IT sector of Azerbaijan (for 2010)

Azerbaijan's ICT sector is one of rapidly developing fields of national economy. Beyond all fears, the year of 2010 became successful for the local ICT market.-[0000ii

In 2010, the growth in the sector of information and communication technologies in Azerbaijan totaled 35.5 percent, the telecommunications sector - 32.8 percent, postal sector - 29.2 percent, the report of the Ministry of Communications and Information Technology on the results of 2010 said.

The amount of income of the ICT sector and postal services in Azerbaijan's GDP in 2010 made up 1.9 percent. According to the Ministry of Communications and Information Technologies, the GDP of non-oil sector in 2010 amounted to 18.442.0 million manat, while the real volume growth - 7.9 percent.

80 percent of the income earned on the ICT sector and postal services accounted for non-state enterprises. Of the total incomes earned in the sector, 71.3 percent accounted for the mobile market, of which growth rate amounted to 30.2 percent compared with rates in 2009.

Amount of income on the ICT sector and postal services in 2010 increased by 32.1 percent and amounted to 1.230.2 million manat compared with 2009.

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

Around 46 million manat were invested in the Production Unit Aztelekom infrastructure of the Azerbaijani Ministry of Communications and Information Technologies in 2010.

20 million manat out of the total investment had been given as loans.

Talking about what the ministry planned to do in the coming year, Mammadov said that "next year we plan to invest 50 million manat in telecommunications infrastructure".

The Azerbaijani Ministry of IT and Communications has implemented several projects, which included:

Electronization of the PSTN

In the near future telephone networks throughout the territory of Azerbaijan will be converted into electronic form.

Over the past year the ministry concluded converting regional telecommunication hubs to electronic system.

Aztelekom Production Association of the Azerbaijani Ministry of IT and Communication accomplished work over connecting fibre-optic lines in 35 rural ATEs. Relevant work was done in Astara, Barda, Beylagan, Gabala, Gusar, Goychay, Goranboy, Imishli, Khizi, Siyazan, Salyan, Shamkir, Sabirabad and Zakatala districts of the country.

The operators also laid fibre-optic lines in 44 rural ATE, where reconstruction will be carried out.

Azerbaijan is the first country in the post-Soviet space which achieved installation of telephones throughout the republic in 2008 . The share of electronic ATS in Azerbaijan reaches 93 percent. This figure is 95 percent in Baku and 90 percent - the country's regions.

At present, the total number of phones falling for every 100 people throughout the country is 16.2 units. . This figure is 34.6 units in Baku and 10.7 units - the country's regions.

Since early 2010, about 17 million manat was invested in the reconstruction and increase of assembly capacity of regional and metropolitan telecommunications nodes.

Mobile market

The Azerbaijani mobile connections market has been experiencing rapid growth in the past two years. Every year, the competition for less solvent population increases, and the index of average revenue per subscriber is reduced. This trend has encouraged mobile operators in Azerbaijan to introduce content services that are designed to raise incomes and increase the index of average monthly service revenue per subscriber (ARPU). This figure now stands at $15-$17.

A number of positive trends have been observed in the market in recent years. This is a significant subscriber growth, the introduction of new services, deployment of 3G mobile networks, etc.

The subscriber base of mobile operators in Azerbaijan in 2010 increased by 1.342.880 people, amounting to 9.1 million subscribers, the Azerbaijani Communications and IT Ministry reported.

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

Number of mobile communication subscribers

In late 2010, the mobile penetration in Azerbaijan has reached 100 percent. This figure was 86.2 percent in 2009.

Level of the mobile penetration

As of Jan. 1, mobile communications figures in Azerbaijan totaled 8.9 million units, the State Statistics Committee reported.

Of the total number of subscribers, 7.4 million are active. Over the past year, the number of subscribers has increased by 1.2 million.

The volume of telecommunications services provided by communications enterprises in 2010 amounted to 1.2 billion manat, which is 29.7 percent more than in 2009. Of the total volume, 74.3 percent accounted for services rendered to the population.

A total of 67.4 percent of the revenues fell to mobile services, which increased by 30.2 percent compared to the same period in 2009, and comprised 782.6 million manat.

It was possible due to intensive activities of mobile operators in the country, which are improving their services day by day. Thus, Bakcell's increased the number of its subscribers to 2 million. The company operates 2,000 base stations, enabling it cover 98.7 percent of the country's territory, including the regions difficult of access. In general, capacity of Bakcell was increased by 4 times through investments.

Internet market

Volume of Azerbaijani Internet market in 2010 amounted to 45.2 million manat. The volume of income received by the Internet sector of Azerbaijan, as a result of 2010, increased by 9.3 million manat.

Azerbaijani Internet market has substantial growth potential. Over recent years, this segment of the telecommunications market shows steady growth in the number of Internet users.

