Communications ministry leads Azerbaijan into the digital age
Internet clubs and cafes are springing up everywhere

“I remember during the Soviet era, when there were only a few telephones,” says Minister of Communications Nadir Ahmedov.

For seventy years, it was Communist authorities in Moscow who determined who in Azerbaijan could have a telephone. They didn't allow many. The authorities wanted to control all access to communications, especially communications to the outside world.

Meeting the long pent-up demand for telephones which built up from the Soviet era, and leading Azerbaijan into the digital age of cellular phones and the Internet, have been Ahmedov's chief challenges since he became minister of communications in 1997. The ministry he heads has broad control over wired telephones, cellular telephones, and international telephony.

In addition, his ministry oversees Azerbaijan's Internet infrastructure, the national postal service, all radio and television transmission, and newspaper distributing.

"In the Soviet era, we had a five-year plan that called for the installation of some 60,000 subscriber telephone lines over the entire period." Ahmedov recalls. "At that time, installation of such a number would have been considered a real accomplishment for Azerbaijan. But after we gained independence, we have installed 120,000 subscriber lines per year." The ministry expects to complete the extension of telephone services to the country's small villages by the end of 2001.

Still, demand for telephones has far outstripped the ministry's ability to install subscriber lines, though the advent of the cellular telephone has helped meet the needs. To establish mobile capability, the Ministry formed two joint venture companies, Azercell and Bakcell, about five years ago. Together, these two companies now carry about 35% of the nation's telephone circuits. According to Azercell Managing Director Erdal A. Otuzbir, Azerbaijan now leads the CIS countries in mobile telephone coverage, and rates are the most reasonable in the CIS.

Ahmedov points to international telephony as another area of spectacular post-independence expansion. "In Soviet times, we had two telephone cables going to Moscow, and all international calls had to be routed through those channels. Since independence, we have expanded to some 1500 international telephone channels, 800 of which are via satellite. Our land routes now go mainly through Turkey to Europe and the US."

Such rapid expansion has its costs, however -- international telephone call charges to non-CIS countries are among the highest in the world.

Minister Ahmedov defends the relatively high rates as being necessary to finance the continued extension and updating of telephone services to Azerbaijan's rural areas, and says that rates have been reduced three times in recent years. While some subsidizing of service will likely continue to be necessary for these areas, Ahmedov said the Ministry is also engaged in downsizing and combining less profitable activities into more efficient and better-managed entities.

Internet Penetration Expands
The Ministry estimates that Azerbaijan now has about 50,000 Internet subscribers. This relatively low number is due to the purchase costs of personal computers; while similar to US retail prices, they still remain out of reach for most Azerbaijanis.

To fill the need Internet clubs and cafes have sprouted everywhere in Baku, and in 15 other cities and towns across the country. These clubs provide Internet access at very reasonable rates, and are highly popular.

Ahmedov acknowledges the exploding Internet demand, and says that Azerbaijan is now testing some fiber optic cable installations to bring broadband capability to the country. The ministry is seeking foreign, particularly American, investment to establish manufacturing plants for fiber optic cables and connection equipment. Moreover, the minister says, American credit for 3-5 years to finance further expansion would be welcome.

The ministry moved early into the establishment of joint ventures, particularly in the cellular telephone and international telephone areas. The ministry has a one-third interest in Azercell, and a 25 percent interest in Bakcell. In international telephone activity, the Ministry has joint-ventures companies such as Catel (Caspian-Azerbaijan Telecom), Oltel (a joint venture with Turkey), and AzEurotel, a large joint venture providing international telephone capability between the UK, Russia, and Azerbaijan.

Ahmedov notes that further privatization of Azerbaijan's telephone infrastructure is imminent, including Aztelecom, the company that operates most of the country's telephone infrastructure outside Baku. Currently, there are three joint ventures with U.S. companies in the works, the Minister adds.

Radio-Television Tower Shows Azerbaijan's Innovative Skills
On a high bluff overlooking downtown Baku rises a 1017 foot symbol of the importance of communications in the life of independent Azerbaijan.

Baku's radio-television tower serves as the primary transmission point in the country for the two government television channels. It also transmits most of the government and some private radio stations. The tower is used by the cellular telephone companies to reach a significant area of Azerbaijan, and provides satellite up-links as well.

Even more important to Azerbaijan's current oil exploration, private companies use the tower for radio and data transmission to offshore oil exploration rigs.

Rajab Abdulrahmanov, Chief of Tele-Radio Production Management for the Ministry of Communications, says the tower was originally planned by the Soviet Union. But it was left in a half-finished state when the Soviet Union collapsed in 1991. During the chaos of Azerbaijan's first years of freedom, no work was done on the tower. When President Heydar Aliyev came to power in 1993, however, he made the completion of the tower one of his early priorities.

Accordingly, Azerbaijani engineers made several significant improvements to the tower’s design and took over its construction. The tower was redesigned to provide shielding from transmission radiation.

Abdulrahmanov emphasizes that the redesigned tower has a significant transmission capacity that is not yet fully utilized.