DIGITAL TRANSFORMATION

Information and communication technologies have a pivotal role to play in shifting the life of society along with state and employing new development trends.  In a globalizing world, important projects being implemented in the field of ICT have a positive impact on people’s lives; digitalization and increased electronic services are accelerating transition into the information society, precipitating technologies to be applied properly and built upon a sound foundation.

The role of technological base – foundation in digital transformation

Building a technological system living up to the emerging developments and harnessing the potential of digital transformation at full stretch is not easy. It also requires the application of relevant technologies and financial investments. Moreover, the existence of a fixed technological base is a must to attain technological advancement.  This is the very strong and quality technological base that constitutes the cornerstone of the technological progress we see in many developed countries. Another key element is set up a world-class technological base and builds innovative technology platforms upon it.

Any service platforms such as the Mobile Business, Fixed Broadband Business or the Mobile Financial Services, Fintech and IoT can’t operate without technological base and infrastructure. For instance, the quality IPTV or OTT services necessitate high-speed internet access and a software package or for the MFS, it is necessary to have regulatory frameworks and tools making it possible to conduct financial transactions via mobile phones. As for the FMC to operate fixed business line and mobile business must be connected over a full-scale infrastructure; otherwise, tremendous business losses may occur. The same scenario applies to the M2M and Big Data too.

Provision of instant mobile services generated upon a robust and fixed base are on demand in today’s market. Now, mobile network operators are steeping into a new development phase, since they understand that the growth of future business does not rely on voice communications any more, but on data services and content. The convergence of mobile and fixed business in mind, products introduced by the world’s telecommunication providers, such as the “triple play” (three services – mobile service, TV and internet service) or the “quadruple play” (four services – mobil service, TV, fixed line service and internet service) require the fixed technological base to be robust and durable in order to operate swiftly and properly.

As far as the world-wide new development tendency – 5G is concerned, mobile network operators must be prepared for this system and form the fixed base as required, which entails investments and operation costs. In regard to mobile network operators’ transition from 4G to 4.5G Pro and then to 5G, henceforth the fixed infrastructure must become more powerful and measures must be taken to encourage public and private sectors’ investments in innovations and technologies.

Now, 5G is going through its trial phase, and in the nearest future this system is going to be utilized. Thus, mobile network operators are pretty aware of new horizons that will open up with the application of 5G and skyrocket their investments in the fixed infrastructure. Given fast-growing customer demands, mobile operators are improving the existing 4G system.  According to the GSMA’s “Mobile Economy 2017” report, soon many countries will launch 5G technology to the market. More precisely, South Korea’s “KT” will hold 5G market launch in 2019, while Japan’s “NTT DoCoMo” is going to provide its customers with this service in 2020. In 2020, “China Mobile” (the People’s Republic of China) will establish 10 thousand 5G stations.  As for European countries, 5G will be available at least in 1 city of the EU member states in 2020. “Etisalat” is going to release nationwide 5G services for the Expo 2020 to be held in the United Arab Emirates. According to the company’s report, by 2025, the 5G network will have reached out to 1/3 of the world population.

“Deloitte” also states that by 2023, 5G will have been deployed in many markets of the developed world. In its “Technology, Media and Telecommunications Predictions 2018” report, it has been stated that 5G will be faster and present more access opportunities.

In general, according to international organizations, the infrastructure costs of operators will increase. The International Data Corporation’s report suggests that by 2021, the global expenses concerning cloud services, infrastructure, hardware and software, and cloud computing will have doubled, reaching $ 530 billion.

Local companies should pay special attention to the establishment of appropriate technological base

Mentioned issues are the matter of priority for Azerbaijan. Nowadays, new directions in ICT sphere are on formulation stage. The technological projects which were considered impossible 10 years ago, today are being successfully implemented.

The establishment of the state-of-the art Data Centres, attributing significant attention by the government to this sphere, pioneering projects by operators in mobile finance technology sphere, increase in the number of devices joined to the network and the development of IoT and M2M directions are the obvious examples. Also, the provision of OTT platform by all traditional and new generation operators is the showcase of its adaptation in this sector. After some time, mobile financing services will be actual in our country. Mobile operators apart from voice, additional value services and internet connections, will enter to the mobile payments market. This case will open new opportunities in digital payments system and therefore the application of new, the state-of-the art technologies, establishment or reconstruction of fixed technological base are the matters of priority.

Currently, the representatives of private telecom sector should pay special attention to the development of technological base for the application of innovative technologies, make an investment to the development and renovation of fixed base, thus as a rule, high quality and fixed technological base will dramatically reduce the future additional costs.

Nowadays, the increase in the number of mobile operations, mobile phones' usage as a personal identification tool, usage of e-services conditions technological transformation, mobile government concept and the latter provisions can be realized through right base. We should note that, the extension of digital payments, transition to the mobile government are prescribed by the "Strategic Road Map on the development of telecommunication and information technologies in the Republic of Azerbaijan" approved by the Decree of the President of the Republic of Azerbaijan, Ilham Aliyev on December 6, 2016. The Road Map provides the preparation of "mobile government" (mGov) concept as a next step for "Electron government". In general, Strategic Road Map mentions the achievement of the following issues as a target for the information and communication sector for period after 2025 year: being a leading country in the region for the long-term ICT perspective, establishment of strong potential ICT and telecommunication infrastructure, reach the fixed and mobile broadband network coverage up to 95 per cent, create opportunities for the development of technology structuring, as well as digital economy in education system, make an impetus for the growth in bank, finance, education, medical and in other social spheres and to the extensive application of e-services.

The government, as a main driving and regulating force has an exceptional role in the establishment of all these innovations. However, one of the most important issues is the launch of telecommunication operators' initiatives, investing in new technological fields, developing the initial fixed base and ensuring sustainable development of the ICT sector and accelerating the transition to information society.