Sustainability Report / 2024

Overview of activities and value chain

GRI 2-6

The value chain of Uzbektelecom JSC includes:

Provision of fixed and mobile communications services, broadband Internet access, IP television, data transmission services, cloud services, and other telecommunications services in the Republic of Uzbekistan.

Procurement of equipment (telecommunications, network, IT), software, consumables, infrastructure construction and maintenance services, energy, and other goods and services necessary to ensure operational activities.

Subscribers (individuals and legal entities) using communication services, as well as other companies interacting with Uzbektelecom JSC under partnership agreements.

Other significant business relationships include partnerships with suppliers of technology, equipment, content, as well as other telecommunications operators under roaming agreements and traffic exchange.

In 2024, Uzbektelecom JSC implemented significant improvements to its value chain in line with the Uzbekistan 2030 Strategy. These developments cover infrastructure, services, organizational structure, and regulatory compliance.

Modernization of network infrastructure and technologies

Expansion of the fiber-optic network

In 2024, more than

72,572

kilometers

of fiber-optic communication lines were laid, increasing the total length to 286,583 kilometers.

This expansion was aimed at providing high-speed Internet access to

96%

of the country’s population

Introduction of 5G and testing of 5.5G

Uzbektelecom JSC launched

5G

technology in all regional centers,

making Uzbekistan the first CIS country with nationwide 5G coverage.

In addition, the company tested a 5.5G network, making Uzbekistan one of the first countries in the world to try out this cutting-edge technology.

Base station modernization

The company installed

2,608

new base stations

and upgraded 4,363 existing ones.

In addition, more than

2,400

sites

were upgraded from 3G to LTE (4G), which improved mobile network performance.

Service innovations and digital offerings

Introduction of unified service packages

The «Hammasi birga» («All Together») tariff package was launched, combining home Internet, IP telephony, television, and mobile communications into a single tariff plan, providing savings and convenience for subscribers.

Improved customer support

A Telegram chatbot was introduced to optimize customer requests, resulting in a 30% reduction in contact center inquiries.

Expanded video surveillance services

An innovative video surveillance service was introduced, allowing businesses to track customer traffic, recognize vehicle license plates, and enhance security measures.

The transformations carried out in 2024 significantly changed the value chain of Uzbektelecom JSC, improving infrastructure, diversifying services, optimizing organizational structures, and bringing them into line with international regulatory standards.

Regulatory changes and market liberalization

Abolition of the monopoly on international Internet channels

From January 1, 2025, private Internet providers in Uzbekistan will be allowed to connect directly to international Internet channels, which will expand their technical and operational capabilities. This change is part of broader economic reforms aimed at bringing the country into line with World Trade Organization (WTO) standards.

New telecommunications legislation

The revised Telecommunications Law №-1015 dated December 27, 2024, has been approved. It provides for the creation of an independent regulatory body to oversee the provision of services, licensing, and ensure fair decisions for all market participants.

Management of material topics

GRI 3-3

Procurement is an important part of Uzbektelecom JSC ‘s operations and is aimed at providing the Company with the resources it needs. It can have both positive and potentially negative impacts on the economy, the environment, and people.

The Company conducts its procurement activities in accordance with the legislation of the Republic of Uzbekistan, ensuring transparency, efficiency, and support for domestic producers. The legal framework is based on laws and regulations aimed at promoting competition, combating corruption, and simplifying procurement procedures.

Key regulatory documents:

Law of the Republic of Uzbekistan «On Public Procurement» №-684 dated April 22, 2021.

Law of the Republic of Uzbekistan «On Competition» №-850 dated July 3, 2023.

Law of the Republic of Uzbekistan «On Combating Corruption» №-419 dated January 3, 2017.

Decree of the President of the Republic of Uzbekistan «On Additional Measures to Support Domestic Producers» №-4812 dated August 21, 2020.

Decree of the President of the Republic of Uzbekistan «On Additional Measures to Ensure Transparency and Improve the Efficiency of Public Procurement» №-5171 dated July 2, 2021.

