Azerbaijan leads CIS in cell phone use
Azercell’s 500,000 subscriber base set to grow to 700,000

When Azerbaijan became independent in 1991 the nation’s obsolete Soviet-built telephone structure was woefully inadequate. Despite the yeoman efforts by the Ministry of Communications to expand telephone penetration as quickly as possible, it was impossible to meet the pent-up demand for telephone service as rapidly as people wanted it. At the same time, the Ministry had to quickly modernize telephony infrastructure to meet the cutting edge telecommunications needs of newly arriving oil companies. Azerbaijan turned to cellular telephones to help bridge the gap.

In December 1996, the communications ministry completed negotiations with Turkcell, Turkey's largest cellular telephone company and established the joint venture company Azercell.

Through its holding company, Fintur, Turkcell holds almost 65 percent of Azercell. Fintur is also the major shareholder in other GSM operators in Georgia (Geocell), Kazakhstan (K'Cell), and Moldova (Moldcell).

As one of the most successful joint ventures formed in Azerbaijan, Azercell now commands a whopping 84 percent of the market. With almost 500,000 subscribers, Azercell has placed Azerbaijan as number one among the CIS countries in subscribers in proportion to total population, according to World Bank figures.

Moreover, Azerbaijan leads the CIS in mobile telephone coverage. Almost 95 percent of Azerbaijanis can access the cellular network across 65 percent of the country's territory (except the Armenian occupied areas). Azeris can now enjoy all the expected additional services available in the United States, such as call forwarding, caller ID, and text messaging. And, according to company officials, Azercell's reception quality outpaces many other European countries.

Azeris commonly purchase pre-paid telephone service cards which areknown as "SimSim" cards. As the most cost-effective way to acquire mobile communication, the pre-paid card system has fed the exponential growth in subscriber numbers.

Today Azercell boasts seven regional offices, and nine official distributors, 173 dealers, and 438 sub-dealers. The company established 76 payment locations and 2,427 point-of-sales locations throughout the country. Azercell has 228 employees, but according to managing director Erdal A. Otuzbir, generates 25,000 jobs throughout the country. "We are growing together with this country," Otuzbir says proudly. "Now, technicians and other employees the company has trained are providing mobile telephone support for other CIS countries."

Azercell has made great efforts to integrate its system into the international telephone network. The company is Azerbaijan's GSM service provider, and has signed roaming services contracts with 135 telephone operating companies in 68 countries.

The satisfaction level of Azercell’s customers is solid. Frequent company surveys show that 98 percent of Azercell's customers think the company has a positive image, and 81 percent of respondents have been recommending the company to their friends.

"Most people think we are an Azerbaijani company," Otuzbir says.

He explains the reasons for Azercell's success as being based on "good infrastructure and good service" stemming from a $147 million investment in the company. Otuzbir also credits President Aliyev's leadership in seeing to it that proper legislation and regulations were in place, and for supporting the company publicly. The company's phenomenal record of success made it the country's largest non-oil taxpayer for the last two years.

"Now, companies like SOROS and the oil companies are using our infrastructure," Otuzbir says. "Azercell has helped create the modern business climate in Azerbaijan that has allowed the oil companies to do their work."

Azercell takes great pride in its "good corporate citizen" activities and image. The company contributes heavily to supporting the arts and sports. The company also provides support to the refugees, and is a major contributor to a local society known as the "Source of Hope" that shelters orphans and assists in finding homes for homeless street kids.

Looking to the future, Azercell plans to introduce new services which will help expand its subscriber base to about 700,000. The company also sees opportunity in providing broadband Internet services. And early this year it formed an Internet service provider company, Azeronline, for just that purpose.

The company is optimistic about Azerbaijan's future. It sees continued rapid change in Azerbaijan, but believes the Azeri people will take that change in stride.

"Azerbaijan has a wonderful education system, and as a result has very high quality workers, very good human resources," Otuzbir says. "Azerbaijanis still need to recover from the shocks of the first ten years of independence, and invest in their future. In fact, the country needs investments; it needs businesses. There is a very good base for investment; those who come now will have a strong foundation for the future. The vision is right."

As for US businesses, however, Otuzbir states that Section 907 of the US Freedom Support Act is "unfair. It is inhibiting a peace settlement (of the Nagorno-Karabagh conflict). It is preventing US companies from making investments in Azerbaijan, and it is not promoting US interests in the country or the region."