IT sector of Azerbaijan (January-September 2010)

The amount of information and communication services rendered to business entities in Azerbaijan in January-September amounted to 832 million manat, or 33.4 percent more than the same period of last year. About 74 percent fell on share of paid services provided to population.

According to the Ministry of Communications and Information Technologies of Azerbaijan, during the reported period, the growth in the telecommunications sector amounted to 33.9 percent, in postal services - 20.7 percent. Compared to the same period of last year, the real GDP growth rate made up 4.1 percent, while the share of income earned in the ICT sector and postal services in Azerbaijan's GDP amounted to 2.1 percent.

During January-September, 78.3 million manat was invested in the ICT sector and postal services, which makes up 1.3 percent of total investment in the Azerbaijani economy.

At present, the total number of phones falling for every 100 people throughout the country is 16.2 units. This rate in the capital is 34.6 units, in to other regions of the country - 10.7 units, in rural areas - seven units.

Index of services rendered by telecommunication and postal divisions, in percent

As compared to previous month

As compared to the previous year

2009

January

62,4

107,9

February

102,5

102,3

March

126,6

106,2

April

122,2

111,7

May

91,5

116,9

June

101,6

114,0

July

107,0

114,9

August

91,9

114,0

September

104,5

113,3

October

106,5

113,7

November

86,0

112,8

2010

January

118,0

118,0

February

119,5

127,9

March

110,4

124,8

April

127,2

124,9

May

92,0

125,1

June

114,2

128,2

July

110,9

131,3

August

90,0

132,9

September

99,5

133,4

About 67.8 percent of the revenue fall to mobile services, of which growth, compared to the same period of last year, hits 34 percent, totaling 564.3 million manat.

The subscriber base of mobile operators in Azerbaijan in January-September increased by 842,880 people, amounting to 8.6 million subscribers, the Ministry of Communications and Information Technologies of Azerbaijan reported.

According to the statistics of the Ministry, by the end of 2009 mobile communication services were used by 7,757,120 subscribers.

Number of mobile communication subscribers.

2003

1 057 100

2004

1 456 500

2005

2 242 000

2006

3 323 500

2007

4 519 000

2008

6 548 000

2009

7 757 120

According to the agency, as of October 1 this year, mobile penetration in Azerbaijan reached 94.7 percent. This figure is as of Jan. 1 was 86.2 percent.
Mobile penetration level

2003

12,8

2004

17,4

2005

26,8

2006

39,0

2007

52,4

2008

75,0

2009

86,2

The overwhelming part of mobile users in Azerbaijan accounts for GSM standard. Currently three GSM operators function in Azerbaijan, including Azercell Telecom (3.7mln subscribers), Bakcell (2mln), Azerfon (1.5mln).   

Azerbaijani State Statistics Committee also notes the slowing in rate of decline in the production of ICT equipment in the country. So, in January-September 2010, computer, electronic, optical and electrical equipment was produced at 74.9 million manat, including in September at 13.2 million manat.

In particular, over 9 months, the country produced electrical products at 37.1 million manat (6.6 million manat in September), which is 67.5 percent higher than production during the same period of 2009. At the same time, in January-September 2010, the country produced computers and electronic equipment at 37.8 million manat (6.6 million manat), 14.7 percent lower than the production during the same period of 2009.

Next reduction of tariffs for the lease of international communication channels by the primary provider Delta Telecom, which is recorded in Azerbaijan in September may affect the Internet market. The preventing factor for the development of the Azerbaijani segment of the Internet is the high tariffs for telecommunication services for secondary providers. New tariffs of Delta Telecom to lease international communications channels took effect from September 1 and include a fixed cost - 50 manat for each extra purchased bandwidth of 1 Mbps, over the leased bandwidth of 100 Mbps.

Today, the major expenses of providers are spent on telecommunications and transmission services, and therefore, in order to achieve the lowest possible rates for Internet services, the tariff on lease of international channels must be reduced several times.

In recent years, the major costs of providers, which mainly accounted for the lease of channel, have down from about 60 percent to 40 percent.

Azerbaijani Communications and Information Technologies Ministry's Information Computing Center has completed works on connecting 17 regional telecommunication nodes to the national Internet infrastructure AzDATACOM.

Works on laying the main fiber-optic segment AzDATACOM are carried out under the project "National E-Governance Network Initiative".

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