ON THE THRESHOLD OF INFORMATION BREAKTHROUGH

Azerbaijan is one of a handful of countries in the world that have managed to maintain relatively high rates of development of the ICT sector in the post-crisis period. In recent years, Azerbaijan is the country in the South Caucasus to implement large-scale projects to launch satellites, develop mobile communication of the third and fourth generations, create a regional and trans-national infrastructure to improve access to broadband Internet and form a fully-fledged e-government system. At the same time, domestic producers of computers and IT-equipment, as well as system integrators and software companies, are actively exploring foreign markets.

Soon in Azerbaijan: 4G

 "The government of Azerbaijan is paying great attention to the development of the ICT sector. Over the past eight years, the country has adopted a strategy on the ICT development and several state programs, developed a legal framework, carried out drastic reforms. As a result, we have created a competitive and dynamically developing ICT market capable of absorbing major investment and introducing the latest technologies and innovations. This 17th BakuTel exhibition is a graphic example of the rapid development of Azerbaijan's communications sector," Azerbaijani President Ilham Aliyev said in a message to the participants of the international forum.

For many years the BakuTel exhibition has been a kind of a showcase demonstrating the achievements and future plans of the world's largest IT-companies in Azerbaijan. In terms of it status, this exhibition is firmly in second place after the traditional oil and gas show. Not surprisingly, the opening ceremony of BakuTel-2011 was again attended by the Azerbaijani President, while its guests featured executives of leading trans-national IT-companies, heads of communication departments of several countries and leaders of various international organizations.

This year's BakuTel show coincided with the anniversary of Azerbaijan's communications industry: 130 years ago, Nobel Brothers laid the first telephone line in Baku, and this memorable date signifies the start of the country's communications industry.

BakuTel-2011 has confirmed the growing interest of local and foreign companies in developing Azerbaijan's IT-market. At the same time, the forum has demonstrated three major trends of the dynamically developing telecommunications sector in our country. The most popular and profitable area of the telecommunications market in the country for many years has been the development of mobile technologies, in particular the introduction of the third and fourth generation standards, 3G and 4G, which combine high-speed mobile access to broadband Internet channels and high-quality radio technology. Azerbaijan's first 3G network started being developed by Azerfon (trademark of Nar Mobile) in December 2009, while in November this year, the Ministry of Communications and Information Technologies issued licenses for the provision of broadband services also to cellular operators Azercell Telecom and Bakcell. Today, all three operators offer unlimited Internet connection not only for 3G smart-phones, but also for laptops, tablets and other devices through a mobile modem. Subscribers of these companies can now see the person they are talking to through the videophone, do business, learn, use the services of e-commerce, watch TV and movies in the HD format. Thus, Azerfon and Bakcell have already established connection between their networks and are opening up a video link between their subscribers via the 3G network.

It is noteworthy that the symbolic launch of Bakcell's 3G service was carried out by President Ilham Aliyev during the exhibition. Bakcell is offering some of the lowest fares, which has paved the way for over 200,000 subscribers to join the new service. Users in 62 cities across the country have access to mobile Internet at a speed of 10-14 Mbit/s, while in Baku it is possible to maintain an even higher speed.

Azercell has also connected all of its base stations to the 3G technology, providing almost complete coverage. As a result, around 300,000 subscribers started using services of the third generation in early November. More recently, Azercell Telekom has asked the ministry for a license to provide 4G-services.

With competition growing, Azerfon has markedly reduced its tariffs for its broadband services and applied to the ministry for a license to engage in 4G-services. To create a fourth generation network, Azerfon has recently signed a contract worth $80 million with Nokia Siemens Networks. The latter has pledged to upgrade the existing network, expand coverage to the Baku underground and, most importantly, to re-equip all base stations on the basis of the LTE technology. The advantage is in streamlining the Internet traffic and expanding the amount of transmitted data, which will enable the use of new 4G services and, most importantly, significantly lower the tariffs.

"We expect the provision of 4G services in Azerbaijan to start by May next year. All three mobile operators will have equivalent conditions for the transition to new technology, and the Ministry of Communications has already applied to the State Commission for Radio Frequencies to allocate frequencies. At the same time, mobile operators have been instructed to complete their technical studies and other preparatory work for the introduction of the fourth generation services in the shortest period," Minister of Communications and Information Technologies Ali Abbasov has said.

