Azerbaijan - Telecoms, Mobile and Broadband

Azerbaijan - Telecoms, Mobile and Broadband

Code: BC2016-118 | Published: May-2016 | Pages: 49 | Budde Communication Pty Ltd
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Executive summary
Azerbaijans telecom sector continuing on a steady pathComing into 2016 Azerbaijans mobile subscriber base had passed 10 million and mobile penetration was over 110percent. After a period in which annual growth rates had been around 50percent, mobile subscriber growth had moderated to fall to around 5percent 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 40percent, down from more than 50percent in years past. The second and third ranked operators, Bakcell (33percent) and Azerfon (25percent) were both throwing out challenges to Azercells 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 countrys 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 20percent by the start of 2016. Just over 80percent of fixed lines are in urban areas, however, despite 50percent 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 63percent. 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 15percent.
The government has announced that the countrys 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 countrys 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 30percent 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 Azerbaijans oil and gas exports; real GDP grew by just 0.1percent 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 countrys GDP growth. Growth has been fluctuating. In 2015 was forecast by the IMF at less than 1percent, but came in at 4percent.
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 Internationals 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 40percent 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 20percent coming into 2016;
Azerbaijans internet usage was expanding quickly;
mobile broadband subscribers had rocketed from just 19,000 in 2009 to around 5 million in 2015;
the countrys 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 governments 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);

Table of Contents

1. Executive summary
2. Key statistics
3. Country overview
3.1 Background
3.2 Economy
3.2.1 World Trade Organization (WTO)
4. Azerbaijans 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 Forecasts - fixed-line subscribers - 2016; 2018; 2021
7.4 Next Generation Network (NGN)
7.5 Optical fibre network
7.6 National Broadband Network
7.7 International infrastructure
7.7.1 Background
7.7.2 Azerbaijans satellites
7.7.3 Trans-Asia-Europe (TAE) cable network
7.7.4 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 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 Developments
11.1.3 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
11.5 Delta Telecom
12. Broadcasting and digital media
13. Notes on forecasting
14. Related reports
Table 1 - Country statistics Azerbaijan - 2015
Table 2 - Telephone network statistics - 2015
Table 3 - Internet user statistics - 2015
Table 4 - Mobile statistics - 2015
Table 5 - National telecommunications authority
Table 6 - Azerbaijans GDP real growth rate - 2006 - 2017
Table 7 -Foreign investment in Azerbaijans 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 - 2015
Table 10 - Forecast fixed-line subscribers - 2016; 2018; 2021
Table 11 - Historical - Internet users, annual growth and penetration - 1995 - 2004
Table 12 - Internet users, annual growth and penetration - 2005 - 2015
Table 13 - Historical - Internet subscribers - 1997 - 2004
Table 14 - Fixed internet subscribers and penetration - 2005 - 2015
Table 15 - Internet access by household - 2002 - 2015
Table 16 - Internet bandwidth capacity - 2001 - 2015
Table 17 - Fixed broadband subscribers and penetration - 2003 - 2015
Table 18 - Fixed broadband subscribers and household overview - 2015
Table 19 - DSL broadband subscribers - 2005 - 2015
Table 20 - Historical - BTRIB (BakTelekom) DSL subscribers - 2005 - 2011
Table 21 - FttX broadband subscribers - 2005 - 2015
Table 22 - Wireless broadband subscribers and penetration - 2009 - 2015
Table 23 - Mobile broadband subscribers and penetration - 2009 - 2015
Table 24 - Forecast fixed broadband subscribers - 2016; 2018; 2021
Table 25 - Historical - Mobile subscribers, annual growth and penetration - 1994 - 2004
Table 26 - Mobile subscribers, annual growth and penetration - 2005 - 2016
Table 27 - Mobile operators, subscribers and annual change - 2015
Table 28 - Mobile operators by share of total mobile market - 2015
Table 29 - Prepaid mobile subscribers - 2005 - 2015
Table 30 - Mobile SMS volume - 2008 - 2015
Table 31 - Mobile broadband subscribers - proportion of total mobile subscribers - 2009 - 2015
Table 32 - Forecasts - mobile subscribers - 2016; 2018; 2021
Table 33 - Azercell mobile subscribers and market share - 2003 - 2015
Table 34 - Bakcell mobile subscribers - 2002; 2005 - 2006; 2010 - 2015
Table 35 - Azerfon mobile subscribers - 2007 - 2015
Table 36 - Key broadcasting statistics - 2015
Table 37 - DTH subscribers - 2001 - 2003; 2010 - 2015
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 - 2016
Chart 6 - Mobile operators by share of total mobile market - 2015

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