 Azerbaijan: Telecoms and technology background
FROM THE ECONOMIST INTELLIGENCE UNIT
The telecommunications infrastructure in Azerbaijan is poorly developed, but is attracting substantial investment, amounting to an estimated US$500m by late 2005. Nevertheless, substantial legal, regulatory and institutional obstacles impede the development of the sector and only limited competition is allowed.
The number of telephone lines remains extremely low, at 12.8 per 100 people in mid-2005. The state-owned telecoms enterprise, Aztelecom, has a monopoly on fixed-line telephony (voice and data), as well as on a broad range of other telecoms services. Although the government is in theory committed to privatising Aztelecom, it has said that this is unlikely to happen before 2008.
Mobile telephony is more developed—in part owing to the weak state of fixed-line services—with an estimated 1.8m subscribers by October 2005, up from zero in 1993.
Azerbaijan has the Global System for Mobile Communications (GSM) telephone system, which uses digital radio transmissions to provide voice and data services. The government has started to privatise the sector, although it has retained strategic stakes in key companies. There are two cellular telephony providers, both of which are partly owned by the Ministry of Communications and Information Technology.
Internet use is relatively low and is heavily concentrated in a few urban centres, where the majority of Azerbaijan's skilled and better-educated population lives. The country came last among 65 countries worldwide in the Economist Intelligence Unit’s e-readiness rankings for 2005. The ratings assess a number of factors, ranging from the quality of the information technology (IT) infrastructure to the ambition of government initiatives and the degree to which the Internet creates real commercial efficiencies.
The poor ranking is mainly because Internet service providers (ISPs) operate under a number of restrictions, including content control laws, which limit the potential for web-hosting services.
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SOURCE: The Economist Intelligence Unit
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