IT sector of Azerbaijan (january-october 2010)

The ICT sector in Azerbaijan is currently the fastest growing sector of the national economy.

The amount of information and communication services rendered to business entities in Azerbaijan in January-October totaled 933 million manat, or 32.1 percent more than the same period of last year. About 74.1 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.

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

About 67.6 percent of the revenue fall to mobile services, of which growth, compared to the same period of last year, hits 33.2 percent, totaling 630.6 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.

Number of mobile communication subscribers.

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

Mobile penetration level

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 increasing in rate of decline in the production of ICT equipment in the country. So, in January-October 2010, computer, electronic, optical and electrical equipment was produced at 87.1 million manat.

The volume of traffic received by the country in January-September increased by 75.9 million minutes and reached 503.5 million minutes compared to the same period of last year, the report of the Communications and IT Ministry, prepared for the nine months, said.

According to the ministry, the volume of outgoing traffic increased 0.3 million minutes and hit 118.2 million minutes.

The number of international channels for the period amounted to 7,841 units. The construction of fiber-optic cable line in the direction of Siyazan-Shabran-Guba-Samur was completed to ensure sustainability of the international system of communication and increase the capacity of optical networks.

Tata Comminications Company organized direct channels over fiber-optic lines to improve the quality of communication.

About 1,600 subscribers of CDMA standard have been registered in Aztelecom PU of the Azerbaijani Communications and IT Ministry, the ministry reported. The number of subscribers increased by 6.4 percent to 27,000 subscribers since early 2010. Aztelekom's subscriber base hit 18,654 subscribers and "Baku Telephone Communication" - 8,546 subscribers as of Oct.1.

CDMA wireless network covers 63 percent of the country's settlements and the wireless communication service is available in 27 regions. CDMA standard is an alternative to DSL broadband access, and allows easier access to information (the Internet), particularly in remote areas where the cost of cable is unreasonably high.

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.