OPTICAL BRIDGE THROUGH THE CASPIAN

A major direction in the development of the national telecommunications market is Azerbaijan's participation in international projects for laying optical lines in order to expand access to the Internet. One of such undertakings is the Trans-Caspian Fiber Optic (TCFO) project, which provides for fiber-optic communication line between Baku and Aktau along the seabed of the Caspian Sea. Azerbaijan and Kazakhstan launched this grandiose project in November 2019.

400 km under the sea

Recently, President of Azerbaijan Ilham Aliyev received the Minister of Transport, Communications and High Technologies, Ramin Guluzade, and touched upon aspects of the implementation of the TCFO project, noting the importance of this initiative for turning the country into a regional digital hub.

"Azerbaijan has already become one of the important transport hubs of Eurasia. Our country must certainly become a centre in the construction of communication lines, the Internet and fiberoptic communications. In this regard, the groundbreaking ceremony of a 400 km long fiber-optic communication line held in Kazakhstan last November is extremely important. I'm sure that the construction of this line will be provided soon," President said.

TCFO is a transcontinental project to ensure a digital telecommunications corridor between Europe and Asia. The construction through the bottom of the Caspian Sea will be carried out by Transtelecom JSC, KazTransCom and Azerbaijani telecom operator AzerTelecom. It is expected that the optical communication line will be put into operation by the end of 2021, and its throughput will allow the transmission of at least 4-6 Tbits of data per second.

It is noteworthy that AzerTelecom, the Azerbaijani backbone Internet service provider, launched the preparatory work for the construction of a fiber-optic cable line in March last year. Even earlier, Azerbaijani and Kazakh companies created a consortium, and a joint working group followed by the signing of contract for the implementation of construction works. Also, the Azerbaijan-Kazakhstan intergovernmental agreement was signed and ratified for the same purpose. Leading international consulting and telecommunication companies such as McKinsey and Company, Detecon, Axiom, DLA Piper, Huawei and PwC have been involved in assisting in the implementation of this strategically important project.

According to the Prime Minister of Kazakhstan, Askar Mamin, the joint Trans-Caspian Fiber Optic project will allow to reach a higher level of development of a high-speed and secure data transmission infrastructure, connect to a number of leading Europe-Asia trunk routes.

The implementation of the TCFO project is not the only venture to connect the western and eastern shores of the Caspian Sea. On November 28, 2019, Azerbaijan and Turkmenistan signed an interstate agreement for the construction of a 300 km long fiber-optic cable line along the sea bottom (2-3 Tbps). This project is planned to be implemented by AzerTelecom and Turkmentelecom in the next two years. It will allow, to provide high-speed Internet traffic to Uzbekistan, Afghanistan, Pakistan and India through Turkmenistan.

Two decades ago, a branched optical infrastructure of the TransAsia - Europe (TAE) line was created in Azerbaijan. It was planned to start the construction of the underwater segment of the TAE trunk back in 1999, but for many years the project has been postponed due to unsuccessful negotiations with partners on the eastern coast of the Caspian. Today, all the obstacles to the implementation of the Trans-Caspian optical project are solved.

Segment with no alternatives

What specific advantages will Azerbaijan get from the implementation of fiber-optic projects through the Central Asia?

The TCFO project is part of the large-scale program Azerbaijan Digital Hub to transform Azerbaijan into a regional digital hub, which will provide high-speed Internet connection and provide modern digital services. The ultimate goal of the project is to turn Azerbaijan into one of the digital hubs of the region, covering the South Caucasus, the Middle East, Central and South Asia, with a population of about 1.8 billion people (about a quarter of the world's population). At the same time, it will also contribute to the One Belt One Road project initiated by China, turning Azerbaijan into a telecommunications corridor.

The link between the western and eastern coasts of the Caspian Sea with two submarine optical lines will also play an important role in the Trans-Eurasian Superinformation Highway (TASIM) developed over 10 years ago in Azerbaijan, which provides for the unification of more than 20 countries of Europe and Asia with a high-speed information network from Shanghai to Frankfurt am Main (24,000 km). The Russian Rostelecom, the Kazakh KazTransCom, the Turkish TurkTelecom, the Chinese ChinaTelecom, and the Azerbaijani AzInTelekom were involved in this project. During the first completed stage of the project, the leading countries of the region and operators were engaged in attracting telecommunication companies willing to invest in the main transit Internet infrastructure connecting West and East. At the second stage, carried out on the basis of the UN mandate, it is planned to provide an Internet connection at affordable rates for Eurasian countries that do not have direct access to international Internet sites.

