Azerbaijan - Telecoms, Mobile and Broadband

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Azerbaijan - Telecoms, Mobile and Broadband

Azerbaijan's telecom sector continuing on a steady path

Coming into 2016 Azerbaijan's mobile subscriber base had passed 10 million and mobile penetration was over 110%. After a period in which annual growth rates had been around 50%, mobile subscriber growth had moderated to fall to around 5% in recent years. This pattern looked likely to continue in the short term. Operator Azercell maintained its position as market leader, but its earlier dominance was being slowly eroded and market share had eased back to around 40%, down from more than 50% in years past. The second and third ranked operators, Bakcell (33%) and Azerfon (25%) were both throwing out challenges to Azercell's market share if not its number one ranking. (Note: There are some inconsistencies in the available subscriber statistics for Azerbaijan, but the overall trend appears evident.)

The country's fixed-line network provides good national coverage and subscriber numbers are still expanding at a modest rate (contrary to the pattern in other regional markets). Azerbaijan was claiming a positive fixed-line penetration of almost 20% by the start of 2016. Just over 80% of fixed lines are in urban areas, however, despite 50% of the population living in rural areas.

In the meantime, the number of internet users in the country had passed the 6 million mark by early 2016 with an internet user penetration of about 63%. Fixed broadband subscriptions had increased from just 100,000 in 2009 to more than two million and strong growth was continuing. Mobile broadband had rocketed from just 19,000 in 2009 to 6.4 million by end-2015. Into 2016, the number of mobile broadband subscribers was growing at an annual rate of around 15%.

The government has announced that the country's second telecommunications satellite, Azerspace-2, was to be launched by 2018. Earlier, Azerbaijan had put its first telecommunications satellite into orbit. The Azerspace-1 satellite was providing communications coverage for Azerbaijan, Central Asia, Europe and Africa with a mission life of 15 years. Its service offerings included digital broadcasting, internet access and data transmission, among others.

The expansion of the country's telecom sector has taken place in the context of a very strong developing economy. Azerbaijan has seen rapid economic expansion, recording annual GDP growth levels of up to 30% a few years back. However, the economy suffered a major setback following the Global Financial Crisis (GFC). The poor state of the global economy saw a big drop in Azerbaijan's oil and gas exports; real GDP grew by just 0.1% in 2011. Since then there have been signs of a patchy recovery as the country adjusted to the global realities. The anticipated slower expansion in oil production was acting as a considerable drag on the country's GDP growth. Growth has been fluctuating. In 2015 was forecast by the IMF at less than 1%, but came in at 4%.

Apart from the economy the other major issue hanging over the telecom sector involves the corrupt business practices that prevail in the local industry. Companies linked to the family of the President Aliyev have been playing a significant role in telecoms that has been cause for concern. Transparency International's Corruption Perceptions Index (2015) for Azerbaijan was 29 out of 100 ranking it 119 out of 168 countries rated.

Key developments:

after a period of rapid expansion, the mobile market in Azerbaijan was continuing to grow coming into 2016, but at a more modest annual rate;

with around 11 million mobile subscribers by 2015, the total numbers had increased fivefold since 2005;

of the three major mobile operators Azercell remained the clear market leader with over 40% of the subscriber base;

Azerfon planned to introduce LTE-Advanced (LTE-A) technology in 2016.

ISP Delta Telecom was replacing its WiMAX network with LTE technology, setting the scene for Delta to become a new mobile operator;

as the fixed-line market slowed, penetration was close to 20% coming into 2016;

Azerbaijan's internet usage was expanding quickly;

mobile broadband subscribers had rocketed from just 19,000 in 2009 to around 5 million in 2015;

the country's first satellite, Azerspace-1, was put into orbit in 2013;

Azerspace-2 was planned for 2018;

an MNP scheme was introduced by the MCHT in cooperation with the mobile operators in 2014;

Azerbaijan having initiated an e-government project, implementation was reported to be making good progress;

the privatising of state-owned telecom enterprises remained on the government's agenda, with a new strategy announced in 2015 for the critical privatisation of Aztelekom;

although he ministry had reported in 2014 that the setting up of an independent telecommunications regulator, .by 2016 there was no sign of the government moving on this;

mobile operator Azerfon has acquired ISP CityNet to expand its commercial reach.

