New sphere of competition expected in AzNET

Azerbaijani Internet market has substantial growth potential. This segment of the telecommunications market shows steady growth in the number of Internet users for the last years.

According to official indicators of the Communications and IT Ministry and international research organizations, the level of Internet access in Azerbaijan exceeds 44%.
According to a recently published report of Internet World Stats, the number of Internet users in Azerbaijan (including users of mobile Internet) reaches 3.69 million. Azerbaijan leaves Armenia and Georgia, as well as some countries of Central Asia - Kyrgyzstan, Tajikistan and Turkmenistan behind in terms of the number of Internet users.

Regarding the development of the Internet in the republic, the total throughput of traffic in the AzNET is 30 Gb/s. Only 4-Gbit/s has been loaded. The rest part is in reserve to increase the stability of a segment from external factors. The country gets traffic via the optical lines from Iran, Russia and Turkey. Data transmission speed in the country hits 40 Gbps with the use of transport technology DWDM (Dense Wavelength Division Multiplexing). The real data transmission speed in Delta Telecom network allows to download the amount of information equal to the total capacity of 33 DVD-carriers for one second. This figure is several times more than the real needs of AzNet segment. It is connected with existing factors, based on the shortcomings of the infrastructure established between Internet service providers and end users.

About 40 Internet service providers operate in Azerbaijan. Almost all of them added integration services to the list of services to get more profit. Providers began to develop methods of wireless broadband connection. The most common types are Wi-Fi, iBurst and WiMAX. Despite the list of broadband Internet proposed by providers. More than 60% of Internet users (mainly household connections) still go online via dial-up connections. But the prospects of Dial-up are limited. According to specialists, the technology will dominate over the next 2-3 years. Afterwards, it will be replaced by the wired and wireless broadband connection.

DSL-connection became rather popular for the last 2 years. The cost is gradually approaching Dial-up. The subscriber's fee and equipment cost (ADSL modems) reduction can radically change the situation and significantly push back Dial-up. It may affect the development of home networking market of broadband access.

Regarding the cost of connection, subscribers'costs to get access to ADSL vary from 10 manat - 256 Kbps up to 140 manat - 8192 Kbps depending on the chosen tariff plan. The minimal cost of Dial-up-skrech card for 12 hours is 1 manat (AZN), and unlimited access for a month - from 12 manat (AZN). Dial-up-users' share hits more than 60% of its customer base for most providers. On average, the number of subscriber base of Internet providers today is about 4,000-7,000 users. If we talk about sales, about 35-40% of providers' income fall to this category Dial-up-connection.

The Internet tariffs in Azerbaijan has reduced by 6-7 times for the last two years. Such a sharp decrease in the cost of connection is explained by lower prices for external channels (both satellite and terrestrial), cheaper equipment and increasing competition among providers. Competition on the Internet service market can significantly tighten in the nearest time. Mobile operators' network, namely, the standard third-generation (3G), which is available today, will compete with Internet service providers. The new standard is oriented, primarily, for data transmission (up to 2 Mbps).

Operators of cable television and fixed line must play important role in the development of the broadband connections market. They are actively engaged in modernization of their network infrastructure based on Next Generation Network (NGN), allowing to render nontraditional services (Internet access, IP-telephony, IP-TV Video on Demand and etc.), as well as voice services to customers. The introduction of these services (if there are reasonable tariffs) can significantly affect the increase in the number of household connections and development of the Internet market as a whole.


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