That is why the Caspian segment has no alternative for the implementation of TASIM, since one of its main goals is to expand Internet traffic from Europe to the states of Central Asia and China. An important advantage of the TCFO project is the relatively insignificant length of its route, which will significantly reduce the latency in data transmission. Today, due to the need to overcome a significant distance along other cable routes, there is a delay in the transmission of data traffic between Asia and Europe, while transmitting a signal via communication satellites is much more expensive.

According to the Minister of Transport, Communications and High Technologies, Ramin Guluzade, the fiberoptic channel connecting Azerbaijan with Kazakhstan and Turkmenistan will become the most important link between Europe and Asia. And in the near future, Baku will turn into an Internet traffic exchange point (IXP) along with cities such as Amsterdam, Frankfurt, Sofia, London, Istanbul, Dubai, etc. And this, in turn, will provide Azerbaijan with all the financial advantages of a transit country.

Together with direct transit revenues, Azerbaijan will be able to rely on profits by creating the largest data centre in the region with the provision of its resources on the foreign market. This will allow the largest content providers (Amazon, Alibaba, Facebook, Google, Netflix, Tencent, etc.) to open their representative offices in Azerbaijan, as well as store and transfer information and content to other regions using the resources of the DATA centre. The implementation of the Azerbaijan Digital Hub program will also contribute to the creation of new jobs, accelerate the process of digitalization of the economy, stimulate the activities of system integrators and software companies to create new digital products and solutions, as well as their subsequent export to the countries of the region.

Minimum dependence

At the same time, the efforts to construct additional optical lines and turn Baku into an international Internet hub will minimize Azerbaijan’s dependence on traffic imports and turn the country into a central player in the region in exporting Internet services. This point is extremely important, since the passage of additional backbone optical IP trunk lines through Azerbaijan will technically simplify communication processes and, as a result, reduce the cost of connecting to a global Internet network. Ultimately, consumers in Azerbaijan will be able to pay less for connecting to the global web.

In 2008, the total throughput of international Internet channels in Azerbaijan was only 6 Gbps. However, due to the construction of new optical lines linking to Europe (through the territory of Russia and Georgia), by the end of 2018, their total capacity was increased to 820 Gbps. In other words, the throughput capacity of Azerbaijan has increased more than 136 times over 10 years. With an increase in the bandwidth of Internet channels, the number of users increases and prices decrease.

In general, the past decade has been very successful for the IT infrastructure and, in particular, the mass introduction of broadband Internet in Azerbaijan. According to studies by the International Telecommunication Union (ITU), the local market has reached 80% in terms of global network access, which is higher than in many regional countries. However, in the context of the rapid expansion of network space and traffic growth in the country, additional resources are required to increase the communication capabilities and bandwidth of Internet lines in Baku and other settlements of the country. "The number of Internet users is gradually increasing in Azerbaijan. This figure already exceeds 80%. Therefore, to ensure high-quality access to the global network, it is necessary to provide additional funds," President Ilham Aliyev said recently.

Among other things, it is about additional investments in the internal optical infrastructure as part of the fiber-to-home project, which has been ongoing for several years. Under this project, 18,000 km of fiber-optic cables will be laid to all settlements of the country, followed by the upgrade of the telecommunication network. As a result, in rural areas the Internet speed will reach 30 Mbps, in regional centres - 30 Mbps and in large cities - 100 Mbps. The implementation of the project coincided with the global energy crisis, which made certain adjustments to the timing. The penetration rate of broadband services in the country is 72%. Moreover, about half of the Internet connections are provided through the outdated ADSL technology, which does not provide the required connection quality and high Internet access speeds, including due to the connection to the providers via telephone exchanges of the PBX using a copper cable network. According to the Ministry of Communications, it is planned to complete the fiber-to-home project by 2025 increasing the level of penetration of broadband services to 95%.

The completion of the fiber-to-home project and the decommissioning of obsolete and low-speed copper cables will allow government backbone providers and communication centres to reduce operating costs, thereby providing a resource for cheaper wholesale prices. Accordingly, secondary providers will be able to reduce the cost of final prices for the population and improve quality parameters, which will significantly expand the offer on the local Internet market.