t Kept Pace with User Growth ($m) Afghanistan Azerbaijan Kazakhstan 1, Kyrgyzstan Pakistan 2, , Russia 7, , , , , Tajikistan Turkey 3, , , , , Turkmenistan Uzbekistan Source: PPI Project Database,

10 Contact Details Joseph Mik Investment Officer IFC Transaction Advisory Europe and Central Asia 41A Kazybek Bi Street,1 st Floor Almaty , Kazakhstan Tel.: Cell:

11 Annex: Data Fixed-line Telephone Subscriptions, Afghanistan Unknown 5,130 16,620 13,509 13,500 Azerbaijan 1,310,500 1,401,100 1,506,585 1,683,876 1,724,004 Kazakhstan 3,458,440 3,856,500 4,057,600 4,265,800 4,361,400 Kyrgyzstan 494, , , , ,853 Pakistan 4,416,737 6,144,250 6,079,095 5,721,725 5,803,320 Russia 45,539,288 45,379,601 44,915,829 44,151,461 43,154,728 Tajikistan 286, , , , ,000 Turkey 17,502,205 16,534,356 16,201,466 15,210,846 13,859,672 Turkmenistan 477, , , , ,000 Uzbekistan 1,849,563 1,856,592 1,892,164 1,927,735 1,980,038 Source: national statistics and ITU estimates. 11

12 Annex: Data Mobile-Cellular Telephone Subscriptions, Afghanistan 7,898,909 10,500,000 13,000,000 17,558,265 18,000,000 Azerbaijan 6,548,000 7,757,120 9,100,113 10,120,105 10,125,200 Kazakhstan 14,910,573 17,063,200 19,402,600 25,240,800 30,235,400 Kyrgyzstan 3,394,016 4,487,123 5,275,477 6,277,108 6,797,852 Pakistan 88,019,742 94,342,030 99,185, ,894, ,151,237 Russia 199,522, ,050, ,689, ,116, ,887,751 Tajikistan 3,673,520 4,900,000 5,940,842 6,324,000 6,528,000 Turkey 65,824,110 62,779,554 61,769,635 65,321,745 67,680,547 Turkmenistan 1,135,150 2,132,890 3,197,624 3,511,000 3,953,000 Uzbekistan 12,375,274 16,417,914 20,952,000 25,441,789 20,274,090 Source: national statistics and ITU estimates. 12

13 Annex: Data Fixed-telephone Subscriptions per 100 Inhabitants, Afghanistan Unknown Azerbaijan Kazakhstan Kyrgyzstan Pakistan Russia Tajikistan Turkey Turkmenistan Uzbekistan Source: national statistics and ITU estimates. 13

14 Annex: Data Mobile-Cellular Telephone Subscriptions per 100 Inhabitants, Afghanistan Azerbaijan Kazakhstan Kyrgyzstan Pakistan Russia Tajikistan Turkey Turkmenistan Uzbekistan Source: national statistics and ITU estimates. 14

15 Annex: Data Percentage of Individuals using Internet, Afghanistan Azerbaijan Kazakhstan Kyrgyzstan Pakistan Russia Tajikistan Turkey Turkmenistan Uzbekistan Source: national statistics and ITU estimates. 15