Decree of the President of the Republic of Uzbekistan «On measures to further improve the procedure for reviewing pre-project documentation for investment and infrastructure projects, tender procurement documentation, technical specifications for public procurement, and contracts» №-332 dated July 25, 2022.

Decree of the Cabinet of Ministers of the Republic of Uzbekistan «On measures to support domestic producers»№-41 dated January 29, 2021.

Resolution of the Cabinet of Ministers of the Republic of Uzbekistan «On approval of the Regulations on the procedure for organizing and conducting procedures related to public procurement»№-276 dated May 20, 2022.

Procurement Policy («Xaridlar Siyosati»), which defines the procedure for organizing and conducting procedures related to the Company’s procurement. This policy applies to all structural divisions and branches of the Company.

Procurement activities are also regulated by the Civil Code of the Republic of Uzbekistan, the Law «On the Contractual and Legal Basis of Economic Entities» and the Law «On Joint Stock Companies and the Protection of Shareholders’ Rights”.

To track the effectiveness of its procurement activities, Uzbektelecom JSC monitors contract performance, maintains a register of concluded contracts, and analyzes risks in the procurement process. in order to increase the transparency of procurement activities and minimize corruption risks at all stages of procurement procedures, great attention is paid to the automation of business processes, thereby minimizing human intervention at stages with a high level of corruption risk.

There is a Commission for the Organization and Coordination of the Company’s Procurement Activities, which is guided by the following principles in its activities:

01

efficiency, effectiveness, and economy in the use of allocated funds;

02

popularity, transparency, openness, and transparency of procurement procedures;

03

ensuring a healthy competitive environment, preventing discrimination, restrictions, or preferences in relation to individual procurement participants (except in cases where such preferences are established by applicable law).

Implementation of policy commitments

GRI 2-24

The highest management body responsible for implementing the procurement policy is the Company’s Board of Directors. The Procurement Committee is responsible for the direct organization and conduct of procurement. The Committee consists of representatives from various structural units (management, finance department, procurement department, legal department, etc.). This ensures the distribution of responsibility and control at different levels of the organization.

The procurement policy is integrated into the Company’s operating procedures and is binding on all employees and subsidiaries. The procurement process is linked to infrastructure management and service provision, as reflected in the relevant process maps. Various factors are taken into account when making procurement decisions, including financial, technical, and legal aspects.

Supplier pre-qualification procedures are applied. The procurement policy and its principles are taken into account when concluding contracts with suppliers. The Compliance Department conducts ongoing monitoring to identify and prevent corruption in procurement in a timely manner, eliminate its causes, prevent conflicts of interest, and foster intolerance towards corruption. as part of this monitoring, the Compliance Department provides the Procurement Commission with information on the presence or absence of such circumstances when selecting the best bids and conducting tenders. The verification of counterparties is described in detail in the relevant Company manual.

Share of expenses on local suppliers

GRI 204-1

Uzbektelecom JSC attaches priority to working with local suppliers. The geographical definition of «local» and the main place of operation of Uzbektelecom JSC refers to the country where the Company is present, namely the Republic of Uzbekistan.

In 2024, the number of local suppliers was 1,903 out of a total of 1,905, which is 99.90% in terms of number and 98.88% in terms of the amount of purchases. Despite a 16% decrease in the total amount of purchases compared to 2023, the share of local suppliers in monetary terms increased by 2.55 percentage points, which indicates the Company’s growing focus on developing the domestic market and supporting national producers.

Procurement expenditure, 2023–2024

Share of purchases from local (Uzbekistan) suppliers	2023	2024	Deviation, %
Total number of suppliers	1,878	1,905	1
Amount, million sum	1,568,652	1,317,307	-16
Number of local suppliers	1,876	1,903	1
Total purchases from local suppliers, million sum	1,511,075	1,302,551	-14
% by number	99.89%	99.90%	0.01 p.p.
% by amount	96.33%	98.88%	2.55 p.p.

Procurement system