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Azerbaijani IT sector (as of 2016)

Analysis Materials 16 February 2017 14:45 (UTC +04:00)

2016 was one of the most eventful years for ICT market in Azerbaijan. The year was successful. Several major projects were implemented in 2016. Among those projects are commissioning of the biggest DATA-center in the region, certified according to Tier3 standards, and the country's full transition to digital television standard.

As in previous years, almost all world IT-brands (IBM, Oracle, Microsoft, Huawei, etc.) were developed in the market. The top management of many international vendors visited Azerbaijan and it testifies to their special attention to the ICT industry in the country.

There is a demand for information security solutions, hardware and software solutions for building IT-infrastructure and analytical solutions in Azerbaijan.

As for the Azerbaijani telecommunications industry, this market segment, as well as the IT market, also developed. The fixed and mobile communication operators represented on the market continue investing in the technological development of their networks.

Fixed communication operators focused on the development and coverage of broadband infrastructure and the introduction of GPON technology. Along with communication services, it is possible to render other types of multimedia services via this technology. This trend was observed not only in big cities but also in rural areas. GPON technology is expected to replace traditional ADSL for the next three years.

In general, Internet market was distinguished by an increase in the number of connections and the quality of services rendered to end-users in 2016.

The year was also distinguished by the full transition to digital television standard. The technology was not new for the population, as the digital broadcasting has been conducted in parallel with the analogue broadcasting since 2004. Over the years, the population was able to assess the quality of a digital television standard.

The digital broadcasting standard has a number of technical and economic advantages. First of all, this is a new level of modern TV. Its main features are image quality, many channels, the ability to render additional services, as well as saving frequency resources.

Using of certified USB-keys can be also considered as the technological innovation as of 2016. These devices can be used for authentication, protection of e-mails, personal data storage, as well as for signing documents, storing private keys and certificates.

According to the characteristics, the USB keys and smart cards are identical. The only difference is that USB-keys can be connected to a computer directly through the USB port, while the additional equipment - Memory Card Reader is required to use smart card.

Information and communication services worth 1,599.6 million manat were rendered for Azerbaijan's population and organizations in 2016 or 2.6 percent less than in 2015.

Some 80.5 percent of income received through the communication sector accounted for the non-state enterprises during the reporting period.

Around 72.4 percent of the total volume of information and communication services accounted for the services rendered to the population.

Some 51.2 percent of a total volume of obtained income accounted for mobile services.

Around 819.7 million manat were obtained from the mobile communication services in Azerbaijan in 2016.

The revenues decreased by 5.8 percent in the mobile communication sector in 2016 compared to 2015.

Mobile communication market

Over 659,200 mobile devices were registered in the IMEI-code system in 2016.

The number of IMEI-codes of mobile phones registered in Azerbaijan decreased by 2.1 percent in 2016 compared to 2015.

The total number of IMEI-codes registered via e-government portal has exceeded 1.33 million after the system was launched.

The number of IMEI-codes of mobile phones registered in Azerbaijan increased by 2 percent in December 2016 compared to November 2016. More than 64,600 mobile devices were registered in December 2016.

The registration system became operational in Azerbaijan May 1, 2013. It is necessary to register mobile devices imported into the territory of the republic for private use (in the networks of the mobile operators of Azerbaijan) within 30 days. These rules do not apply to the tourists and visitors, arriving in Azerbaijan, as they have roaming.

Operating system market

Android is the most popular operating system in Azerbaijan. As of January 1, 2016, it ranks first with a 40.3 percent share on the operating system market, which is by 15 percent more than in 2015.

Android’s share increased by 12.7 percent on the Azerbaijani operating system market in 2016.

A Microsoft Windows 7 market share decreased by 11.6 percent in Azerbaijan in 2016.

Windows 7 is one of the most popular operating systems in Azerbaijan and ranks second on the operating system market with a 27.8 percent share.

A Windows 7 share on the Azerbaijani operating system market reduced by 13.8 percent compared to 2015.

iOS with a 10 percent share ranked third. iOS market share decreased by 1 percent, Windows XP – 2.6 percent, Windows 8.1 – 4.1 percent, Windows 10 – 5.5 percent, Windows 8 – 1.7 percent and others in 2016 compared to 2015.

PC market

As of 2016, the sale of desktop computers decreased by 7.2 percent in Azerbaijan, the Global Stats statistical center said.

As of late 2016, the market share of desktop computers reached 45.5 percent in Azerbaijan, which is by 10 percent less than in late 2015.

A 10.2 percent growth in notebook and netbook sales was observed in the country as of 2016.

This market segment reached 50.7 percent in the country as of late 2016 or by 13 percent more than in late 2015.

The market share of tablet computers in Azerbaijan reached 3.7 percent.

The market share of tablet computers decreased by 24.1 percent in Azerbaijan as of 2016, which is by 17.3 percent less than in late 2015.

