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IT sector in Azerbaijan (Jan.-July 2012)

Analysis Materials 12 September 2012 10:52 (UTC +04:00)

Azerbaijan's IT market has been experiencing dynamic growth since early 2012. According to the Azerbaijani State Statistics Committee, the volume of information and communication services rendered to organizations and people in January-July totaled 779.4 million manat.

The growth rate of this sector for the last period at constant prices was 18.5 percent. Around 72.1 percent of the total volume of services in the field of information and communication services fell to the rendered services.

Around 59.7 percent of the total amount of revenues fell to the mobile services, which is 16.5 percent more compared to the same period of 2011. In total, the volume of revenues obtained from mobile services, hit 465.5 million manat.

Today, three GSM-operators: Bakcell, Azercell, Azerfon operate in Azerbaijan. The number of mobile telephony users has not been changed. It is at the level of indices as of early 2012. Around 110 mobile phones fall to 100 people.

The coverage of broadband internet is being expanded in Azerbaijan. According to the Communication and IT Ministry, the level of Internet penetration in the capital reached 89.5 percent, the rate exceeds 60 percent in the regions. This figure hits 65 percent in the Republic, of which 30 percent fall to the category of broadband Internet users. According to the statistic estimates of the Azerbaijani Communication and IT Ministry, around 78 personal computers fall to 100 people in the capital. Around 48 people of 100 have personal computers in the regions.

Azerbaijani private Internet service providers laid 419.8 kilometer optic lines in the direction of 17 regional telecommunication nodes of Aztelekom production association.

According to the production association, the work is underway within the project of expanding broadband Internet in rural areas initiated by a state operator. The private Internet service providers Azeronline, Alfanet, Caspel, Smart, Q-Telekom, Data Plus and Premier Group have been involved in the project. The total length of the cable infrastructure, which will be laid by Internet service providers, will amount to 1,400 kilometers.

According to the agreement signed between Aztelekom and providers, it is planned to lay a fiber-optic cable with a length of 582.3 kilometers in 17 telecommunication nodes of the state operator at the initial stage. This covers a total of 104 rural telephone exchanges.

According to Aztelekom's forecasts, all Azerbaijani villages will be covered by fiber optic lines by late 2012. The operator plans to bring broadband services and services based on them directly to the end users' houses. In general, it is planned to lay optic lines with a length of 3.5 kilometers within Aztelekom's project. The state operator is engaged with the construction of a certain part of the main line. Private providers will deal with the construction of the rest part.

Aztelekom has announced about its readiness to provide Internet service providers with exclusive rights, such as bringing providers' traffic to the final destination, technical support, etc.

At present, over 300 villages have been provided with broadband Internet in the regions. Around 11 percent of fixed telephony subscribers are broadband Internet users in the regions. Aztelekom plans to increase the number of broadband connections up to 200,000 units.

As of January-July, the e-commerce market volume in Azerbaijan amounted to 775,500 manat. According to the State Statistics Committee, members of e-commerce are the legal and physical entities engaged in e-commerce. They are buyers of goods and services.

The total retail trade volume in Azerbaijan over the past period was 9.6 billion manat. Consumer goods were sold by 9.3 percent more compared to the same period of last year.

Around 1.2 billion manat fell to the legal entities, 4.5 billion manat - private entrepreneurs engaged in trade without legal registration, 3.9 billion manat - physical entities operating in markets and fairs. Around 5.4 billion manat fell to food and 4.2 billion manat - non-food products.

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