Companies mentioned in this report:

Aztelekom; AzEuroTel; Azercell; Bakcell; Azerfon; Catel; BakTelekom (BTRIB); Eurasiacom; Fintur; Vimpelcom (Beeline);

1. Executive summary
2. Key statistics
3. Country overview
3.1 Background
3.2 Economy
3.2.1 World Trade Organization (WTO)
4. Azerbaijan's telecommunications market
4.1 Market Overview and Analysis
4.2 Foreign investment
4.3 Ministry report on outcomes July 2014
4.4 Action Plan for 2011-2015
5. Regulatory environment
5.1 Ministry of Communications and High Technology (MCHT)
5.2 Proposed telecom regulator
5.3 Privatisation plans
5.4 Promotion of ICT sector
5.5 Regulatory developments
5.5.1 Mobile Number Portability (MNP)
5.5.2 Fixed Number Portability (FNP)
5.5.3 Beeline allegedly operating in Karabakh
5.5.4 Use of 800MHz for 4G/LTE
5.5.5 2G to be abandoned' by 2017
6. Fixed network operators in Azerbaijan
6.1 Overview
6.2 Aztelekom
6.3 AzEuroTel
6.4 BakTelekom (also known as BTRIB)
7. Telecommunications infrastructure
7.1 Market Overview and Analysis
7.2 Fixed-line statistics
7.3 Next Generation Network (NGN)
7.4 Optical fibre network
7.5 National Broadband Network
7.6 International infrastructure
7.6.1 Background
7.6.2 Azerbaijan's satellites
7.6.3 Trans-Asia-Europe (TAE) cable network
7.6.4 Europe Persia Express Gateway (EPEG)
8. Fixed internet and broadband market
8.1 Market overview and analysis
8.2 Broadband statistics
8.3 Forecasts fixed broadband subscribers 2015; 2017; 2020
8.4 Broadband infrastructure
8.4.1 Trans-Eurasian Information Superhighway (TASIM)
8.4.2 WiMAX
8.5 Internet Service Provider (ISP) market
8.5.1 Nar CityNet
8.5.2 Delta Telecom
8.5.3 AzQtel
9. Digital economy
9.1 E-Education
9.2 Cybercrime
9.3 E-Government
9.4 AzDATACOM network project
10. Mobile communications
10.1 Market Overview and Analysis
10.1.1 Nakhichevan enclave
10.2 Mobile statistics
10.3 Mobile Broadband
10.4 Forecasts mobile market 2016; 2018; 2021
10.5 Mobile Number Portability (MNP)
10.6 Mobile technologies
10.6.1 Trunk Mobile Radio (TMR)
10.6.2 Third Generation (3G) services
10.6.3 Fourth Generation (4G) / Long Term Evolution (LTE)
10.6.4 Voice-over-LTE (VoLTE)
11. Major mobile operators
11.1 Operator Statistics
11.2 Azercell
11.2.1 Overview
11.2.2 Developments
11.2.3 Background
11.3 Bakcell
11.3.1 Overview
11.3.2 Background
11.4 Azerfon (Nar Mobile)
11.4.1 Overview
11.4.2 Corporate structure
11.4.3 Background
11.5 Catel
11.6 Delta Telecom
12. Broadcasting and digital media
13. Notes on forecasting
14. Related reports
Table 1 Country statistics Azerbaijan 2016
Table 2 Telephone network statistics 2016
Table 3 Internet user and broadband statistics 2016
Table 4 Mobile statistics 2016
Table 5 National telecommunications authority
Table 6 Azerbaijan's GDP real growth rate 2006 - 2017
Table 7 Foreign investment in Azerbaijan's telecom sector 2006 - 2015
Table 8 Historical - Fixed lines in service, annual growth and teledensity 1995 - 2004
Table 9 Fixed lines in service, annual growth and teledensity 2005 - 2016
Table 10 Historical - Internet users and penetration 1995 - 2004
Table 11 Internet users and penetration 2005 - 2016
Table 12 Historical - Internet subscribers 1997 - 2004
Table 13 Internet access by household 2002 - 2016
Table 14 Internet bandwidth capacity 2001 - 2016
Table 15 Fixed broadband subscribers and penetration 2003 2016
Table 16 DSL broadband subscribers 2005 - 2015
Table 17 FttX broadband subscribers 2005 - 2015
Table 18 Forecast fixed broadband subscribers and penetration 2016; 2018; 2021
Table 19 Historical - Mobile subscribers, annual growth and penetration 1994 - 2004
Table 20 Mobile subscribers, annual growth and penetration 2005 - 2016
Table 21 Mobile broadband subscribers and penetration 2009 - 2016
Table 22 Forecast mobile subscribers and penetration 2016; 2018; 2021
Table 23 Mobile operators and systems 2016
Table 24 Mobile operators Subscribers and market share 2016
Table 25 Azercell mobile subscribers 2003 - 2016
Table 26 Bakcell mobile subscribers 2002; 2005 2006; 2010 - 2016
Table 27 Azerfon mobile subscribers 2007 - 2016
Table 28 Key broadcasting statistics
Table 29 DTH subscribers 2001 2003; 2010 2015
Chart 1 Fixed lines in service and penetration 2005 2016
Chart 2 - Fixed broadband subscribers and penetration 2007 - 2016
Chart 3 - Mobile subscribers, annual change and penetration - 2005 2016

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