INTERNET IS COMING TO TURKMENISTAN, BUT AT ITS OWN

C O N F I D E N T I A L SECTION 01 OF 02 ASHGABAT 001380

SIPDIS

SIPDIS

STATE FOR SCA/CEN, EEB

E.O. 12958: DECL: 12/19/2017
TAGS: PGOV PREL ECON EINV EFIN TX
SUBJECT: INTERNET IS COMING TO TURKMENISTAN, BUT AT ITS OWN
PACE

REF: ASHGABAT 1096

Classified By: Charge Richard E. Hoagland for reasons 1.4 (B) and (D).


1. (C) SUMMARY: According to an AmCit businessman in the
information technology sector, progress on setting up a
countrywide Internet network is behind schedule, perhaps
because of the authorities' fear of change. That being said,
the Ministry of Communications will announce the winner of a
tender to install a Worldwide Interoperability for Microwave
Access (WiMAX) network in Ashgabat at the end of January.
The businessman indicated that he lost out on a tender to
install automatic teller machines (ATMs) for Dayhanbank that
would reportedly accept internationally-recognized credit
cards, but acknowledged that he does not completely regret
not winning this deal because of the complicated installation
and technology challenges involved. Lack of planning -- and
the Turkmen demand for instant gratification -- are common
themes, and, he says, it is still apparent that the
Government of Turkmenistan is reticent to accept advice from
international organizations, international financial
institutions, and donors with experience in such matters.
END SUMMARY.

TENDER FOR SETTING UP AN INTERNET NETWORK IN ASHGABAT


2. (C) The U.S. businessman who opened up an information
technology company in Turkmenistan earlier this year (reftel)
discussed his progress in entering the market on December 18.
He expects to find out in late January whether he won the
Ministry of Communications tender for installing a Worldwide
Interoperability for Microwave Access (WiMAX) network in
Ashgabat (reftel). This network would in effect bring
broadband Internet access to Ashgabat. The WiMAX tender also
includes a component for training in the operational -- not
business -- aspects of running an Internet Service Provider
(ISP). The businessman predicts that Ashgabat will offer
broadband Internet by June 2008. However, due to officials'
foot-dragging, the network will not be set up in time for
access in April. As before (reftel),he expressed
frustration that the Turkmen are making technology decisions
without the proper level of knowledge on what the purpose of
each is for and does not agree with their choices.


3. (C) The businessman observed that the delay in
introducing an Internet network is understandable in light of
the magnitude of the changes on the horizon. The Turkmen are
still gauging if they are ready for these changes. For
example, there was discussion of installing a network in Mary
and Turkmenbashy at the same time as the Ashgabat network,
but the discussion disappeared. He thinks the authorities
want to see how the introduction of Internet in Ashgabat
proceeds before expanding to other regions.

SAME OLD STORY: HURRY UP AND WAIT


4. (C) The businessman has a deal to provide Senagatbank
with money detectors and money counters, which the bank wants
in place by January 1. He expressed some frustration that,
although he and the bank have been discussing the deal for
months, the bank wants to see samples before they will
authorize the order, so he is currently trying to get
machines into Turkmenistan so he can place the order.
Putting the machines in place by the bank's desired deadline
of January 1 will be a challenge, on account of the U.S.
Christmas holiday season.

ATMs THAT TAKE CREDIT CARDS: INTEGRATION WITH THE
INTERNATIONAL FINANCIAL COMMUNITY


5. (C) A Swiss company won a Dayhanbank tender for the
installation of automatic teller machines (ATMs) that will
issue manat and possibly dollars. According to this contact,

ASHGABAT 00001380 002 OF 002


the U.S. company National Cash Register had also bid. He
said this ATM system will accept credit cards and connect
Turkmenistan to the worldwide financial credit-card network.
While the businessman was on one hand disappointed that he
did not win this tender, he anticipates that the winning
company will face many complications with the installation
and implementation. He pointed out ATM machines have only
four cartridges. The largest denomination of manat is 10,000
-- about 45 U.S. cents. It's unclear how the banks will keep
the cartridges stocked with manat until the introduction of
the redenominated currency in 2009.

GOOD NEWS FOR U.S. COMPANIES, IF TRUE


6. (C) The businessman heard from an associate at a company
with unspecified ministry contacts that President
Berdimuhamedov was buoyed by his visit to the United States
during the United Nations General Assembly. Berdimuhamedov
reportedly called from New York and ordered his staff to
remove all roadblocks from the U.S. companies that want to
register in Turkmenistan.


7. (C) COMMENT: Change is coming to Turkmenistan -- or at
least Ashgabat -- but as usual, at its own pace.
Consultation with international organizations, international
financial institutions, or donors could have prevented the
possible problem of lack of capacity of ATM cassettes to hold
enough manat to satisfy customers' needs. Both this issue --
and the Internet technology choices that are being made --
point to a reticence on the part of the government to accept
advice from those with experience. Also, since the
government of Turkmenistan is concerned with its citizens'
ability to deal with the forthcoming changes, perhaps the
authorities should consider some programs to start educating
people on the function of credit cards, ATMs, and the purpose
of the Internet. Asking the government of Turkmenistan to
propagandize on Internet usage is a hot potato, but
commencing a dialogue with the population directly on matters
of concern would be a good start. END COMMENT.
HOAGLAND