FIBRE TO HOME

A key trend in the development of the telecommunications market in Azerbaijan is the formation of a multi-level and multi-directional Internet infrastructure. Another step of the Ministry of Communications and Information Technology (MCIT) was the implementation of the fibre to home project. This initiative provides for the laying of a high-speed fibre-optic communication line to provide broadband Internet services in all regions of the country.

Price of the speed

In recent years, Azerbaijan has occupied a leading position in the CIS for the steady growth of the Internet market: in 2012, the domestic market grew from 65 to 70 per cent in this indicator, not to mention the significant reduction of the cost of network traffic. "Last year, the volume of traffic increased by 2.2 times and prices fell by almost 35 per cent. Today the cost of one megabit per second for users is less than three per cent of the average salary. For comparison, in many developing countries, the figure is around 20 per cent," said Minister of Communications and Information Technology Ali Abbasov.

Now the Ministry of Communications and participants in the Internet market will have to solve another task - to achieve an even better value-for-speed correlation in broadband services, and most importantly, to provide opportunities for access to the Internet in the most remote regions of the country. This problem is multi-component, and its solution involves the building of new optical lines, ensuring the country's access to information flows of global Internet hubs, as well as the development of a modern network infrastructure in Azerbaijan itself.

Despite its favourable geographical location at the crossroads of Europe and Asia, our country is sidelined from global Internet centres - backbones (fibre-optic IP-channels), especially designed for pumping the Internet, do not pass through its territory. That's why for many years, Azerbaijan has been forced to use Internet traffic through the internal cable networks of several transit countries. And this makes the process of communication technically complex and greatly increases the cost of traffic.

To overcome these objective obstacles, Azerbaijan is deeply involved in several international projects for laying fibre-optic IP-highways. In particular, Azerbaijan is a transit country in the international project on the Europe Persia Express Gateway (EPEG) fibre-optic cable line. In a couple of years, the Trans-Eurasian Information Super Highway (TASIM) initiated by Azerbaijan will be implemented. Probably, the expansion of the trans-Caspian segment of the TAE communications system will be completed before that.

Together with the implementation of cable projects, Baku will optimize the management of international Internet traffic. In August last year, the Azerbaijani communications operator Delta Telecom created its own Internet hub in Frankfurt, which allows for the transfer of 1.4 terabytes of traffic from Europe to Azerbaijan.

All this together will provide our country with a significantly cheaper IP-connection, increasing the speed of access to the global network several times over. We should not forget about the bonuses that Azerbaijani fibre-optic communication operators will receive from the transfer of third countries' transit traffic.

Broadband

However, the increased traffic entering the country through the main channels has yet to be redirected to the distribution system and delivered to the end consumer. This problem was also implemented in phases: from 2004, the MCIT began an extensive project to reconstruct regional and metropolitan telephone networks, making Azerbaijan the first CIS country to digitize absolutely all regional and metropolitan exchanges. For several years now, the country has been working to connect all internodal telephone exchanges to Next Generation Network (NGN) technology, which provides high-speed and high-quality voice and video communications via fibre-optic channels and supports all kinds of multimedia services such as broadband Internet, IPTV, IP-telephony, etc. It is expected that by 2015, this innovative resource will be adopted by all exchanges in the suburbs of Greater Baku and most of the country's regions.

Finally, this year the MCIT will implement the large-scale and capital-intensive fibre to home project that provides for radical modernization of the distribution systems of IP-channels in all regions of the country. The State Oil Fund will allocate about 103.6 million manat for the implementation of the first stage of the project in the coming weeks. All in all, it is planned to invest 400-450 million manat in the project by 2015. As consultants of SOFAR and the MCIT, the fibre to home project involves specialists of Booz & Co - their responsibility is to develop technical, commercial, operational and regulatory issues.

After three years, the Ministry of Communications plans to cover all population centres of the country, including the territory of the Naxcivan Autonomous Republic and villages located in remote areas, with broadband Internet access on the "fibre to home" principle. Within the framework of the project, it is planned to replace obsolete and low-capacity cables with copper veins with fibre-optic lines that will be connected to all multi-storey houses and administrative and public buildings, upgrading for this purpose the telephone exchanges that already exist and are under construction. It is also planned to increase the installation of telephones in settlements with lower fixed line penetration, conduct a number of structural and tariff reforms and improve the regulation of access to the global web.

According to the task formulated by the ministry, by the end of 2015 the speed of data transmission in Baku should be about 100 Mbit/s, in other major cities and district centres of the republic - 30 Mbit/s, and in towns and villages, it should not be less than 10 Mbit/s.

"The fibre to home project will be implemented in three phases, and from 2014, about one third of the total investment will be secured through reinvestment. The ultimate goal of this effort will be to bring the total number of users of broadband services to 85 per cent. Thus, by 2017, in terms of Internet access, Azerbaijan will reach the level of the world's developed countries," said Minister Ali Abbasov.

The most important outcome of the new initiative of the MCIT will be regional residents' access to "electronic government" tools, e-banking, commerce, education, and other network services. The fibre to home project will eliminate the digital divide between urban and rural areas and improve the IT-sector, creating favourable conditions for developing the business of Internet providers who operate on the periphery.