AZERBAIJAN s ICT Sector: Dynamic and Growing
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1 AZERBAIJAN s ICT Sector: Dynamic and Growing Prof. Dr. Ali M. ABBASOV Minister of Communications and Information Technologies of the Republic of Azerbaijan
2 AZERBAIJAN s ICT Sector ICT Sector: Turning Black Gold into Human Gold Network, Regulatory and Legal Overview National Priorities and Projects, and Areas for Investment and Collaboration
3 Azerbaijan: One of the World s Fastest Growing Economies 40% 30% World Azerbaijan 26% growth in % 10% 0% ' '05 '06 Source: Economist Intelligence Unit (2005)
4 Incoming State Revenues: Oil Projects are Booming Azerbaijan s revenues from these four projects were estimated at $107B over a ten year cycle assuming oil prices were $30 per barrel. At the current level of $50 per barrel, the ten year revenue stream increases to an unprecedented $178 B.
5 $M The ICT Sector: Over the Long Term Even more Opportunities than Oil! OIL Telecom
6 The New Ministry: Catalyzing Sector Change New Ministry leadership in 2004 with vision, resources and an action plan to build a modern ICT sector and a merger of communications and IT Ongoing participation in major global ICT events, including: GAID, Davos 2007, Tunis 2005, Geneva 2003, BakuTel, others Visits to and with numerous stakeholders for partnership and investment dialogues including USA, Russia, Dubai, Iran, South Korea, Japan; over 30 in total Established new partnerships, 33 inter-governmental agreements and MOUs, and received ICT sector-related grants from: US Trade and Development Agency and UNDP ICT MOU with US Department of State World Bank - $30M project loan South Korea e-government loan Other private agreements Commitments to sector reform, including investment, collaboration, and better use of national technology resources (human and capital) to improve domestic development and capabilities, and to boost regional and global trade and investment.
7 Azerbaijan s Government: Supporting the ICT Sector s Growth tate support for developing non-oil sectors; profits from oil & gas allocated to the next priority sector: ICT trategy in place to reshape the economy towards high-tech & knowledge lans in place to leverage Azerbaijan s strategic location as a crossroad of international transport corridors tate policy to develop the national transportation network Ministry of Communications and Information Technologies of the Republic of Azerbaijan, 2007, USA
8 State Priorities in ICT Republic of Korea 7 India 9 Japan 13 USA 19 Jordan 12 Hongkong 24 France 25 Great Britain 27 Azerbaijan 29 Austria 43 Germany 53 China 56 Italy 85 Source: The world Economic Forum,
9 Opportunities Await! Azerbaijan is heading up the scale Azerbaijan now Egypt Russian 7 Azerbaijan in the 6 near future Italy China Japan USA France Great- Britain Cаnada Rating of Use of IT Source: The Global Information Technology Report 2005
10 Quality of Azerbaijan s Scientific Education France 4 India 5 Hong Kong 10 Japan 19 Republic of Korea 25 Austria 33 USA 39 Germany 46 Great Britain 47 China 51 Italy 64 Azerbaijan 82 Source: The World Economic Forum,
11 R&D Expenditures in Azerbaijan We would like to collaborate to improve this percentage Finland USA Germany Russia Ukraine Hungary Moldova Estonia Malaysia Lithuania Belarus Slovakia Poland Bulgaria Latvia Romania Azerbaijan Georgia Armenia Kazakhstan Kyrgyzstan R&D expenditures as a share of GDP (2002, in %) Source: UNESCO Institute of Statistics, 2007
12 AZERBAIJAN s ICT Sector ICT Sector: Turning Black Gold into Human Gold Network, Regulatory and Legal Overview National Priorities and Projects, and Areas for Investment and Collaboration
13 Subscriber Growth: Double Digit in Key Areas! (per 100 citizens) PSTN subscribers Mobile subscribers Internet users Source: Pyramid Research; Economist Intelligence Unit.
