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The year 2013 declared Year of Information and Communications Tech-nologies (ICT) by Azerbaijani President Ilham Aliyev can be regarded as an overall success in terms of the sector's development. This progress is based on achievements in priority areas outlined by the National Strategy for ICT Development approved in 2003 and state programmes. Projects of local and regional importance are being carried out to achieve assigned objectives.

Ali ABBASOV, Azerbaijan's Minister of Communications and Information Technologies, has told in an interview to R+ about the results of the work done and development prospects for this sector.  

- What is your assessment of the development pace in Azerbaijan's ICT sector? What results have been achieved over the past year in this area?

- The ICT sector of Azerbaijan provides favourable conditions and broad investing opportunities. The ICT sector's revenues over the three quarters of the current year totalled 1,196.8m manats which is an increase of 10.5 per cent on the same period in 2012. This sector is expected approximately to quadruple its volume over the next seven years. Specific tasks have been identified and expected growth rates are quite reassuring.

Thus in keeping with the action plan approved for the current year and being carried out by units of the Ministry of Communications and Information Technologies (MCIT) efforts have been taken to put Azerbaijan's first telecommunications satellite Azerspace-1 into orbit, to organize the activity of the State Fund for ICT Development, the Hi Tech Park, the Centre for Information Security and IT University, to expand the number of e-services and digital TV coverage etc.

The implementation of these projects and other efforts within subprogrammes will ensure, in the near future, the use of ICT in society, pubic administration and all economic sectors; the ICT infrastructure and local manufacture of IT will get a boost for development and the sector will increase its export potential. 

- The beginning of 2013 was marked with the launch of Azerbaijan's first telecommunications satellite - Azerspace-1. Getting a new source of income is very important for Azerbaijan in terms of re-channelling oil revenues towards the development of other economic sectors. How much has this grandiose project justified itself from this point of view?

- The orbiting of the Azerspace/Africasat-1 satellite is the result of Azerbaijan's successful economic and political development and a historic event for this country.  The satellite controlled from the main and a back-up control centres is designed to provide digital TV and radio broadcasting services, access to the Internet, data transmission, creating multiservice VSAT networks and government communications.

By joining the space club Azerbaijan is further strengthening its leadership positions in the region. The launch of the satellite will affect our citizens' everyday life. First and foremost, it will provide the conditions to offer them higher quality electronic services, high speed Internet and quality TV and radio services. The resources of the Azerspace/Africasat-1 satellite will be used to ensure secure information exchange and management in projects such as the construction of the Baku-Tbilisi-Ceyhan and other oil pipelines meant to supply energy to Europe.

As for the commercial component of the project, it has started bringing revenues and their volume is expected to total about 10m dollars. Currently more than 50 per cent of the satellite's resources have been harnessed to transmit about 60 TV channels, eight of which are local. Its resources are being used by telecommunications operators in North Africa, they are also used to provide VSAT services and create a unified infrastructure for secure communications (secure data network) between geographically remote offices of international companies.

Future plans include launching the second telecommunications satellite Azerspace-2. It is planned to put it into orbit in 2018. The contract on this programme is the signing phase. Efforts are under way to prepare a project feasibility study, coordinate orbital slots, acquire a new orbital slot and then purchase procedures will start.  Apart from this, our immediate plans also include launching a low orbit satellite. A tender for its construction will be announced before the end of this year. Azerbaijan's satellite operator - the Azerkosmos open joint stock company - is drawing up a business plan on opportunities for using space-radar and optical images both in Azerbaijan and in the markets of the region's countries. Currently the company is working to create a multipurpose earth station to be used also for receiving satellite images from other satellites flying over this region. It is planned to complete work in this area before the end of the year.

- What is your assessment of the level of informatisation at state departments? A number of state bodies in Azerbaijan are already offering electronic services. What efforts do you think should be taken in Azerbaijan to make the transition to an e-government more dynamic?

- Active efforts are being taken in Azerbaijan to form an "electronic government". The process involves all central executive bodies and there are successfully implemented projects. The main goal of forming an "e-government" is to make the activity of government bodies more efficient and transparent and to provide the population, business and public organizations with more accessible and convenient methods for communication with state bodies and their active involvement in state administration processes.

The introduction of an "electronic government" means above all increasing the efficiency of the entire state system, essentially reducing the time needed to obtain required information, cooperation with other agencies, making the work of state structures more efficient, reducing red tape and potentially reducing the amount of routine day-to-day work.

The electronic services of Azerbaijan's state institutions are concentrated on the Electronic Government data portal (e-gov.az) which is called to reduce the number of documents requested from citizens by enhancing electronic cooperation between different bodies. Access to the website is effected by the use of an electronic digital signature, identification data on private entrepreneurs and citizens, verification data (login and password) and a mobile authentication system that become available in an electronic form upon registration on the  portal. The total number of electronic digital signatures issued in Azerbaijan as from 1 November exceeded 16,400 which is seven times more than were registered at the beginning of the year.

