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