IT sector in Azerbaijan (I Quarter 2013)

Analysis Materials 13 May 2013 15:13 (UTC +04:00)

It is planned to prepare the ICT development strategy, improve the procedures for the registration of the national domain az, significantly reduce the tariffs for telecommunication services and the Internet because 2013 was declared as the Year of ICT in Azerbaijan.

The action plan will be implemented in four main areas - implementing the organizational measures, improving the legal framework and governance, strengthening the potential of the ICT sector and developing the information society, as well as human resources.

According to the plan, it is expected to organize the work of the State Fund for ICT Support, High Tech Park, the Center for Information Security, ICT center "Virtual Qarabag", IT-University, expand e-services, the range of users and improve the quality of rendered broadband services, transit to digital format of TV broadcasting, introduce the number portability services, etc.

The action plan also includes the measures to increase the number of e-kiosks in the regions to increase the number of users of e-services, to apply the measures for the protection of copyright on the Internet, to develop the distance education, to introduce the electronic-queue and to distribute the apartments, to create Wi-Fi zones in public areas, to protect children from harmful content, to enhance human capacity in the ICT sector. It is expected to conduct national and international forums, conferences and workshops in the field of information and communication technologies.

As of the first quarter of 2013, the share of the sector of information and communication technologies in Azerbaijan's GDP was 1.9 percent.

According to the Azerbaijani State Statistics Committee, information and communication services worth 353.4 million manat were rendered to Azerbaijani organizations and people in January-March 2013, which is 12.5 percent more than the same period in 2012.

Around 72.1 percent of the total volume of information and communication services fell to the services rendered to the population.

Around 58.5 percent of the total amount of revenues fell to mobile communication services or 10.7 percent more compared to the same period of 2012. The total amount of revenues obtained from mobile communication services in the country amounted to 206.9 million manat in January-March 2013.

Some 76.8 percent of income obtained in the ICT sector and postal services fell to the non-state sector.

The revenues of the associations and enterprises subordinate to the Azerbaijani Communication and IT Ministry amounted to 85 million manat in January-March or 2.8 percent more than in the same period of last year.

The volume of investments made by enterprises and structural units of the Azerbaijani Communication and IT Ministry in the ICT sector was 18.76 million manat in the first quarter of 2013.

The issue of increasing the numbering capacity today is not so acute as before thanks to the modernization of telecommunication infrastructure. It is possible to increase the numbering capacity of the network as much as required by transforming the telephone network with the IP protocol. That is, one can get an extra second, third, fourth number and more through one copper cable. According to the statistics, today 115-116 fixed telephone sets fall to every 100 households in the capital.

The broadband Internet development project is being implemented and supported by the Azerbaijani State Oil Fund today. It will give an impetus to the development of the ICT sector in Azerbaijan. The project will cost 430-440 million manat. The project implementation will increase the level of Internet penetration in the country to 85 percent.

As of the first quarter 2013, the revenues of the operator rendering broadband services - "Baku Telephone Communication" production association hit 5.8 million manat or 33.5 percent of total volume of revenues.

The number of ADSL broadband ports in the operator's network has been increased by 12,000 units since early 2013. The number of connections for the period increased by more than 13,500 units.

Internet penetration in Baku exceeds 75 percent. The number of households connected to fixed broadband services hits 250,000 units in Baku. According to the association, this figure is planned to be increased to 400,000 units by late 2013.

The number of broadband connections in "Aztelecom" production association's network under the Azerbaijani Communication and IT Ministry exceeded 114,000 or 21 percent more compared to the indices as of early 2012.

The plans of the industrial association include increasing the number of broadband connections up to 200,000 units, which would increase the monthly revenue from Internet services to 3 million (at an average cost of services worth 15 manat).

According to the production association, all Azerbaijani villages will be covered by fiber-optic lines by late 2013. The operator plans to bring broadband services directly to end-users' houses.

In general, 3.5 kilomter-optical lines are planned to be laid within Aztelecom production association's project of covering the republic with broadband lines.

At present, more than 2,100 kilometers of fiber-optic communication lines have been laid in Azerbaijani regions, of which 570 kilometers were laid by commercial providers.