Some 40 central bodies of executive power are connected to the portal. Now a new state programme has been drawn up to develop "electronic government" under which local executive bodies are to be connected to the portal and deploy their e-services.  As of today, 426 electronic services have been approved and 272 of them are available on the portal. The total number of e-services available on the websites of Azerbaijani state institutions is 407.

- What efforts are being taken to develop the Internet in the republic? Is a new wave of tariff cuts expected for Internet services? 

- A new wave of tariff cuts for Internet services is expected in the nearest future. Recommendations to this effect have been received both from private and state Internet service providers. Finishing efforts to draw up a final proposal are in progress. In particular, it is suggested that channel rentals should be reduced for Internet providers and communications operators and this move must tell on the tariffs for Internet services provided for end users.

The Internet market of Azerbaijan has passed a quantitative barrier and is on the threshold of quality improvement. The main obstacle here is the prevalence of copper cable infrastructure which must be replaced with optical communications lines and this will largely solve the last-mile problems. 

The problem at issue in Azerbaijan's Internet market is to build up opportunities for the use of more capacious resources of the worldwide web, that is to achieve a minimum web access speed of 10 megabits per second instead of the current 2-3 megabits per second keeping the current prices unchanged.

The problem is to be solved under a project to develop broadband Internet in Azerbaijan (Optic into Home). It will be implemented with financial support from the State Oil Fund of Azerbaijan in 2014-2016. The final goal of the project is to provide high-speed Internet within 10-100 megabits per second throughout the country including out-of-the-way rural populated localities and increase the number of broadband Internet users to 85 per cent which will enable Azerbaijan to reach the level of advanced states of the world by 2017.

- The press and social networks have lately been discussing the likelihood of tariff rises for utility services. Is the ministry satisfied with the tariff rates for fixed telephone communications or should we expect changes in that matter?

- It is possible but not from the perspective you pointed out. Thus for instance we have prepared proposals for the Tariffs Council on the issue of reducing the prices for a number of telecommunications services including telephone communications and others. The central point in this issue is to improve the efficiency and security of communications networks including the launch of new services.

It is no secret that the amount of voice traffic over the public access telephone network is on the decline. This is happening because of users migrating to mobile networks and the growing popularity of broadband Internet where the online telephone service Skype has essentially increased the number of its users lately.

This trend is characteristic of many countries. Nonetheless, the declining revenues from the voice services of long-distance communications is set off by the growing number of users of the Internet with a variety of multimedia services offered on its basis.

The evolution of technologies makes operators seek new ways to keep their activity profitable. The era of conventional telephony is coming to a close. New technologies based of the IP protocol are coming to replace them and open up broad opportunities to receive all kinds of content.

- What measures is your department taking to introduce mobile number portability (MNP) service?

- The introduction of the mobile number portability service depends on the technical readiness of the operators' networks. The service must be launched simultaneously by all the three of Azerbaijan's mobile communications operators. We expect the mobile operators to settle this issue in the shortest term possible.

The use of MNP will create a new wave of competition in the mobile communications market of Azerbaijan.  Number portability, as is known, leads to a more active interchange of subscribers for whom it is very important to retain their number when they go over to another operator. This service increases competition and forces the operators to take additional efforts to retain their subscribers and attract new ones.

In general, despite the high mobile penetration in Azerbaijan, the market keeps growing; new products and services are being launched. Data transmission services are becoming important sources of incomes for operators and the number of connections is growing at a high rate. The HSPA+ and LTE standards will be the main technologies for mobile access to the Internet. The reason is the limited coverage radius of other wireless access technologies, such as Wi-Fi, for instance.  

According to forecasts, the number of mobile communications subscribers will increase in Azerbaijan by 17 per cent by the end of 2017. A growth rate of 5.7 per cent is predicted for 2014, 4.8 per cent for 2015, 2.9 per cent for 2016 and as much for 2017.  By the end of 2017, the number of subscribers will reach 12,153,800. Thus the level of mobile penetration in the republic will grow from 110.1 per cent to 129.2 per cent.

- At what stage is the project to build the Trans-Eurasian Information Super Highway TASIM?

- The TASIM construction project initiated by Azerbaijan has again been supported by the UN General Assembly. The resolution on creating a Eurasian Connectivity Alliance (EuraCA) and building the TASIM was approved at the 98th plenary meeting of the 67th session of the UN General Assembly. 

The EuraCA proposal was brought forward in view of the importance of the project for the region and in order to arouse interest in it and draw political support for its implementation from states in the region. 

This initiative envisages expanding transregional cooperation in the ICT sphere, providing for the needs and assisting the governments in tackling problems in this sector, attracting the private sector and creating a platform for exchange of experience in this domain.

The TASIM project envisages creating a main transit communications line from Frankfurt to Hong Kong and connecting altogether 20 countries. The network will connect the biggest information exchange centres in Europe and Asia, running across Azerbaijan, Turkey , Georgia, China, Kazakhstan and to Germany and it will  make it possible to fill the "information gap" between the countries of Western Europe and those of the Pacific region.  An alternative northern transit communications line will be laid across Russia, Ukraine and Poland.

