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Azerbaijan - Telecoms, Mobile and Broadband


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Azerbaijan - Telecoms, Mobile and Broadband

Azerbaijan still waiting for an independent regulator

Coming into 2015 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% or less 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 40%, down from more than 50% in years past. The second and third ranked operators, Bakcell (30%) and relative newcomer Azerfon (23%) were both throwing out challenges to Azercell's market share if not its number one ranking.

Although the country's fixed network provides good national coverage, there was little sign of any striking growth happening in this segment of the market; but Azerbaijan could still claim a positive fixed-line penetration of just over 19% by the start of 2015 and growth was continuing along a reasonable path. Just over 80% of fixed lines are in urban areas, despite 50% of the population living in rural areas.

In the meantime, the number of internet users in the country, having increased by 100% between 2008 and 2010, had reached almost 6 million coming into 2015 for a user penetration of over 60%. Fixed broadband subscriptions had increased from just 100,000 in 2009 to more than two million into 2015 and strong growth was continuing. Mobile broadband had rocketed from just 19,000 in 2009 to 4.5 million by end-2014. Into 2015, the number of mobile broadband subscribers was growing at an annual rate of around 10%.

In a significant move for the country, Azerbaijan put its first telecommunications satellite into orbit in 2013. The Azerspace-1 satellite was designed to provide communications coverage for Azerbaijan, Central Asia, Europe and Africa over a mission life of 15 years. It was set to provide digital broadcasting, internet access and data transmission, among other services. The government subsequently announced that Azerspace-2, the country's second telecommunications satellite, would be launched in 2017/2018.

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 in recent times, 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 in 2015 was forecast by the IMF at less than 1%. IMF estimates for 2016/2017 were around 2.5%

Key developments:

after a period of rapid expansion, into 2015 the mobile market in Azerbaijan was continuing to grow but at a more modest annual rate;
with 10.5 million mobile subscribers by 2014, the total numbers had increased fivefold since 2005;
of the three major mobile operators Azercell remained the clear market leader with 40% of the subscriber base; the other two, Bakcell and Azerfon, were both competing vigorously;
significantly, Azerfon had been awarded a 3G licence in 2009 and remained the sole 3G operator in the country until end-2011;
Bakcell and Azercell were eventually granted 3G licences, both launching 3G services in 2012;
as the fixed-line market slowed, penetration was about 19% coming into 2015;
there was plenty of strong growth in Azerbaijan's internet usage;
mobile broadband had rocketed from just 19,000 in 2009 to around 5 million in early 2015;
the country's first satellite, Azerspace-1, was successfully launched into orbit in 2013 and Azerspace-2 was planned for early 2018;
Azercosmos and Intelsat announced a strategic agreement for the 45 degrees East orbital position;
after long delays, in 2014 the MNP scheme was introduced by the MCHT in cooperation with the mobile operators;
Azerbaijan had initiated a long-term e-government project and was making good progress on implementation;
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.

