Kcell and MTS settle multi-million dollar dispute

After 18 months of confrontation, Kcell and Mobile Telecom-Service (the owner of the Altel/Tele2 brands) have successfully settled their dispute over the use of the telecom network, according to Kcell’s financial statements. Both companies imposed fines and sought compensation from each other, at one point threatening to withdraw from joint agreements.

In 2022, Kcell signed an agreement on the joint use of the telecom network with Mobile Telecom-Service, aimed at constructing new base stations and modernizing existing facilities. The agreement included penalties for non-compliance by either party.

In January 2024, Mobile Telecom-Service sent Kcell a notice demanding a fine of 5.7 million tenge ($10,537) for failing to fulfill its obligations under the 2023 contract. Subsequently, MTS demanded an additional 8.2 million tenge ($15,159) in connection with Kcell’s failure to meet its obligations under the contract for the provision of communication services.

Between April and August 2024, both companies notified each other of their withdrawal from several regions, blaming one another for being unable to eliminate a critical failure — a situation in which the deadlines for commissioning more than 60% of facilities were not met.

As a result, both parties claimed they could not fulfill their obligations in those regions until the failure was resolved. According to the contract, the parties were required to compensate for the costs of constructing facilities where the failure was not resolved on time.

Kcell and MTS had been negotiating an agreement to fulfill 5G license obligations since October 2024, until Dec. 23, 2024, when the corresponding agreement was signed. At the same time, the parties emphasized that the new agreements did not affect previously sent claims and accrued fines.

However, on June 23, 2025, Kcell and MTS signed another agreement, canceling the claims for compensation and confirming the full renewal of the initial agreement. The parties also agreed to settle the dispute over the declared fines within six months.

«The Group’s management believes that the reserves recognized at the financial reporting date are sufficient to cover any future cash outflows to pay off obligations under the network-sharing agreement,» Kcell said in the report.