The Business Year

Prof. Dr. Ali M. Abbasov

AZERBAIJAN - Telecoms & IT

Goals in a Row

Minister of Communications & High Technologies, Azerbaijan


Ali M. Abbasov has had a long career in the field of IT and electronics, which started with a PhD in the field of Microelectronics from the Ukrainian Academy of Sciences. He was the Director of the Institute of Information Technologies of the National Academy of Sciences of the Republic of Azerbaijan from 1991 to 2000, and Rector of Azerbaijan State Economic University from 2000 to 2004. He joined the Ministry in 2004, and also continues as a member of the Strategic Council of the Global Alliance for ICT development since 2008, and recently took on the responsibility as Commissioner of the Broadband Commission for Digital Development.

"The formation of a strong ICT sector in Azerbaijan in the next 8-10 years is one of the directions of our global development."

What has been 2013 Year of ICT’s legacy in terms of improving interconnectivity and advancing the use of technology in the country?

The year opened up new opportunities for the future development of the ICT field in Azerbaijan, and was fertile with a number of distinguished events. HE Ilham Aliyev, the President of the Republic of Azerbaijan, declared 2013 as the Year of ICT and, once again, emphasized the ICT sector as a priority for ensuring the reliable socio-economic development of the country. On February 8, 2013 Azerbaijan launched its first telecommunications satellite, Azerspace-1, into orbit. This was one of the greatest achievements that Azerbaijan has accomplished since its independence. Azerspace-1 enables us to render telecommunications, internet, television, and radio broadcasting services to Europe, the Middle East, Central Asia, and Africa. Now, all of the state TV channels of Azerbaijan and some private channels are broadcast via Azerspace-1. The transition to digital broadcasting has almost been completed in the country and, currently, 96% of the population can access digital TV broadcasting. Enormous actions have been taken to enable citizens to benefit from the opportunities created by the application of state-of-the-art technologies. Consequently, 70% of the population uses the internet, half of which are broadband internet users. There are 110 mobile subscriptions for every 100 people. The application of 3G and 4G technologies is also being extended. Preparatory works for the implementation of a project to install a fiber-optic network, making providing high-speed broadband internet services through the “Fiber to the Home” project possible, have been already completed and the project will be implemented this year. With the successful implementation of the project, internet access at speeds of 10-100 MB per second will be provided to the whole country, including rural areas. Last year will also be remembered for the foundation of the Azerbaijan Information Technologies University. Approximately 60 students with high admission grades already study at this university. The competence and experience gained at this university will enable young people to meet the demands of an information society as well-qualified specialists. There have been some great achievement as a result of the development of e-government. The usage of e-signature and e-payments has been largely extended and the quality and coverage area of e-services provided to citizens by state bodies on a one-stop shop principle has been increased. With the view of the further continuation of legal and expedient measures in this field, state programs on the extension of e-services in state bodies in 2014-2016 and the development of e-government have been drafted and are planned to be adopted this year. Considerable steps have also been taken regarding the provision of information security in the country. The State Agency for Special Communications and Information Security, and the Electronic Security Center, have started their activity with the purpose of improving works being carried out in this field, protecting the information resources and systems of state bodies from possible threats, and raising nationwide preparedness and awareness on cyber security. Evidently, outstanding works have been carried out in the field of ICT in 2013, thus making the Year of ICT successful in Azerbaijan. I am confident that all the initiatives and the results that we obtained over 2013 will increase the role of ICT in the overall development of the country.

Startups play an important role in creating an innovation-driven culture. How does the Ministry support startups and entrepreneurs active in ICT?

In order to reach our macroeconomic goals in the ICT sector, we have to firstly develop the ICT industry and ICT businesses in the country. In this regard, supporting the smallest business units, i.e. startups, as well as other entrepreneurs, carries much importance for the development of the sector. As a Ministry, we have carried out specific tasks for this purpose. In order to provide financial support to startups and other business units in the ICT sector, a State Fund for the Development of Information Technologies was established under the Ministry. Starting from this year, the Fund will financially support business units via grants, long-term concessional loans, and direct investments. Additionally, ICT companies can take advantage of the special tax and customs incentives of the recently established High Tech Park. Moreover, the Park has a special business incubator meant to support the successful development of startups through an array of business support resources and services.

“The formation of a strong ICT sector in Azerbaijan in the next 8-10 years is one of the directions of our global development.”

Could you elaborate on the significance of Azerspace-1?

