Azerbaijan - Telecoms, Mobile, Broadband and Forecasts Executive summary
Azerbaijan's ‘economic dynamism' is driving its telecommunications sector
Coming into 2010 Azerbaijan's mobile subscriber base was approaching 8 million (90% penetration). Mobile subscriber growth had moderated to a still healthy 20% in 2009, down from almost 50% in 2008. Operator Azercell continues to command a major share of the market (around 60%), but this dominance was being slowly eroded.
Although the fixed network provides good national coverage, there was little sign of a growth surge in this market; but the country could still claim a fixed-line penetration of just under 16% by end-2009 and growth was continuing along a modest path in 2010.
In the meantime, the number of Internet users, having increased by 50% in 2009, had reached 3.7 million, while broadband subscriptions increased to 100,000 by end-2009, according to International Telecommunications Union figures; this was up from 15,000 just two years earlier.
On the back of a dynamic economy, Azerbaijan has been making healthy progress in the building of its telecommunications and information technology sectors. In has confronted a number of major problems in the process, including:
poor telecom infrastructure inherited from the past;
low public awareness and understanding of computer technology;
the high cost of computer equipment in comparison to the average salary;
very high tariffs for satellite connections due to a monopoly held by the Ministry of Communications & Information Technologies.A substantial platform for the ongoing development of Azerbaijan's telecom sector had been put in place by 2001. By that stage there were four joint-ventures offering telephone services, two mobile operators, and a number of Internet Service Providers in the country. All these ventures, established under the Ministry of Communications & Information Technologies, were providing a range of basic telephone services, including mobile services. Prices varied considerably depending on the different cost of services offered to these companies by the ministry.
Government-owned Aztelekom has been the country's main telecom service provider, being directly controlled by the Ministry of Communications & Information Technologies. A second operator, AzEuroTel, won a licence to provide international communication services as long ago as 1999.
The expansion of the country's telecom sector has been taking place in the context of a very strong developing economy. Azerbaijan has experienced rapid economic expansion in recent times, recording annual GDP growth levels of up to 30% a few years back. This has seen it rank as one of the fastest growing economies in the world. In fact, in Newsweek magazine's ranking of low income economies by Economic Dynamism published in August 2010, saw Azerbaijan in second place, behind China and ahead of India.
By early 2010 mobile penetration in Azerbaijan had reached 90%, with mobile subscriber numbers having increased almost fourfold in just over four years;
The country had seen solid overall growth in its mobile subscriber base, running at an annual rate of just below 20% coming into 2009;
With two additional operators, Azerfon and Catel, having joined Azercell and Bakcell in the mobile market in 2007, competition was hotting up with a consequent battle for market share;
Fixed-line penetration in Azerbaijan had reached a healthy 15% by 2009, but further growth was slow;
The country has moved closer to 100% conversion of the fixed network from analogue, with over 90% digital by 2009, up from just 48% in 2003;
All the signs suggest strong growth in Azerbaijan's Internet usage; with user penetration reported at more than 17% at the start of 2009, this had jumped to 25% by year end;
Broadband Internet subscriptions were growing strongly, increasing from 15,000 in 2007 to 100,000 in 2009; however, this still only represented a broadband penetration of slightly over 1%;
The country has made good progress in the privatising of state-owned telecom enterprises; however, the critical privatisation of Aztelekom had again been postponed - for some years.Azerbaijan - key telecom parameters - 2009 - 2010
Total number of subscribers1.40 million1.45 million
Fixed-line penetration (population)15.8%16.3%
Total number of subscribers521,500750,000
Internet subscriber penetration (population)6%8%
Total number of subscribers7.7 million8.8 million
Mobile penetration (population)88%97%
This report provides an overview of the trends and developments in the telecommunications markets in Azerbaijan. Subjects covered include:
Market and Industry Overviews;
Major Operators (Mobile and Fixed);
Mobile Market - Voice and Data;
Internet Market, including Broadband. Last Update: 16 Sep 2010 Number of Pages: 26