Hosting in Kazakhstan or how to disrupt Jackpot

From today in Kazakhstan, the value of .kz and .az domain names soared more than 2 times. Interesting fact: the cost increased due to requests from the leaders of two hosting providers that control more than 80% of the domain market to the Kazakhstan Association of IT Companies, which is the administrator of the first-level domains .kz and. Yesterday afternoon, customers of one of the largest hosting providers in Kazakhstan,, received notifications of price increases for registration and renewal services for national domains from 01/15/2014. As arguments, the order of the "Association of IT companies of Kazakhstan" dated 01/13/2014 , which sets new prices from 01/15/2014, is proposed . Actually, this order appeared, thanks to itself.

For reference: the direct responsibility for maintaining the operability of the national level 1 domains lies with a completely different organization, namely, the " Kazakh Center for Network Information ".

The ascertaining part of the document provides information that the increase was due to eliminate the imbalance between the cost of annual maintenance of domain names in the Kazakhstan Internet segment, to ensure the further development of the Distributed Domain Name Registration System and the payback period for Registrars.

The basis of the order stated:
1) Letter of the KazNic Institution dated December 29, 2014 No. 141229/1 on 2 sheets ;
2) Letter of the Registrar HOSTER.KZ dated December 29, 2014 No. 231 on 1 sheet ;
3)Letter of the Registrar dated 12/19/2014 No. 70-1 on 1 sheet ;
4) Certificate of competition in the market for the provision of domain name support services from the KazNic institution dated 24.12.2014, on 2 sheets ;
5) A comparative analysis of domain name support services by country on 1 sheet .

An interesting fact: both Hoster.KZ and, which control more than 80% of the domain name market, practiced dumping policies regarding the cost of national domains. Which is understandable, because these are the largest hosting providers who, in addition to the domain, sell high-margin services in the form of hosting a site on shared hosting or VPS / VDS. Very often, domain names were handed out for free when buying a hosting. At, the number of free domains depended on the hosting plan chosen, and their number could reach 10.

It so happened that in almost any business, the sale of basic and related goods and services is carried out. To obtain a competitive advantage, the method of reducing the price of one type of product or service is widespread, which will be compensated by the sale of other goods or services that will be on the buyer's check. This universal method is used by everyone: from food supermarkets advertising “crossed sausage or cheese” to large manufacturers of industrial equipment that compensate for the price reduction by setting up, launching and servicing the equipment sold. The world-famous McDonald's network does not hide the fact that the network does not earn anything on branded hamburgers, and it makes a profit by selling “french fries” and drinks.

But now two leading market players are worried about the problem of low domain prices, which supposedly affects the quality of services offered by registrars. Mr. P.M. Gusev, director of the KazNIC institution, cited cost statistics, where he stated that the dumping policies pursued by the Registrars do not allow them to provide services with the proper level of quality, as well as introduce innovations in the field of domain name support services (introduce DNSSEC).

Ironically, in the statistics provided by the institution, just both of the main players Hoster.KZ and PS.KZ, insisting on losses from dumping, have the lowest prices for domain name registration / maintenance services than other registrars. What they happily tell their customers. does it like this:

And goes further and regularly holds promotions, selling domains in general for 999 tenge and aggressively advertises on thematic blog platforms of Kazakhstan:

Honestly, it is not entirely clear why the head of KazNIC was interested in the profit of registrars - ordinary resellers. What prevented registrars from independently raising the price of a service if it is critically unprofitable for them? Another thing is that due to difficulties in the economy and several devaluations in Kazakhstan, additional money was required directly to the “Kazakh Network Information Center” for the costs associated with maintaining the operability of the national first-level domains. But in this case, it is necessary to discuss price increases for registrars, and not to limit the minimum retail price for consumers.

The second argument, which leads KazNIC to increase the price, is a comparative analysis of the support of domain names of different countries.

What logic was guided by KazNIC, trying to argue the increase in the minimum retail price for domains, offering an analysis of the cost of domain names in various countries in a strange way correlates with Kazakhstani reality. But even in this “document” two serious oversights were made:

1. Pay attention to the numbers in the certificates, judging by the cost of the .ru domain, officially recommended retail prices are used 600 rubles. It's no secret that domains can be purchased from resellers for 99 rubles. And they get the reseller at a price below 89 rubles.

2. The cost of Kazakhstan national second level domains is stated as 1400 tenge, which is the minimum cost offered on the market. The official recommended price is 3400 tenge.

Therefore, it was necessary either to list only recommended prices or only the lowest prices on the market. In any case, the “analysis” would then have seemed completely unattractive in relation to the previous prices for Kazakhstan national domains. Additionally, I can inform you that due to the depreciation of the ruble, the value expressed in dollars as of December 24, 2014 is unreliable.

Hosting Arguments

Director of Hoster.KZ D.S. Sukhachev, sends a letter to the “Association of IT Enterprises of Kazakhstan” to consider the possibility of establishing the official cost of domain registration in the .kz, .қaz domain at least 3000 tenge without VAT for retail customers and 2800 tenge for wholesale buyers, arguing as follows:
“We want to maintain a high level of service - customer support by phone, operational support through the ticket system, development and improvement of software for the convenience of customers, support for a mobile application, payment for the placement of primary and backup equipment. Unfortunately, with current prices, it is getting harder and harder every day. ”

The head of, the second largest market player N.I. Krasulin:
“Currently, the following situation has developed: expenses for customer support (taxes; remuneration of labor for technical support, sales department, accounting; expenses for equipment and software development; paper, mailing of documents, telephony) for the service“ Registration and support of domain names ” significantly exceed our income. "

So what is the reason for the real increase in prices, is it possible that the appetite of the key players of the Kazakhstani Internet space has become a banal increase in appetite? The presented documents and the lack of a calculation methodology (namely, “openness of information” is promoted by the “Kazakhstan Association of IT companies”) not only do not justify the price increase, but raise additional questions. Maybe it’s worth paying attention to the competent authorities of the Republic of Kazakhstan and giving a legal assessment of the actions of the “monopolists”, and if it is confirmed approximately to punish the guilty? What does the habrasociety think about these events? Is there a conspiracy?

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