Azerbaijan attaches great importance to the idea of the establishment and development of a national space industry over the past few years. Our country has succeeded in launching its first-ever telecommunications satellite, Azerspace-1, into orbit. That was one of the most remarkable events on the 2013 calendar. During the realization of this project, Azerbaijan managed to establish and effectively maintain fruitful relations with leading states in the global space industry. The launch of Azerspace-1 has laid solid groundwork for the formation of a national aerospace sector within the structure of the local economy. Currently, Azerbaijan is successfully commercializing its satellite resources in international markets. To speak picturesquely, our country is in the process of extending its economy into space. All of these achievements have been made possible as a result of the strategic economic policy pursued by HE Ilham Aliyev, the President of the Republic of Azerbaijan, who, in 2010, decreed the establishment of the Azercosmos Open Joint Stock Company, the national satellite operator, consequently providing modern infrastructure for upcoming satellite projects. Thus, today, Azercosmos is efficiently managing the operation of Azerspace-1 from its own premises. The satellite projects of Azerbaijan have been primarily designated for its own needs and expectations. In this respect, and considering the novelty of this sector in the country, we envision a growing demand from local government and private institutions for satellite-related services in the following years. We see great potential for strengthening the position of Azerbaijan in the satellite industry, and have plans in place for future projects in terms of a low-Earth orbiting remote sensing satellite and a second telecommunications satellite. The new satellites, which are scheduled for launch in 2016 and 2017, respectively, will fortify the image of Azerbaijan as a reliable partner in the satellite business community around the world. While the second telecommunications satellite, preliminarily intended to function in Ka-band, will open up new business opportunities and will serve as a back up point for the first one, the low-Earth remote sensing satellite, which will grant Azerbaijan an entrance into the international space imaging market.

Azerbaijan manages the Trans-Eurasian Information Super Highway (TASIM). What is the importance of this project and similar initiatives aimed at improving connectivity in the region?

In the Eurasia region, there is a problem of isolation from the two major internet backbones, which stretch from Japan to New Zealand and North America to Europe. In that respect, Azerbaijan is uniquely located, in terms of ICT, between developing and developed countries. Backed by two special UN General Assembly resolutions, the TASIM project was created in order to get closer to the level of developed countries. The TASIM project will connect Hong Kong with Frankfurt, and will thus provide high-speed internet to the large Eurasian region. On December 3, 2013 the participants of the project signed an MoU in Baku, Azerbaijan. The document aims at outlining the further implementation of the project and determining the participants’ roles and responsibilities, financial expenditures, and legal status. However, the establishment of information highways is not the only important task. Their appliance to advanced development such as the introduction of e-education and e-health carry as much, if not more, importance. Therefore, we need cooperation between countries and between different sectors such as governments, businesses, and society. We believe that the business community is willing to cooperate; however, we sometimes face barriers from individual governments. For this reason, the third UN General Assembly resolution of September 4, 2013 (A/Res/67/298) unanimously supported the creation of the Eurasian Connectivity Alliance (EuraCA), which will serve to strengthen and develop relations between two countries involving government participation in these projects. EuraCA will contribute to the creation of an open information society in the region by increasing the speed of internet connections and the number of internet services, and will support economic diversification and competition by creating new ICT enterprises and sectors in the field of software engineering and the creative industries. It will facilitate the emergence of new intra- and inter-regional cooperation areas, for example in the field of trade and entrepreneurial development, and will create a common multi-stakeholder platform for high-level policy dialogue within Eurasia to tackle complex issues regarding the social impact of ICT.

As one of the most interconnected countries in the region, how can Azerbaijan position itself as an ICT hub in the Caucasus?

The formation of a strong ICT sector in Azerbaijan in the next 8-10 years is one of the directions of our global development. Experience shows that firstly becoming a user of ICT technologies, along with other high technologies and services, and then turning into a producer and exporter is a vital necessity in order to join the leaders in the field of ICT and ensure economic development. Only in this way can countries ensure development within the scope of high standards. Today, the need for information services increases continuously in the Eurasian region, and one of our intentions is to become an exporter of all the main information services in the region. There is a need for joint cooperation and allied states today, and Azerbaijan endeavors to become one of these allies. Therefore, in addition to the enhancement of network infrastructure in the region, we are interested in the creation of new, as well as regional, content. The content of digital information is continuously increasing today and large opportunities are provided for information services. In our opinion, the creation of regional content and the organization of information services under cloud technology is effective from an economic point of view and is attractive for investors. There are some initiatives in this direction as well. Preparatory works are being carried out in our country regarding the creation of two centers: the International Internet Exchange Switching Center and the Telehouse International Telecommunication Center, as well as a regional data center for some well-known companies and organizations.

