Azerbaijan's internet market: investment on speed and service Caliber.Az review

By the end of this year, Azerbaijan plans to complete the work on full coverage of the country's territory with broadband fixed Internet. The Ministry of Digital Development and Transport of Azerbaijan intends to bring the minimum speed in the network to 30 Mbps, including peripheral regions.

Nevertheless, so far high network performance is available mainly in Baku and a few large cities, and overall our country ranks 116th in the world in terms of broadband speed. Moreover, Internet users still face speed reduction, connection interruption, other technical problems. In order to address these problems, the board of the ICRT approved the "Indicators of Quality of Services in the Sphere of Communications and High Technologies, including Internet Services".      

In recent years, Azerbaijan has taken several steps to accelerate the digital development of the government, corporate and public sectors in order to transform the economy within the framework of the 4th Industrial Revolution (4IR). This work is fully supported at the level of the head of state, and the most important task here is to accelerate the construction of the necessary network infrastructure throughout the country. Large-scale initiatives to build optical networks in the capital and regions have been underway for quite some time, but it has only been possible to accelerate the Fiber to the Home (FTTH) programme - laying optical fibre directly to consumers' flats - only in recent years.

In the first stage, broadband services became available to residents of Baku, Sumgayit, Ganja, Khirdalan, Shirvan and Mingachevir: high-speed networks based on optical technologies, including GPON (Gigabit-capable Passive Optical Networks), are being actively introduced here, providing most consumers in the capital and major cities with speeds of 30 to 100 Mbps. In the next stage, work was carried out on laying optic cables in other cities and administrative centres of the country, including accelerated work in the liberated territories of Azerbaijan, in particular in Shusha, Khankendi, Khojaly, etc.

According to Aztelekom LLC, in the three quarters of last year, about 600,000 households gained access to broadband fixed Internet, but in general, about 1.4 million households today have access to a high-speed optical network, which accounts for about 49 per cent of all connections. Alas, in small towns and rural areas, and even in some villages of the Absheron Peninsula, a couple of years ago, about 70 per cent of households connected to the network using outdated ADSL technology via a copper cable of telephone PBX lines, and the average connection speed here was 4-5 Mbit/s, which is a little considering modern needs. Due to the lagging regional network infrastructure, Internet access via fibre-optic cable in the regions of the republic was available to less than a third of users at the beginning of last year.

In order to overcome these disparities, the Ministry is implementing several programmes aimed at improving the effectiveness of partnerships between public and private internet providers and cable operators to attract them to develop network infrastructure in the regions. However, it appears that this is far from an easy task.

On the one hand, private internet providers are interested in providing services and expanding their network mainly in large cities, where the availability of backbone optical infrastructure, dense buildings and, consequently, a large number of customers living in the immediate vicinity make their activities more profitable and profitable. In fact, the main burden of broadband network development in the regions falls on the shoulders of state-owned backbone operators Aztelekom and Baktelecom, which invest heavily in laying regional optical lines, including in the most remote villages, and these investments are often difficult to recoup even after 10-15 years.

On the other hand, judging by numerous complaints of private Internet providers, Aztelekom and Baktelecom, taking advantage of their monopoly position in the market, raised the prices for the use of state cable and channel infrastructure, node resources, lease of communication channels, etc.  The fact that such violations took place is evidenced by the decision of the State Service for Antimonopoly Supervision and Consumer Market Control under the Ministry of Economy in July last year to apply financial sanctions against natural monopolies that violated charging norms in the sphere of internet services. 

Alas, these negative processes do not contribute to the improvement of the country's performance in the field of high-speed optical Internet access. Thus, according to Speedtest Global Index, in November last year, Azerbaijan moved up five steps compared to October and took 116th place among 181 countries in terms of fixed broadband speed, with an average download speed of 33.03 Mbps. In terms of fixed broadband speeds, Azerbaijan's capital city moved up four notches, but Baku is still a distant 137th in the global rankings.

Despite some improvement in country positions, these indicators cannot be considered acceptable, given the fact that neighbours in the post-Soviet space demonstrate much better dynamics. Thus, according to Speedtest Global Index estimates, Kazakhstan ranked 96th by August 2023 in terms of fixed broadband speeds, Russia ranked 51st in 2021, while by the end of 2022 Kyrgyzstan ranked 75th, Belarus 76th and Uzbekistan 82nd. In the same 2022, Türkiye, with its long territory and inaccessible mountainous regions, was ranked 76th in the fixed internet speed ranking.

It is to be hoped that this lag will soon be overcome thanks to the accelerated efforts of the Communications Department: by the end of 2024, the Ministry’s subdivisions plan to ensure full coverage of the territory of Azerbaijan with broadband Internet with a minimum speed of 30 Mbps.

Alongside, the country has to solve a long-standing problem of the local Internet market: many private providers do not upgrade network equipment on time, do not increase the capacity of communication channels, but at the same time attract more and more subscribers by "compacting" the channels, which in turn leads to reduced speed, connection interruptions, and other technical failures. State providers also face similar technical failures, putting subscribers in difficulty. Often the speed characteristics of the internet, especially during peak hours, turn out to be much lower than those stated in the paid tariff packages.    

It is relevant to note here that in the recent period, the Ministry has been implementing many measures to strengthen control over the activities of Internet providers, ensure compliance with technical and speed parameters of network connection, and protect consumer rights. In July last year, a decision was made on a quarterly assessment of the quality of services of Internet providers operating in Azerbaijan: this work is the responsibility of the Information and Communication Technologies Agency. Based on the analysis of the results obtained, the Agency plans to carry out consumer-oriented regulation of the telecommunications market in an effort to create a healthy competitive environment.

In turn, on January 8, the decision of the Ministry’s board approved the "Quality Indicators of Services in the Sphere of Communications and High Technologies, Including Internet Services". The document defines the main principles of quality indicators in these areas: efficiency, accuracy, sustainability, accessibility, transparency, non-discrimination, reliability, completeness of information, accountability, confidentiality and security.

In addition, it is planned to improve the quality of services in the ICT sector, including radically improving subscribers' access to the services of service and technical services of providers and other network operators. In particular, it is planned to increase to 95 per cent the share of calls answered by call centres within 20 seconds in relation to the total number of calls, as well as to increase the complaint resolution rate to 99 per cent. Among other things, it is planned to reduce the frequency of complaints related to the provision of services to consumers, as well as help desk and network quality, reliability and accessibility to below 5 per cent, and complaints related to billing to below 1 per cent.  

In order to solve these problems as soon as possible, the legal department of the Ministry has been instructed to submit the new decision to the Ministry of Justice within three days for inclusion in the State Register of Legal Acts.