Azerbaijani IT sector (January-March 2014)

The Azerbaijani information and communication technology sector (ICT) is one of the most dynamically developing sectors of the national economy due its profitability and total profitability of this business. Although the main catalyst for the growth of Azerbaijan's economy is the oil and gas sector, the ICT sector also increases its capacity every year.

The organisations and people of Azerbaijan were provided with information and communication services worth 364.4 million manat in Jan.-March 2014, which is 12.4 percent more than in the same period of 2013, according to the State Statistical Committee of Azerbaijan.

Some 72.3 percent of the total volume of information and communication services accounted for services rendered to the population. Around 58.2 percent of the total amount of revenues fell to the mobile services.

The total amount of revenues from mobile services in the country amounted to 212.2 million manat or by 7.8 percent more than in the same period of 2013.

The volume of revenues from Azerbaijan's ICT sector and postal service increased by 13.3 percent in a year and stood at 381 million manat as of the first quarter of 2014, according to the country's Ministry of Communications and High Technologies.

The growth rate of Azerbaijan's ICT sector was 13.1 percent, IT- 23.6 percent and postal sector - six percent, compared to the same period of 2013.

Non-government communication enterprises accounted for around 78.3 percent of the revenues from the ICT sector and postal service. The share of the revenues from this sector totaled 1.9 percent of the country's GDP during the reporting period.

The total volume of inbound traffic dropped by 30.4 million minutes and stood at 97.8 million minutes as of the first quarter. The volume of outbound traffic decreased by 10 million minutes and totaled 33.1 million minutes, according to the report.

The enterprises and structural units of the Azerbaijani Ministry of Communications and High Technologies invested around 13 million manat in the ICT sector in Jan.-March, 2014.

The total volume of investments made in Azerbaijan's ICT sector stood at 29.5 million manat, or nine percent of the total volume of investments made in the country's economy during the reporting period.

Six new ATX (automatic telephone exchange) were commissioned, and 16 more were remodeled using the investments made by communication enterprises.

The circuit number capacitance of ATX network over the country exceeds 1.8 million, while the number of basic telephone sets is over 1.47 million.

Currently, the total number of telephones in Azerbaijan is 18.65 per 1,000 people, in Baku - 37.7, other regions of the country - 11.61 and in rural areas - 7.21.

Around 69.01 telephones fall to each 100 households in the country. This figure is equal to 136.76 telephones in Baku, 48.1 - in the country's regions and 32.8 - in rural areas.

The mobile penetration level in the country remained unchanged - 110 percent - in the first quarter.

The wireless communication network of CDMA standard of Aztelekom and Baku Telephone Communication production associations covers approximately 80 percent of the country's population. The total number of subscribers exceeds 30,800, including around 21,032 subscribers in Aztelekom network and 9,825 - in Baku Telephone Communication network.

Third of revenues of Azerbaijan's state communications operator falls to broadband Internet services. As of March, the share of revenues from broadband services reached 33.5 percent in the total volume of revenues of Aztelekom production association of the country's Ministry of Communications and High Technologies. This figure was equal to 21.2 percent in early 2013.

As of late 2013, the speed of generated traffic volume in the state provider's network exceeded 20 gigabits per second. The number of broadband connections in the service area of the state operator increased by 50 percent (87,700) in the past year and exceeded 200,000. Some 116,000 of this volume are subscribers of AztelekomNet state provider.

Currently, some 17.4 users of broadband services fall to each 100 households in Azerbaijan, and 29.4 users fall to each 100 subscribers. The number of subscribers of the Public Switched Telephone Network (PSTN) of the state operator exceeds 682,000. Around 12.4 fixed telephone lines fall to each 100 people, and about 59.1 lines - to each 100 households.

Internet

The penetration rate of broadband internet in Baku reaches 51 percent. The total number of landline telephone numbers in use, is 607,000. The owners of 309,000 of these numbers (including subscribers of BakinterNetand private providers) are subscribers of broadband Internet. This figure was equal to 35,000 in 2010.

The traffic capacity grew from 1.5 gigabits to 40 gigabits in networks of Baku Telephone Communications production association and BakinterNet state provider over the last three years. But if we include also the traffic of private providers, then this figure exceeds 50 gigabits.

The state operator started to provide services of ultrafast access to multiservice network on VDSL technology. The services on VDSL became available as a result of modernization of the telecommunications network on the basis of NGN technology.

Currently, the share of ATX, built on the basis of NGN technology in Baku, hits 70 percent. Transition to NGN network is one of the priorities with which the operator intends to stimulate the growth of new services segment in the long term.

Currently, the state operator plans to reconstruct a number of ATX in the capital on the basis of this technology. This will allow to increase the circuit number capacitance of the telephone network and to render the services of IP-telephony, broadband internet and IP-TV, alongside with traditional communication services.

e-commerce

As of January-March 2014, the volume of e-commerce market in Azerbaijan stood at 683,700 manat. The total volume of retail e-commerce in Azerbaijan rose by 31 percent compared to the same period of 2013.

E-commerce market participants are legal entities and individuals who are buyers of goods and services and engaged in e-commerce.

Some 81.7 percent of goods purchased in electronic form by the population of Azerbaijan during reporting period, was bought by legal entities and 18.3 percent - by individuals. Non-food products accounted for 91.6 percent of e-commerce market turnover.

The total volume of retail commerce in Azerbaijan amounted to 5.1 billion manat in Jan.-March, 2014. The sale of consumer goods increased by 9.2 percent in the country, compared to the same period of 2013.

About 2.7 billion manat fell to consumer goods (food, beverages and tobacco), and 2.4 billion manat - to non-food products. The share of non-food products has increased by 4.5 percentage points during the reporting period.

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