Network and Technology Development

Kcell seeks to maintain excellent network quality in order to ensure high quality service for its subscribers. The Company has substantial network coverage (95.4% of the population of Kazakhstan), with particularly high rates of coverage in major cities, including Almaty and Astana. In addition, the Company’s aggressive roll-out of 3G services, especially in Almaty and Astana, has positioned it as the leading operator in the provision of 3G services. In order to maintain its advantage in terms of quality of service and network coverage, the Company has installed more base stations than any of its competitors.

The Company has a digital mobile network based on GSM technology. This dual-band network, which operates at two frequencies (900 MHz and 1800 MHz), provides both data and voice communications. The Company’s data services are based on GPRS, EDGE and UMTS/WCDMA technologies.

2G

The 2G GSM/ GPRS/ EDGE 900 MHz and 1800 MHz network allows voice calls, data transmission and value added services. The Company’s GSM/ GPRS/ EDGE technology is an advanced 2G technology. Packet data rates vary from 50 Kbit per second to 200 Kbit per second, depending mainly on the handset and type of content used, as well as use patterns.

The Company’s GSM/ GPRS/ EDGE network is constantly expanding and increasing its capacity. Currently, the Company is selectively optimizing and expanding its GSM/ GPRS/ EDGE network, especially in urban areas. By the end of 2012, the GSM/ GPRS/ EDGE network covered 100% of settlements in Kazakhstan with a population of over a thousand people. Equipment for the GSM/ GPRS/ EDGE network was supplied and continues to be maintained by Ericsson and ZTE Corporation.

3G

The 3G UMTS/WCDMA network, considered to be an HSPA+ technology, offers full interactive multimedia capabilities with current potential data rates of up to 21 Mbit per second on the downlink path and up to 5.7 Mbit per second on the uplink path.

By the end of 2012, the UMTS/ WCDMA network covered 100% of settlements with a population of over 50,000 people. Under the terms of the general license, the Company’s UMTS/ WCDMA network must cover all settlements in Kazakhstan with a population of over 10 thousand people by the end of 2014. The UMTS/ WCDMA network is usually combined with the 2G network. This network uses primarily the same basic network equipment as the existing GSM/ GPRS/ EDGE network.

Kcell’s primary objective going forward is to complete the build-out of its UMTS/ WCDMA network and achieve quality and coverage parameters similar to those for its other networks. Kcell also intends to continue performing extensive optimization of its support networks for mobile data technologies.

Network Quality

Kcell seeks to to meet the high standards of customer service, and so maintaining a quality network is a strategic priority. The Company invests and will continue to invest significant capital in developing its network. During the period from 2009 to 2012, Kcell invested a total of KZT 104 billion in network infrastructure.

The Company uses high-tech systems in its network management centers to monitor the status of all switches and cell sites, identify failures and dispatch technicians to resolve problems. Operations support systems are utilised to monitor system quality and identify devices that fail to meet performance thresholds. These platforms generate statistics on system performance such as dropped calls, blocked calls and network failures. The Company’s network operations centers are located in Almaty and Astana.

Kcell continuously optimises its network in order to meet key performance indicators for its services, including reduction in the number of dropped calls, voice quality, accessibility and availability and packet success rate. The Company uses modern means of planning, monitoring and analysis to achieve high network performance with minimal disruptions.