The TASIM project currently involves countries such as Azerbaijan, Russia, Kazakhstan, Turkey and China. The project is aimed at reducing the poverty rate, speeding up economic growth and it can act as the locomotive of the region's development.

The construction of the Caspian segment of the optic fibre cable data highway is a constituent part of the TASIM project. Negotiations on the construction of its underwater segment are currently under way with Kazakhstan and Turkmenistan. As is known, Kazakhstan's operator is a member of the TASIM project consortium. This is why the talks on laying the underwater cable dataway are being conducted more intensively with that country.  

- What is the current status of efforts to introduce digital TV? How soon is digital signal expected to replace the analogue one?

 - The development of digital TV in Azerbaijan is a priority task assigned to the state because of the technical and economic advantages of this future-oriented technology. That is above all a new quality standard for present-day TV. Its major features making it different from conventional analogue networks is high quality images, frequency resource saving, a great number of channels and capability for value-added services.

One more no less important strength of digital TV is frequency resource saving. After the transfer to digital TV has been completed, the 790-862 MHz frequency band currently used in analogue broadcasting will be used for the needs of the LTE mobile communications standard. An urgent TV evolution issue for TV companies in the years to come is to deploy High Definition (HD) TV. Upon distribution of frequencies among GSM operators, the remaining frequencies (470-690 MHz) will be used for the needs of HDTV.

As regards the advantages of digital TV in terms of end user-oriented services, it features enhanced capabilities. Apart from high quality on-air TV, there is a huge choice of channels, customized multiplexing capability, the Video on Demand service and others.

The full transition to digital TV broadcasting is expected in 2014 but a 100-per-cent coverage of the republic's population with digital TV signal is to be in place by the end of the year. Today's coverage is 98 per cent. Analogue signal will be phased out starting with Azerbaijan's big cities (Baku, Ganca, Sirvan, Lankaran and others).

The main issue in transition to the new broadcasting standard is the population's preparedness. So far, the bulk of the population have analogue TV sets. A programme has been drawn up in Azerbaijan to provide digital TV decoders for low-income groups for a special price.

- Among important projects in moulding a hi-tech economy is the project to build a High Technologies Park. What role will it play in sustainable economic growth and enhancing competitiveness?  

- Strengthening the potential of local IT companies and the entire personnel potential is an important component of the ICT sector and this country's economy as a whole. The development blueprint "Azerbaijan-2020: A Look into the Future" sets the goal to double the GDP by 2020. In this context, specific tasks have been assigned to each economic sector.

Apart from strengthening the potential of private companies, it is necessary to organize joint cooperation with foreign companies which is a crucial aspect of regional expansion. Some steps along these lines have already been taken in Azerbaijan. One of them is to create a High Technologies Park (Technopark).

The Technopark will be built in the settlement of Pirallahi on an area of 50 ha. Efforts are currently under way to shape the park, build the necessary infrastructure, examine international experience and settle other organisational issues. 

The Technopark will be an area with the necessary infrastructure, facilities, equipment and control structures to run research in ICT, telecommunications and space communications and to develop new high technologies.

The park will also play an important role in sustainable growth of the economy and enhancing competitiveness.

The implementation of a pilot project will start within the Technopark in the near future to create a business incubation centre. The centre will be the first step in the process of start-up project development. It will be located in central Baku which is important as the bulk of higher educational institutions are based in the capital. A plot of land has already been allotted for the business incubator and it is planned to complete efforts to create it by the end of the year. 

The centre will host seminars helping its participants to improve their skills. When a start-up project has reached a certain development stage, the next step is to transfer it to the High Technologies Park.

- How soon will finaincal support for start-up projects begin? Has the State Fund for ICT Development specified the terms and conditions for their preferential funding?

- The first tenders for start-ups are expected to be held before the end of the year. Their main purpose is to select the most efficient and promising projects in the ICT domain. The funding of the projects is expected to start as from 2014. For this purpose, it is small, medium and big loans as well as grants will be issued through the State Fund for ICT Development (specifically, it is planned to earmark 5m manats through the fund in 2014). Bank and non-bank credit organizations will be involved as authorized agents for funding IT projects.

 Small loans may vary in size from 10,000 to 50,000 manats (for a three year period), medium loans - from 50,000 to 500,000 manats (up to five years) and big loans from 500,000 to 5m manats (up to 10 years). The annual interest rate on such credits will not exceed 5 per cent.

The maximum size of a grant may be 300,000 manats (for up to 36 months). The envisaged sizes range from 10,000 to 100,000 manats for small loans, from 100,000 to 200,000 manats for medium loans and from 200,000 to 300,000 manats for big loans.

The distribution system for the State Fund's money has a fairly transparent structure. Each submitted start-up project will undergo a thorough examination. The Fund is not authorized to take independent decisions - they will be taken at the level of the Supervisory Board which is a very important factor to ensure the transparent operation of the Fund. This will in turn make it possible to select the best projects. Alongside support to entrepreneurship, the Fund will also provide required consulting services to start-up business owners.

One of the important aspects in the Fund's activity is commercialization of innovative ideas both inside the republic and abroad. The Fund will play an important role in encouraging the inflow of foreign capital to the republic.