Kcell closes deal for purchase of 5G frequencies

The mobile operator Kcell, which operates under the two brands Kcell and Active, has closed a deal with the government to acquire 5G frequencies in a range from 3,700 to 3,800 MHz.

Kcell signed an agreement with the country authorities on February 17, obliging the mobile operator to build 3,527 basic stations.

The company also reported that the decision on the deal was made on December 19, 2022, days before the consortium of Kcell and Mobile Telecom Service (Tele2 and Altel brands) won a bid for these frequencies.

On December 22-23, 2022, the consortium of the two companies, both controlled by the national company Kazakhtelecom, was declared the winner of the bid for 3,600-3,700 MHz and 3,700-3,800 MHz frequencies. The two winners should pay $345.8 million in total and build at least 7,000 basic stations by 2027.

In February 2023, Kcell borrowed $88.6 million from Kazakhtelecom with the purpose of developing a 5G network. Later, the company successfully negotiated with Swedish Ericsson which is expected to supply the mobile operator with all necessary equipment. Even though neither Ericsson nor Kcell has revealed the financial details of the deal, people familiar with the matter said that it may account for 26% of the company’s own capital as of the date of the contract signing. As of December 2022, Kcell reported $307.2 million of its own capital.