14 Investments in PSTN and Mobile Networks ( ) mln USD ,2 122,82 101,5 138, ,1 45,7 41,2 40,5 40,4 34,23 32,4 25,1 29,4 16,4 18,1 10,1 13,5 10,7 8,1 12,5 2,3 3 2,2 2,2 2,9 4,64 3, PSTN Mobile Other
15 Azerbaijan s ICT Imports: Export Opportunities! Telecommunications equipments Computer and computer equipments Electronic equipments Audio and video equipments Other ICT goods 136,155 35,047 7,806 12,323 46,268 In US $000, 2005
16 Telecom Sector Revenue (1997/2006) 500,0 657,5 400,0 27,7% mln USD 300,0 mobile sector 200,0 116,7 72,3 100,0 68,0% 90,4 0,0 32,0% 26,0 mobile sector Private sector Government Sector
17 Main Reform Directions in the ICT sector Our goal is to provide and sustain a fair, transparent and competitive marketplace. Privatization of state owned enterprises Liberalization of market Create an independent Regulator and well functioning regulatory processes Improve legislation to modern standards
18 Legal Base and Regulatory Framework: Accomplishments The following laws have been adopted: E-signature and e-document Postal services Communications Telecommunication E-commerce
19 Planned Commitments by Azerbaijan to the WTO for the Telecommunications Sector We are working towards meeting the following WTO requirements: Market liberalization Privatization of state-owned communication enterprises Creation of the sound competitive environment; Prevention of anti-competitive practices Establishment of the independent regulatory body 3 years after admittance to the WTO, allowing other operators into the international communication service market Transparency of interconnection arrangements Public availability of the procedures for interconnection negotiations Public availability of licensing criteria
20 AZERBAIJAN s ICT Sector ICT Sector: Turning Black Gold into Human Gold Network, Regulatory and Legal Overview National Priorities and Projects, and Areas for Investment and Collaboration
21 Azerbaijan s ICT Sector: Ten Key Features 1. he Azerbaijan market is small -- but quickly evolving and serves as a vital link to regional ICT opportunities 2. he IT market for telecom equipment is growing fast 3. obile telephony is growing rapidly; introduction of third cellular operator has been initiated 4. rowing demand for systems and software application 5. rowth potential for main wholesalers and distributors 6. pportunities for application development e.g, registry, I-cards, customs automation, election systems, student enrollments, tax administration and e-banking. 7. Ministry ong-expected of Communications privatization and of Information the monopoly Technologies service provider of the is Republic taking place of Azerbaijan, leading to 2007, related USA telecom sector development and overall market growth
22 Azerbaijan s ICT Sector: Key Opportunities and Trends oftware companies are rapidly developing Azerbaijan is seeking collaborations and investors to supplement the software capabilities that exist Azeri language software opportunities for growth omputers are being assembled based on imported sub-assemblies elecom manufacturing focusing towards specialized segments arket Potential: Content creation and IT enabled services Replication of Azeri computer systems, applications and IT t i t ti f th C
23 Current ICT State Programs National ICT Strategy for development of the Republic of Azerbaijan ( ) State Program on development of communication and information technologies of the Republic of Azerbaijan in accordance with modern requirements ( ) (E-Azerbaijan) State Program on Socio-Economic Development of the Republic of Azerbaijan ( ) State Program on provision of secondary and primary schools with the information and communications technologies ( ) State Program on poverty reduction and development
24 National E-Governance Network Initiative Project The July 2004 initiation of this Project is the outcome of the Republic of Azerbaijan s commitment e-government development combined with strong support from the United Nations Development Programme. Project Activities include: National Backbone Network AzDATACOM: The network is a crucial piece of the country s infrastructure; when completed, the network will provide highspeed interconnectivity for the regions and the capital city, Baku. Support development of national e-governance, serving as an agent for change, coordinating relevant activities, developing central e-government infrastructure, supporting policy development, and initiating new projects in the areas of G2G, G2B, with the special focus on G2C.
25 Regional Innovation Zone (RIZ) in Azerbaijan There are fundamental motivations and opportunities -- for developing a RIZ in Azerbaijan The region has a big gap in the ICT industry; During Soviet times, and through today, Azerbaijan possesses distinctive intellectual/scientific human capacities; The BTC pipeline and its secure and proven international contracting methodologies - is only the start! Azerbaijan is now working to create and sustain a technology platform, business development environment, physical and information infrastructure, and related regulatory, legal and tax planning other initiatives that will provide an attractive, consistent and secure investment and operating environment; MCIT General Advisor and Booz Allen Hamilton Study Team at work with recommendations forthcoming in the Spring The Azerbaijan government is ready to share the investment risk.
26 Ministry Opportunities: Regional Innovation Zone Currently in the evaluation and planning stage, with assistance from a major global technology consulting firm, the RIZ has five core objectives: S: Stimulate technology innovation via small and middle scale entrepreneurs; H: Develop human resources, particularly in IT and high technology areas; I: Create an international data transit center; N: Provide a hospitable, innovative and collaborative environment for new and established domestic, regional and global technology organizations to invest and expand operations in Azerbaijan; E: Establish an innovative environment that supports and enhances production and regional exports of electronic equipment and software products and services. Visit for updates about this important project.
27 World Population Statistics Information Market 80% E-content 22,2 28,5 Azerbaijan 1,8 35,6 2,6 7,8 1,7 20% E-content
28 Azerbaijan is a strategic location for Caspian investment and regional operations
29 We welcome you to Azerbaijan And thank you for joining us -- and look forward to working together. 33, Azerbaijan ave., Baku Azerbaijan Phone:
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