FINAL REPORT: DEFINITIONAL MISSION TO AZERBAIJAN:
AZERCOSMOS – AZERSPACE-2 FEASIBILITY STUDY
August 07, 2013
Space Partnership International
49
provision on isolated occasions. According to the ITU, the number of Azerbaijani internet users has
reached 3.7 million users, or 44% of the population, as of June 2010.
30
This is only expected to
increase as new broadband, wireless, and satellite-enabled services are deployed throughout
Azerbaijan.
Contractor recommends that the FS examine MCIT and other government control in the ISP sector
and suggest plans to help privatize the industry. Access to the Internet is currently controlled by a
very few national top-level internet access providers and operators, which are also part
government-owned. For example, privately-owned but government-controlled Delta Telecom
(formerly Azersat) is the country’s largest satellite and fiber-optic backbone provider, with
approximately 40 ISPs operating in Azerbaijan on a retail basis. Delta is also
the primary ISP in the
country and licensed owner of the international gateway. This results in Delta Telecom supplying
international internet access to 90 to 95% of all users in Azerbaijan, and selling international traffic
to almost all ISPs.
31
Outside of Baku, the state-owned AzTelecom, which is partially owned by
MCIT, is competing for Delta Telecom’s business.
32
As the IT market is not yet fully liberalized,
the commercial ISPs operate under economically inconvenient conditions set by the state
monopolist, which stifle smaller competitors. Almost all of Azerbaijan’s ISP’s purchase bandwidth
from these two operators. The government of Azerbaijan needs to assure that open market legal
provisions and/or licensing requirements for ISPs are in place for new entrants into the market.
Contractor recommends that the feasibility study address plans by MCIT and
Azercosmos to extend
the supply chain in response to the new entrepreneurial opportunities created by the Azerspace
planned use of Ka-band solutions, which can support low-cost, mass-market opportunities, and to
determine whether Delta Telecom, the first company to implement WiMax throughout the country
in 2010, will be the sole provider of licensed satellite services on Azerspace-1.
Internet Privacy
Since 2005, Azerbaijan has treated the internet as mass media and officially lists it as one of the
telecommunications services regulated by the 2005 Law on Telecommunications. At present,
Azerbaijani law does not mandate the filtering or monitoring of Internet content. Freedom of
speech advocates have stated that Azerbaijan’s Government has exerted a range of actions in order
to exert pressure
on content providers, ranging from the use of online application surveillance to the
termination of commercial activities.
33
Contractor recommends that the FS investigate this further, as there has been some public criticism
of emerging government policies. For example, the study should determine whether the
government plans to introduce any laws that will impose restrictions on websites with obscene or
anti-national content. This concern has been raised by advocates’ free speech.
Content filtering is practiced by AZNET, the education and research ISP, but is regulated by an
accepted usage policy and is restricted to filtering out pornographic content.
30
"Azerbaijan". Internet World Stats. Retrieved 3 October 2011. http://www.internetworldstats.com/asia/az.htm
31
“Azerbaijan country profile,” Open Net Initiative, November 17, 2010, http://opennet.net/research/profiles/azerbaijan.
32
Y. Hajiyev, Azerbaijan, European Commission, accessed August 30, 2012,
http://ec.europa.eu/information_society/activities/internationalrel/docs/pi_study_rus_ukr_arm_azerb_bel_geor_kaz_mold/5_
azerbaijan.pdf.
33
“Azerbaijani Activists Under Pressure Ahead of Protest Day,” Radio Free Europe/Radio Liberty, March 7,
2011, http://www.rferl.org/content/azerbaijan_activist_prison/2330387.html.
FINAL REPORT: DEFINITIONAL MISSION TO AZERBAIJAN:
AZERCOSMOS – AZERSPACE-2 FEASIBILITY STUDY
August 07, 2013
Space Partnership International
50
Azerspace-2 - Impact on Environment
As is the case with most gas-exploring countries, Azerbaijan faces the impact of environmental
pollution. The pollution of coastal winds and shores with oil and gas byproducts, as well as in wide
areas where pipelines are being laid, is a concern. Azercosmos has indicated that legal mechanisms
are being drafted to cover the issues of liability for space activities, and that new space laws are
expected to come into force in 2013. These new national regulations are meant to ensure that
satellite operations will not harm the surrounding natural space and terrestrial environment.
Azerspace satellites can be used to monitor pollution levels and activities with
appropriate ancillary
technologies.
Supportive Regulatory Environment for ICT Investment
34
Recent ICT programs that demonstrate compatibility with both the Azerspace-1 and -2 satellite
programs, and which are mandated by the President of the Republic of Azerbaijan, include the
modernization of the telecommunications infrastructure; the increase of digital broadcast network;
nationwide coverage with high-speed cable network; applications development of e-government
infrastructure; and the formation of broadband network covering all residential areas in the country.
Pursuant to the Azerbaijan’s technology strategy and supporting policies, the trend towards
privatization is continuing. As with other governments, shares in ICT companies established with
the state’s involvement were privatized, followed by liberalization steps, reduction of the tax
burden, and facilitation of licensing procedures.
Note: Refer to Privatization Indicators in appendix
Investment in ICT and Infrastructure
Azerbaijan is building a foundation for both domestic and foreign investments together with a
hospitable business climate for investors to be engaged in all spheres of economy. It remains to be
seen how this is carried over to the emerging satellite services sector. Investments in ICT vary,
comprising around 3 to 3.5% of the overall scope of investments made to the national economy.
The country's growing economic capacities bring about further increase in financial support to
ongoing projects in the ICT sector.
Private Investment
Investments to the “parent” ICT sector over the last five years equaled approximately $1.34 billion
USD. During 2011, $525.5 million USD was invested in the Azerbaijan ICT sector, roughly double
the previous year's indices. Mobile phone operators were responsible for the majority of these
investments, 60%, or $313.3 million USD.
Government Funding
The major relevant technology areas funded by the Azerbaijan government include the space
industry, application of nanotechnologies, and the building up of e-government infrastructure, e-
services, etc. The share of the government sector in ICT investments increased from 23.5% to 35%
within 5 recent years. According to the MCIT, SSC, $182.9 million USD was invested in the ICT
34
Source: 2011: Azerbaijan Annual Report