Astana, Baku fast-track implementation of trans-Caspian optics project
Review by Caliber.Az

ANALYTICS  30 January 2023 - 13:30

Kazakh Prime Minister Alikhan Smailov has urged to speed up work on the joint TransCaspian Fiber Optic (TCFO) project with Azerbaijan - installation of an underwater fiber-optic communication line between the shores of the Caspian Sea. The launch ceremony of the Azerbaijan-Kazakhstan TCFO project took place more than three years ago, but the pandemic, a series of global crises, and geopolitical changes in the Eurasian region somewhat delayed fundraising and implementation of the endeavor. A new impulse to the project was given in 2023: recently, AzerTelecom and Kazakhtelecom signed an agreement on the terms of cooperation in the framework of TCFO. The day before, the head of the government of Kazakhstan instructed the State Fund Samruk-Kazyna to work out the issues of its financing by March 10.

The idea to connect the western and eastern coasts of the Caspian Sea with an optic cable by virtue of various reasons turned out to be the most protracted regional undertaking. Regrettably, several earlier attempts have failed: in particular, the EU-initiated Trans-Asia-Europe (TAE) project, launched in 1999, excluded an underwater component and connected the South Caucasus to Central Asia by land via Iran. The maritime segment was also part of Azerbaijan's 2008 initiative, the Trans-Eurasian Super Information Highway (TASIM), which was supported by the UN and a number of EU countries. It even managed to implement some of its elements: our country extended the backbone internet cables to the west. However, the incompleteness of the TASIM project has again delayed the construction of the trans-Caspian fiber-optic line.

Subsequently, Azerbaijan and Kazakhstan conducted lengthy negotiations over the laying of the offshore optical segment as part of the bilateral business agenda: by 2019, the two countries' telecommunications companies had agreed to form a consortium, a joint working group was established, a bilateral intergovernmental agreement was ratified, and a ceremony was held in November of that year to announce the start of project implementation. However, the pandemic crisis and the subsequent global backlash have delayed the organisational and financial arrangements for the TCFO project.

Nevertheless, over the past three years, the project participants have done a lot of good work to implement the undertaking. For example, in September last year, AzerTelecom and Kazakhtelecom signed a memorandum of strategic partnership on TCFO on the margins of the annual international technological forum Digital Bridge in Astana. Acceleration of implementation of trans-Caspian cable projects was discussed by the heads of the governments of Azerbaijan, Kazakhstan, and Turkmenistan in October 2022 in Moscow at the 2nd Caspian Economic Forum.

Moreover, at the end of last year, Kazakhstan's Minister of Digital Development Baghdat Musin reiterated the speedy implementation of the trans-Caspian optical endeavour, in which all Central Asian countries have shown interest. In particular, three years ago an intergovernmental agreement was signed between Azerbaijan and Turkmenistan on laying another 300 km-long optical cable line with 2-4 terabits/sec capacity across the Caspian Sea, and a year later the document was ratified by the parliament of Azerbaijan and approved by the Head of State. The number of potential beneficiaries and future participants in the TCFO project grew dynamically: in 2021, memoranda of cooperation were signed with telecom operators ElKat LLC and Telegraph 42 Management Gmbh LLC, representing Kyrgyzstan and Uzbekistan respectively. In December of the same year, another partner was added to the project: a memorandum of cooperation was signed with Türkiye's Türk Telekom International.

The most important outcome of the work carried out over the years was the final high-level design (HLD), the final design studies were carried out and a detailed roadmap was approved. In the updated version of the project, the length of the main cable has been reduced from the original 380 kilometres to 340 kilometres, and a 330-kilometre backup line is also planned. Overall, the optical bridge will connect the Kazakh port of Kuryk with the Absheron settlement of Buzovna near Baku.

The final outcome of all this work was the conclusion in January this year of an "Agreement on the terms and conditions of cooperation" between telecommunications operators AzerTelecom and Kazakhtelecom, which defined the final steps in implementing the project of laying an optical IP line under the Caspian Sea. The agreement is a fundamental document of strategic partnership and defines the main terms of cooperation between the two companies within the framework of the previously signed memorandum.

"The Samruk-Kazyna State Fund has been instructed to work out issues of financing the project of laying a fiber-optic communication line on the bottom of the Caspian Sea between Kazakhstan and Azerbaijan by March 10 of this year. The work should be accelerated. The Ministry of Digital Development, Innovation, and Aerospace Industry needs to take these issues under special control," Kazakh Prime Minister Alikhan Smailov said on the eve and demanded to promptly complete all the organisational and financial approvals and proceed to direct work on the cable laying.

It is expected that the actual laying of optics on the Caspian Sea bed will start this year, and the operators intend to finish the project by the end of 2024. Genuine interest in Astana's efforts to force implementation of the TCFO project is shown both in Azerbaijan and in Central Asian states and Türkiye, which is not surprising. The Trans-Caspian cable project is only an initial component for the implementation of a larger undertaking - the formation of the Digital Silk Way, which envisages the creation of a digital telecommunications corridor between Europe and Asia. "This route will enable hundreds of terabits of information to pass through, accelerating the development of storage and processing infrastructure along the entire IP Corridor route. Passage of information flows between Asia and Europe through Azerbaijan and Kazakhstan will create new opportunities for the development of digital business in the region," believes AzerTelecom Chief Operating Officer Sergey Nazarenko.

In particular, Azerbaijan plans, within the framework of the trans-Caspian project, to provide cloud services to local and foreign structures through large DATA-centers, place cache servers in the country, and deliver content to the neighboring countries - the regions of Central Asia, Georgia, Iran, Iraq, Afghanistan, etc. The TCFO project is seen as no less promising in terms of transit of network services and information exchange in the western direction. In this respect, about two years ago work on the development of the western vector of the Digital Silk Way optical highway was started. The initiator of this undertaking, the international NEQSOL Holding group of companies, last year acquired one of Georgia's largest telecommunications companies, Caucasus Online, which owns a fiber-optic cable line running under the Black Sea and providing transit of Internet traffic from Europe to the South Caucasus, and in the near future, this line will be connected to the TCFO cable infrastructure.

NEQSOL Holding is expected to participate in the Digital Silk Way project being implemented by AzerTelecom: this involves creating and managing a new end-to-end IP network between Central Asia and Europe using the existing backbone - the infrastructure of Italian company Sparkle, extending from Türkiye to Italy and on to all major European Internet hubs. In this regard, AzerTelecom, the Azerbaijani operator, signed a memorandum of cooperation with network service provider Sparkle in April 2022.

Caliber.Az