CHANGES IN TARIFFS CONCERNS COMMUNICATIONS SPHERE IN AZERBAIJAN

After the increase of tariffs for some oil products in the country there is probability for rise of prices of services in the telecommunications sector. The Ministry of Communications and Information Technologies has presented 2 packets of proposals to the Tariff Council on change of tariffs. In compliance with the first packet of proposals, the subscription fees for local calls is to be increased from 3,300 manats to 10,000 manats, which enables to decrease the tariffs of international calls 30-40%.

The second packet first of all takes into consideration the interests of the law-income families. Unless the subscribers use the service of international calls, they will have to pay the same fees - 3,300 manats, while in exchange they will not have an access to international channels, Rashad Nabiyev, the head of the Finances, Registration and Economic Analysis Department of the Communications Ministry, underlined.

Earlier, Ali Abbasov, the Minister for Communications and Information Technologies, had repeatedly told media that the tariffs of international calls in Azerbaijan are rather higher as compared to other foreign countries, which in its turn affects on the use of services.

*Comparative table of tariffs of long-distance calls from Baku, Sumgayit and Absheron peninsular


в"-

Zones

Tariff for 1 minute/manat

(VAT including)

Number of contours in minute

Cost of contours

(manats)

CIS and Baltic countries

2250 AZM (0,45 AZN)

60

37,5 AZM (0,01 AZN)

Iran, Turkey

4500 AZM (0,90 AZN)

60

75 AZM (0,02 AZN)

European countries

5400 AZM (1,08 AZN)

60

90 AZM (0,02 AZN)

USA and other countries

7200 AZM (1,44 AZN)

60

120 AZM (0,02 AZN)

For instance, from January to September 2005 the amount of incoming traffic from foreign countries as compared to the same period of 2004 grew 23%, or 36.05 million minutes and comprised 190.91 million minutes. The amount of outgoing traffic, which is considerably lower than in the incoming, rose 10.42 million minutes, 27%, and made up 48.57 million minutes.

While considering the changes to tariffs the Communications Ministry also considered opportunities for application of limit on local calls, however, with respect to technical issues increase of subscription fees for local calls was regarded as more expedient.

Ho expedient does it seem to increase the subscription fees for local calls and how it could affect on the financial status of the low-income families?

The minister stressed his support to tariff changes offered in the second packet. Why a subscriber should pay for international services, when he does not need it at all?

It take into consideration the fact Azerbaijan is not comprised of only young able people and successful businessmen, rise in tariffs might lead to the situation when the people will be deprived of use of the most significant invention of the millennium. Besides, the poverty level in Azerbaijan was 40.2% in 2004. So, what then the low-income population should do if the Tariff Council asserts the first packet of proposals?

The notable fact of the last few years is the comparable increase of the quality of communications, including the opening of new electron ATEs, post units, implementation of different projects in the sphere of ICT with support from the government and the international organization, application of the new services, development of cooperation with different countries in the communications sector, active participation of Azerbaijan in the international conferences, summits and in particular, the adoption of state program on the development of information-communications technologies in 2005-2008 by the President on 21 October 2005, which reflects all priorities and major direction of development in the communications sector in Azerbaijan.

According to Baku Telephone Communications Production Association of the Ministry, the level of transference to electron system comprises 74% and by mid-2006 the process will come to an end. In January to November 2005 the Ministry of Communications and Information Technologies invested 125.3bn manats in the telecommunications sphere. The funds were directed at the reconstruction of the communications facilities, construction of new telephone lines in the outskirts Baku and in the regions of Azerbaijan. In this period Aztelekom invested 62.9bn manats in the development of the communications sector, Baki Telefon Rabitasi - 41.7m manats, Teleradio 10.7bn manats and Azerpocta 5.6bn manats.

Most experts note, the sphere of information technologies in Azerbaijan is the most profitable field of non-oil sector, as the rise in the IT companies testifies. According to the Analytical Center of Information Policy, at present Azerbaijan has over 200 companies active in the sphere of information and communications technologies, including 22 provider companies. The figure in 1997 exceeded 40m in 1998 - some 50, in 1999 - 55, in 2000 over 70. It notable that in 2005 Azerbaijan succeeded to overcome a critical barrier of 5% of active internet users (over 460,000) of the total amount of the country.

Despite the achievements, the sphere still needs the implementation of projects and reforms. Though the Ministry said that Azerbaijan ranked the level of Russia and Estonia for the rise in the communications sector, the quality of services rendered, the IT sphere yet does not meet the international standards. The most disappointing fact in this direction is the absence of qualified specialists. The issue seems to find its resolution with the establishment of the Unified of Information Technologies. At present the work over the development of a draft platform on the establishment of the university jointly with the specialists of the Swiss IT University, which is interested in the corporation with Azerbaijan in the establishment of such an institution.

There is more significant project this is the project of the World Bank (WB) on the development of financial services major component of which is the improvement of the post service in Azerbaijan. The project was sanctioned on 14 October 2005 and the initial sum of the credit has been issued. After its implementation Azerpocht state enterprise of the Communications Ministry will receive a relevant status and will be included in the national payment system on the implementation of the financial and banking services.

Recalling the earlier mentioned changes in tariffs, we should note that at present the Tariff Council is considering proposals and it is planned to set up discussion shortly in this respect with the official of the Communications Ministry. The Ministry said that the issue will be resolved mo later than January 2006. Lets hope that the resolution to come optimal and expedient and the people to be satisfied with the level of services while paying the subscription fees.

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