BakuTel is the most important ICT event in the region. How is this a good way of promoting international exchanges?

The government of Azerbaijan views the development of the ICT sector as part of its broader plans to diversify the economy and sees the ICT sector as an opportunity to reduce Azerbaijan’s dependence on the oil and gas segment in the future. Therefore, Azerbaijan is determined to become one of the global players in the ICT market and BakuTel, annually organized under the patronage of HE Ilham Aliyev, the President of the Republic of Azerbaijan, plays a significant role in achieving this goal. Besides being one of the most important ICT events in the region, BakuTel is the largest flagship ICT event in the Caucasus and the Caspian basin in terms of the participation of the region’s key governmental and business executives. During the past two decades, the event has become a springboard for public, private, as well as international organizations and well-recognized international NGOs. It has already proven to be a high-quality professional event and plays a valuable role in facilitating and promoting an irreplaceable business environment for cooperation, collaboration, and partnership in the field of ICT. BakuTel offers powerful opportunities for companies to showcase their latest products, services, and technologies, and introduces them to emerging markets as well as accumulates strategic business relationships between the partners and delineates partnership prospects. For instance, BakuTel 2013 harmonized the participation of more than 300 leading ICT companies from 28 countries and facilitated the involvement of many high-ranking guests, including regional ICT ministers, representatives of several international organizations, as well as representatives of the scientific community. Moreover, I can firmly say that side events such as last year’s Global Cyber Security Cooperation: Challenges and Visions conference, organized with the kind support of ITU, have turned BakuTel into a global platform for agenda setting, sharing best practices, and facilitating interactive discussions on various facets of present challenges and opportunities in the use of ICT at the national, regional, and international levels.

The construction sector is growing at unprecedented rates. To what extent is the Ministry of Communications and High Technologies working to promote smart buildings?

Currently, this field is rapidly developing in the world. More than ever, the application of LTE technology and M2M devices has opened up great opportunities. Whereas today the income related to M2M devices constitutes $200 billion all over the world, it is expected that this figure will be $1.2 trillion by 2022. While the expenditures for smart building projects were $5.5 billion in 2012, this figure is expected to be $18.1 billion in 2014. Evidently, this field will become more developed in the next 10 years. Today, the state-of-the-art telecommunications infrastructure installed in our country and the application of LTE and FTHx technologies offer ample opportunities for rendering new value-added broadband services, smart buildings, and even the construction of smart settlements. A number of companies are already offering their own services. For example, one of mobile telecommunications companies has recently introduced its smart home project on the basis of an M2M platform at the BakuTel 2013 exhibition. Through this project, while away from home it will be possible to control power, gas, and water supply, and home owners will be able to open the door for guests, turn off electric devices remotely, operate the security system, turn on the air-conditioner in hot weather before returning home, and carry out a variety of other tasks. It is even possible to control the smart home by mobile phone from any location in the world. Today, a large smart home project is being carried out in Baku. Located in the center of Baku bay, a preeminent, modern, and large-scale residence will be constructed over an area of 221 hectares. The Ministry of Communications and High Technologies is actively participating in this project. State-of-the-art IT infrastructure will be built and internet speeds will reach 100 MB per second, while telecommunications and multimedia services will be provided to everybody on the basis of FTHx technology. It should be also noted that the necessary infrastructure will be set up in new buildings constructed in Baku to render these services.

What do you expect will be the highlights of 2014 in terms of ICT and innovation in Azerbaijan?

Last year being one of the most successful years for ICT made us aim even higher for 2014. This year, in accordance with our goals for the development of broadband internet, we will give the fiber-to-home project a start and its successful implementation will increase the penetration rate of broadband internet in the country by 85%. At the initial stage, the State Oil Fund of the Republic of Azerbaijan (SOFAZ) plans to allocate AZN103 million ($131 million) for its implementation. Moreover, the digitalization of TV broadcasts will successfully be completed in Azerbaijan this year. All these tasks will lead to us reaching our pre-defined goals and will increase the annual income of the ICT sector in Azerbaijan to $8 billion-$8.5 billion by 2020. Recalling the fact that the first ever computer-to-computer ARPANET link was established between the University of California, Los Angeles and the Stanford Research Institute on October 29, 1969, which initially led to the internet, I would like to use this opportunity to congratulate the global community on the 45th anniversary of the internet. May inventions like the internet promote continuous progress, peace, and prosperity to all the citizens of the world.

© The Business Year – January 2014



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