Space advances

The most important and a completely new direction in the ICT development for our country is the space program. According to Deputy Minister Elmir Valizada, the joint work of Azerkosmos OJSC with foreign partners is progressing strictly according to plan. The manufacturer of Azerbaijan's first satellite, the US Orbital Sciences Corporation, and French Airanespace, which is to take it into space on carrier Ariane-5ECA from the Kourou booster site in French Guiana, will complete their work by the end of next year. The first AzerSpace satellite is to provide digital TV and radio broadcasting services, Internet access, data transmission, create VSAT multiservice networks, and provide secure government communication. The ministry intends to use only a quarter of the satellite's resources for domestic needs, while three-quarters will be marketed internationally. The orbital position of the satellite has been leased from Malaysian satellite operator MEASAT and Malaysia has already placed an order to purchase 40 per cent of the AzerSpace resources.

In about 2015 Azerkosmos plans to launch a second telecommunications satellite, while in the future it may launch satellites for various other purposes, e.g. for remote exploration of the earth. "Work has already begun to build the main ground satellite control center for AzerSpace. The center will be located in Baku, near the exit from the Samaxi highway. The second backup control center will be located in the Naxcivan Autonomous Republic. Its construction is scheduled to start in January next year. The construction of a third station for commercial operation of the satellite is due in Cyberjaya, a key innovation and IT-center of Malaysia," says a representative of the commercial department of the Azerkosmos OJSC, Ruslan Aliyev. In parallel, Azerbaijan plans to develop its space industry. Thus, the Ministry of Defense Industry in conjunction with the aid the National Aerospace Agency (ANA) plan to launch the production of satellite VSAT-communication, e-cards, create a cutting-edge surveillance network, tracking, as well as a system of space warnings, etc.

Another trend of the BakuTel-2011 exhibition has been the developments of domestic producers of computers and related equipment, as well as software companies and integrators of the network infrastructure. It is noteworthy that this product has also been sold in neighboring states in recent years. In particular, a leading manufacturer of computer technology and equipment, the Azerbaijani company KUR, has recently begun to export its products to Georgia and Turkmenistan. In the long term, the company intends to expand the range of its exports by computerized kiosk laboratories, decoders and ADSL modems, decoders for connection to digital TV. The start of production is planned for January next year. The export direction is gradually being developed by a company called Ultra, which is engaged in software development and production of laptop and desktop computers, servers, LCD-monitors and TVs.

However, the most promising and lucrative export activity for the domestic IT-sector is the development of software solutions and integration of network infrastructure. This area does not require billions in investment in the construction of modern plants production chips and other hardware components, but rests entirely on the intellectual capabilities of programmers and integrator engineers, which guarantees a high level of profitability and a rapid return on investment. Leaders in this direction in Azerbaijan are SINAM, R.I.S.K., AZEL, ULTRA, Caspel and several other local partners of renowned software giants such as Microsoft, IMC, CISCO, Oracle, HP, Allied Telesis, etc.

A good example of such a breakthrough is the activity of SINAM, which is expected to finish at the end of this year the development and implementation of an integrated software system for the State Tax Service (STS) of Kyrgyzstan. The system being created in Kyrgyzstan is similar to the automated tax information system (AVIS) one operating at the Ministry of Taxes of Azerbaijan for more than five years now. It consists of 11 modules: for the registration of taxpayers, income calculation, processing of declarations, electronic audit, debt enforcement, appeals, third party information.

And this is not the only example of the successful operation of Azerbaijan's software companies outside the country. In late 2010, R.I.S.K. introduced air navigation systems PANDA and OMEGA at the Moldovan state enterprise MoldATSA. Moldova became the ninth country in the world to introduce air navigation systems based on R.I.S.K. solutions. Earlier, these solutions had been successfully integrated into Kazakhstan, Belarus, Latvia, Estonia, Thailand, Brazil, Dominican Republic and, of course, in Azerbaijan.

Another example: in June this year, the Azerbaijani IT-company Matrix in partnership with SINAM signed a contract for the supply navigational tracking systems to the oil company in Turkmenistan. The devices based on GPS-navigation devices will be installed on 5,000 vehicles of the oil company. The project also envisages the creation of 150 base stations for traffic control systems.

As is evident, the pace of development of Azerbaijan's ICT sector is truly impressive. Over the past six years, the sector has grown five times, by an average of 30-32 per cent a year. Peak levels occurred in the pre-crisis 2008, when a record growth rate of 37.21 per cent was achieved, which was more than three times higher than the world average. The national ICT sector even survived the crisis of 2009-2010 without noticeable loss. According to the results of the first three quarters of 2011, telecommunications and postal services have grown by an average of almost 15 per cent to last year, but if we consider the IT-sector alone, it has grown almost twice over this period.

To a great extent this impressive dynamics has been brought about by the large capacity of the domestic computer market and state support for a number of projects to introduce elements of e-government and the computerization of government agencies, as well as the growing number of users in the private and civil sectors. New projects in the sector will ensure sustainable growth in the coming year too.