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 Overview
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 Legislation
5.4 Privatisation plans
5.5 National Communication Technologies Strategy
5.6 Promotion of ICT sector
5.7 Regulatory developments
5.7.1 Mobile Number Portability (MNP)
5.7.2 Fixed Number Portability (FNP)
5.7.3 Beeline allegedly operating in Karabakh
5.7.4 Use of 800MHz for 4G/LTE
5.7.5 2G to be abandoned by 2017
6. Fixed network operators in Azerbaijan
6.1 Overview
6.2 Aztelekom
6.3 AzEuroTel
6.4 EurAsiaCom (formerly Terracom Inc/Fire Telecom)
6.5 BakTelekom (also known as BTRIB)
7. Telecommunications infrastructure
7.1 National telecom network
7.1.1 Fixed-line statistics
7.1.2 Forecasts fixed-line subscribers 2015; 2017; 2020
7.1.3 Next Generation Network (NGN)
7.1.4 Optical fibre networks
7.1.5 National Broadband Network
7.2 International infrastructure
7.2.1 Azerbaijan's satellites
7.2.2 Trans-Asia-Europe (TAE) cable network
7.2.3 Europe Persia Express Gateway (EPEG)
8. Internet market
8.1 Overview
8.2 Internet statistics
8.3 Forecasts fixed internet subscribers 2015; 2017; 2020
8.4 E-Education
8.5 Cybercrime
8.6 E-Government
8.7 ISP market
9. Broadband market
9.1 Overview
9.2 Broadband statistics
9.3 Trans-Eurasian Information Superhighway
9.4 WiMAX
9.4.1 AzQtel
10. Mobile communications
10.1 Overview of Azerbaijan's mobile market
10.1.1 Nakhichevan enclave
10.1.2 Handsets
10.2 Mobile statistics
10.3 Forecasts mobile market 2015; 2017; 2020
10.4 Mobile Number Portability (MNP)
10.5 Mobile technologies
10.5.1 Trunk Mobile Radio (TMR)
10.5.2 Third Generation (3G) services
10.5.3 Fourth Generation (4G) / Long Term Evolution (LTE)
10.5.4 Voice-over-LTE (VoLTE)
11. Major mobile operators
11.1 Azercell
11.1.1 Overview
11.1.2 Background
11.2 Bakcell
11.2.1 Overview
11.2.2 Background
11.3 Azerfon (Nar Mobile)
11.3.1 Overview
11.3.2 Corporate structure
11.3.3 Background
11.4 Catel
12. Broadcasting and digital media
13. Notes on forecasting
14. Related reports
Table 1 Country statistics Azerbaijan 2015
Table 2 Telecom revenue and investment statistics 2012
Table 3 Telephone network statistics 2014
Table 4 Internet user statistics 2014
Table 5 Mobile statistics 2014
Table 6 National telecommunications authority
Table 7 Azerbaijan's GDP real growth rate 2006 - 2017
Table 8 Foreign investment in Azerbaijan's telecom sector 2006 - 2014
Table 9 Historical - Fixed lines in service, annual growth and teledensity 1995 - 2004
Table 10 Fixed lines in service, annual growth and teledensity 2005 - 2015
Table 11 Forecast fixed-line subscribers 2015; 2017; 2020
Table 12 Historical - Internet users, annual growth and penetration 1995 - 2004
Table 13 Internet users, annual growth and penetration 2005 - 2015
Table 14 Historical - Internet subscribers 1997 - 2004
Table 15 Fixed internet subscribers and penetration 2005 - 2015
Table 16 Internet access by household 2002 - 2015
Table 17 Internet bandwidth capacity 2001 - 2014
Table 18 Forecast fixed internet subscribers 2015; 2017; 2020
Table 19 Fixed broadband subscribers and penetration 2003 - 2015
Table 20 Fixed broadband subscribers and household overview 2014
Table 21 DSL broadband subscribers 2005 - 2014
Table 22 BTRIB (BakTelekom) DSL subscribers 2005 - 2011
Table 23 FttX broadband subscribers 2005 - 2014
Table 24 Wireless broadband subscribers and penetration 2009 - 2015
Table 25 Mobile broadband subscribers and penetration 2009 - 2015
Table 26 Historical - Mobile subscribers, annual growth and penetration 1994 - 2004
Table 27 Mobile subscribers, annual growth and penetration 2005 - 2015
Table 28 Mobile operators, subscribers and annual change September 2014
Table 29 Mobile operators by share of total mobile market September 2013
Table 30 Mobile operators by share of total mobile market September 2014
Table 31 Prepaid mobile subscribers 2005 2013
Table 32 Mobile SMS volume 2008 2013
Table 33 Forecasts - mobile subscribers 2015; 2017; 2020
Table 34 Azercell mobile subscribers and market share 2003 - 2015
Table 35 Bakcell mobile subscribers 2002; 2005 2006; 2010 - 2014
Table 36 Azerfon mobile subscribers 2007 - 2014
Table 37 Key broadcasting statistics - 2014
Table 38 DTH subscribers 2001 2003; 2010 2014
Chart 1 Fixed lines in service, annual change and teledensity 2005 2015
Chart 2 - Internet users, annual change and penetration - 2005 2015
Chart 3 - Fixed internet subscribers and penetration - 2005 2015
Chart 4 - Fixed broadband subscribers and penetration 2007 - 2015
Chart 5 - Mobile subscribers, annual change and penetration - 2005 2015
Chart 6 - Mobile operators by share of total mobile market 2013

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