The overall Internet penetration rate in the country is 50 percent, while the penetration rate of broadband Internet in Azerbaijan reaches 1.36 million users, or 15 percent of entire population.

About 40 Internet service providers operate in Azerbaijan. Almost all of them added integration services to the list of services to get more profit. Providers began to develop methods of wireless broadband connection. The most common types are Wi-Fi, iBurst and WiMAX.

Over the past one and a half year, the prices on the Internet in Azerbaijan were reduced by eight or nine times and today the average price of connection to the ADSL service at speeds of 1 Mbps is 20 manat.

Rates on the Internet over the past two years declined an average of six to seven times which is linked with lower prices for external feeds (both satellite and terrestrial), reduction in the cost of equipment and increasing competition between providers.

Azerbaijan is designing a concept of broadband Internet access development. The concept implies increasing the number of ports of broadband Internet access in the telecommunications operator hubs, reducing tariffs, increasing the number of proposed tariff plans, developing infrastructure for multimedia services, expanding content services (banking, electronic commerce, etc.).

Computer market

The computer market of Azerbaijan has increased by 6,5 times for the last six years, the Azerbaijani Ministry of Communications and Information Technologies said.

According to the ministry, as of January 1, roughly 15 personal computers in Azerbaijan fall to every 100 people. It is 25 percent more than in 2009.

According to the statistics from the ministry, the number of PCs per 100 people, was 2.3 units in 2010. The figure hit 3.1 units in 2006, four units in 2007, eight in 2008, 12 units in 2009.

According to participants of the IT-market, the growth in personal computer market in Azerbaijan amounted to about 20 percent in 2010

The players of the computer market consider 2010 positively. There is a well-developed retail in Azerbaijan.

"Electronic Azerbaijan" project plays an important role in the development of the computer market in Azerbaijan.

"People's Computer" project plays an important role in the development of the computer market in Azerbaijan. This project targets providing every Azerbaijani family with computer. Almost 5 million manat has been invested in the implementation of this project over the past year, while 10,836 computers have been sold in this period, as of Jan. 25. The overwhelming majority of PCs fell on portative devices.

Electronic Azerbaijan

The "State program on development of communication and information technologies in Azerbaijan for 2010-2012 (Electronic Azerbaijan)" was approved by President Ilham Aliyev on Aug.11, 2010.

To date, Azerbaijan has implemented a number of projects to create "Electronic government ". This opportunity to receive information about the activities of a state institution without having to visit it, application of e-payment systems for utilities, services, service providers and others, e registration of business organizations on a "single window", submission of e- tax declaration and e-applications to the State Student Admission Commission. These services will continue to receive the state support in implementing the concept of "Electronic government ".

In general, under the creation of "Electronic government" in Azerbaijan, there will be introduced 20 basic e-services, 12 of which are designed for people and eight - for the business sector.

E-digital signatures

The country has completed the construction of infrastructure for the issuance of digital signatures. Azerbaijan has finished work on drafting legal documents for the issuance of digital signature and the final document is under the governmental consideration.

Pre-issuance of e-digital signatures to businesses and individuals will be carried out in the first quarter of 2011.

Azerbaijan plans to use three centers for issuing digital signatures, one of which will lead the project and two of which will carry out maintenance of public and private entities. The issuance of e-digital, according to accepted international standards, will be implemented on a fee basis, is underway.

Space industry

Azerbaijan works on creation of the space industry and launching the first national telecommunications satellite Azerspace.

OJSC Azerkosmos was established under the Azerbaijani Communications and IT Ministry to launch the satellite into orbit, manage and implement maintenance works. The company is completely owned by the state. 

The establishment of JSC has two objectives. The first objective is to lay the groundwork for the formation and use of outer space for peaceful purposes. The second goal is the use of outer space for commercial purposes. One of the important points of the state program is a launching the telecommunications satellite Azerspace into orbit.

Azerspace's manufacturer is American company Orbital Sciences Corporation. An orbital position for Azerspace has been leased from the Malaysian MEASAT satellite operator.

French company Arianspace has started to manufacture rocket carrier Ariane 5 ECA, which will launch the first Azerbaijani telecommunications satellite Azercpace into orbit in late 2012.

Azerspace is designed to provide digital broadcasting, Internet access, data transmission, VSAT multi-service networks, and governmental communications. Its service area will cover Europe, Central Asia and Africa.

Azerbaijan's capital investment in the project is approximately 319 million manat; 127 million will be spent on operating costs. The payback period is six years, and the income will reach 176 million manat.

The income from the satellite will reach roughly 495 million manat. Incomes will amount to 176 million manat. The revenue will be directed to the technological development of the country.

One of the priority issues facing the ministry is the realization of satellite resources. The ministry intends to withdraw 80 percent of Azerspace resources to the international market, and to use the remaining 20 percent on the intrarepublican level.