Telecoms, Mobile, Broadband and Forecasts - Azerbaijan
As Azerbaijan looks to set up an independent regulator, mobile broadband rapidly expands
Coming into 2014 Azerbaijan's mobile subscriber numbers had passed the 10 million milestone (107% penetration). After more than a decade of very strong growth, the rate of expansion had moderated somewhat. Operator Azercell continues to lead the market, but its earlier dominance was being slowly eroded and market share had fallen to around 42%, down from the more than 50% it held in years past. The second and third ranked operators, Bakcell (30%) and relative newcomer Azerfon (23%) were both throwing out a challenge to Azercell's number one ranking.
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 positive fixed-line penetration of 19% by the start of 2014 and growth was continuing along a reasonable path. Around 80% of the fixed lines are in urban areas, despite 50% of the population living in rural areas. Government-owned Aztelekom has long been the country's main provider of basic telephone services, being directly controlled by the ministry.
In the meantime, the number of internet users in the country, having increased by 100% between 2008 and 2010, had passed 5 million in 2012. Fixed broadband subscriptions had increased from 100,000 in 2009 to 1.3 million in 2012 and strong growth was continuing. In the meantime, mobile broadband had rocketed from just 19,000 in 2009 to 4.1 million by end-2013.
Azerbaijan put its first telecommunications satellite into orbit in 2013. The Azerspace-1 satellite was set to provide communications coverage for Azerbaijan, Central Asia, Europe and Africa over a designed 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 2018.
On the back of a strong economy, Azerbaijan has made good progress in the building of its telecommunications and information technology sectors. It has had to overcome 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 and Information Technologies (MCIT).
A substantial platform for the ongoing development of Azerbaijan's telecom sector was put in place more than a decade ago. By 2001 there were four joint-ventures offering telephone services, two mobile operators, and a number of Internet Service Providers (ISPs) in the country. All these ventures, established under the MCIT, 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.
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. In 2012/2013, however, there were all the signs of a recovery, as the country adjusted to the global realities. The IMF forecast growth of 5% in 2014. Most certainly the telecom sector was continuing to grow.
The Mobile market in Azerbaijan, having passed the 100% milestone in 2011, continues to grow into 2014 but at a more modest annual rate;
With over 10 million mobile subscribers by end-2013, 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; the other two, Bakcell and Azerfon, were both competing vigorously;
Bakcell was running a strong second with over 30% market share, while relative newcomer Azerfon was in third place on 23%;
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 a little over 19% coming into 2014;
The evidence suggests plenty of strong growth in Azerbaijan's internet usage;
Mobile broadband had rocketed from just 19,000 in 2009 to 4.1 million by end-2013;
The country's first satellite, Azerspace-1, was successfully launched into orbit in 2013;
After long delays, the MNP scheme was introduced by the mobile operators in February 2014;
The government announced that it was preparing to restructure the communications ministry, with a new Ministry of Communications and High Technology (MCHT) being created in 2014;
Azerbaijan has initiated a long-term e-government project;
The country was generally making good progress in implementing its plans to privatise state-owned telecom enterprises; however, the critical privatisation of Aztelekom had again been postponed - for some years.
Companies covered in this report include:
Aztelekom; AzEuroTel; Azercell; Bakcell; Azerfon; Catel: Eurasiacom
Azerbaijan - key telecom parameters 2012 - 2014
Category | 2012 | 2013 | 2014 (e)
Fixed-line services: | | |
Total No. of subscribers | 1.72 million | 1.76 million | 1.82 million
Internet services: | | |
Total No. of fixed internet subscribers (e) | 1.70 million | 1.90 million | 2.20 million
Mobile services: | | |
Total No. of subscribers | 10.1 million | 10.1 million | 11.0 million
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 (fixed and mobile);
Scenario forecasts for fixed-line, internet and mobile subscribers for 2015, 2020.