Internet

As of 2016, the number of broadband connections in Aztelekomnet state provider’s network increased by 25 percent. As of early 2017, there are over 200 million users.

The telecommunication infrastructure was upgraded in the district telecommunications nodes in the country in 2016.

Earlier, as a result of inspections it was revealed that some Internet providers worked with Aztelekom upon the "unofficial rules". The issue is the financial transactions, which were carried out between those Internet providers and Aztelekom. Aztelekom took the necessary measures to prevent these facts.

domain zones

Around 26,046 Internet resources were registered in the ‘.az’ national domain.

As of 2016, the number of Internet resources registered in the ‘.az’ domain zone increased by 6 percent compared to 2015.

Around 24,288 websites of the total number of websites registered in the domain zone accounted for the first-level Internet resources, which is by 6.3 percent more than in 2015.

The most popular second-level domain is ‘.com.az.’ Around 1,027 websites (a 0.6 percent decrease) were registered in that domain. By popularity ‘.edu.az’ with 283 websites ranks third. As of 2015, the number of websites registered in the ‘.edu.az’ domain increased by 15.5 percent.

‘.az’ national zone officially appeared August 25, 1993. The registration of ‘.az’ domain costs 20 manat. The annual maintenance also costs 20 manat.

Internet browsers

According to the Global Stats statistics center, as of 2016, the share of Google Chrome web browser increased by 1.1 percent in Azerbaijan.

Chrome is the most popular browser in Azerbaijan. As of January 1, 2017, Chrome covers 59.1 percent of the market, which is by 1.3 percent more than as of January 1, 2016.

As of 2016, the share of Opera browser decreased by 17.5 percent. As of January 1, 2017, it was 11.6 percent, which is by 17 percent less compared to early 2016.

According to the center, the number of Safari browser users increased by 4.7 percent in 2016. Safari's share was 8.7 percent in the Azerbaijani market as of late 2016, which is by 11 percent more than in 2015. The rest market was distributed among such browsers as Android (6.7 percent), Samsung Internet (4.7 percent), Mozilla Firefox (2.3 percent), Yandex (2.1 percent), Internet Explorer (1.1 percent), UC Browser (0.7 percent) and others.

Social networks

According to the Global Stats statistics center, the activity of Facebook users increased by 23.2 percent in Azerbaijan in December compared to November 2016. In general, as of 2016, this index increased by 0.7 percent. As of January 1, 2017, Facebook's share on the social media market in Azerbaijan amounted to 91.5 percent, which is by 27.8 percent more than in 2015. By popularity Facebook ranks first on the social media market in Azerbaijan. Twitter with a market share of 2.7 percent ranks second. Twitter users’ activity decreased by 23.7 percent in December 2016 compared to November 2016. Twitter users’ activity declined by 32 percent in the country compared to early 2016. By popularity VKontakte social network ranks third. VKontakte users’ activity decreased by 78.6 percent December 2016 compared to November 2016. In general, VKontakte users’ activity has decreased by 2.3 times since early 2016. As of January 1, 2017, VKontakte market share was 1.86 percent in Azerbaijan, which is by 34.7 percent more than as of January 1, 2016. Pinterest social network with a market share of 1.42 percent ranks fourth, followed by Youtube – 0.83 percent, Linkedin – 0.49 percent, Tumblr – 0.46 percent and others. e-commerce

The volume of electronic commerce (e-commerce) market in Azerbaijan amounted to 15 million manat in 2016, said the country’s State Statistics Committee.

Total volume of retail electronic commerce increased by 17.9 times in Azerbaijan in 2016 as compared to 2015.

In 2016, total turnover of retail trade in Azerbaijan amounted to 30.2 billion manat, which is by 17.5 percent more than in 2015.

In 2016, goods were obtained by 99.8 percent of non-state business entities, including 10.7 percent of enterprises which have legal entity statuses.

е-signature

According to the Azerbaijani Communication and IT Ministry, the total number of electronic digital signatures (e-signatures) issued by the Azerbaijani National Certification Services Center reached 23,040 in 2016 or by 37.2 percent more than in 2015.

The state bodies were provided with 18,470 e-signatures, 3,170 e-signatures were issued to the legal entities and 1,400 to physical entities.

In general, as of January 1, 2017, some 100,216 people have used e-signature since the beginning of e-signature issuance. Some 65,982 e-signatures were issued to state organizations, 17,024 e-signatures - legal entities and 17,210 - physical entities.

The number of authentications and transactions carried out by using e-signatures has exceeded 8.8 million times as of late 2016. Around 85 percent of the transactions carried out by using e-signatures were implemented by the state agencies, while 15 percent by physical entities and legal entities. In general, as of 2016, more than 4.5 million authentications with the e-signature were registered in the e-government portal.

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