Internet in Azerbaijan - Internet Penetration and Internet Service Providers (ISPs)

Internet Penetration and Internet Service Providers (ISPs)

During the Soviet era, Azerbaijan was a major center for IT development, particularly in the area of process control systems. This legacy left the country with a reasonably large and well-developed technical infrastructure, including several research institutes and a political leadership savvy about the importance of the ICT sector. Internet development is following the pattern typical of many developing countries, with access centered on major cities, particularly the capital city Baku. Overall Internet penetration is rising as a result of the support of the government's ICT strategy as well as the large Azerbaijani diaspora, for whom the Internet is increasingly an important channel for maintaining contact with their homeland. The number of Internet users has grown over the last several years to 3.7 million users, or 44 percent of the population, as of June 2010, estimated by the International Telecommunication Union.

Many Azerbaijanis access the Internet from shared connections, such as their place of work or study, or from Internet cafés (with the latter providing access for 19 percent of users in 2007). The rate of ownership of computers is low (2.4 units per 100 inhabitants), and Internet usage in homes is moderate—it accounts for 41.6 percent of the total usage for 2007, up from 36.4 percent in 2006. For connectivity, some individual subscribers rely on mobile telephony, though access remains expensive, with most using dial-up services as their primary means. Official survey results for 2007 indicate that economic and educational barriers are the main contributing factors for these low figures, with 31.4 percent blaming the high cost of computer equipment and 21.8 percent indicating a lack of necessary skills.

The Ministry of Communications and Information Technologies (MCIT), together with the Ministry of Education, Microsoft, and Hewlett Packard, has started the pilot stage of the National PC Initiative aiming to provide conditions for a rapid increase of the PC penetration rate and e-society development. The state-backed Program on Information of the Education System (2008–2012) plans to provide Internet connectivity to all the schools of Azerbaijan. Currently, more than 200 secondary schools have been connected to the Internet (ADSL).

The cost of Internet service is steadily decreasing: as of 2010, monthly unlimited ADSL connection of 1 Mbit/s cost around USD 20-25 per month. While the cost of international traffic has gone down over the last several years, the cost for usage of the local infrastructure remains unchanged. Approximately 50 percent of the expenses of small ISPs are local connection costs paid to the state-owned company controlling the market. Because these expenses are the same for all providers, they have agreed among themselves to charge end users the same price for unlimited monthly dial-up service. Larger providers temporarily blocked the ISPs that tried to contravene the concerted practice. In December 2007, for example, two small providers—SuperOnline and AvirTel —were blocked by local ISPs (Adanet and IntraNS) while trying to provide service at a lower price for the customers. Shortly after the providers agreed to bring the price of their services into line, the block was lifted. For similar reasons, the larger ISPs blocked another smaller local ISP—Azeronline.

In Azerbaijan, fixed-line telephony is largely centralized in the hands of the state-owned telecom provider AzTelecom, which also acts as a commercial ISP. Delta Telecom (previously operating as AzerSat) is the main ISP in the country, supplying international connectivity to at least 90–95 percent of all users. Delta Telecom also owns the Internet international gateway and sells international traffic to almost all ISPs. The nonprofit AZNET/AZRENA project provides connectivity to the educational and research community and benefits from a satellite channel built under NATO's "Silk Road" project. AzEuroTel started commercial activity as a telecommunications company and thus managed to establish a relatively wide network infrastructure. AzEuroTel and Adanet also have satellite channels to Russia. AzerOnline, which is funded predominantly by the largest mobile operator, AzerCell, has an additional satellite connection to Turkey. The cost of satellite connection is very high because of the monopoly regime set by the MCIT.

Since the second half of 2007, Azerbaijan does not have a free Internet Exchange Point (IXP). Delta Telecom controls the only IXP and charges the same amount for local and international traffic. Providers have not been able to agree on setting up another IXP. The external traffic of Azerbaijan is now 6 Gbit/s, which is a notable increase from the 155 Mbit/s capacity of 2006. Delta Telecom has external fiber-optic connections with Russia via TransTelecom and with Turkey via RosTelecom.12 (Indirectly, Delta Telecom serves Georgian users because a local ISP, TransEuroCom, buys international traffic from Delta and carries it by fiber to Georgia. Through the TRACECA Fiber Optic Cable line, TransEuroCom is connected also to the TurkTelecom in Turkey.) State control over domain name registration is limited. The assignment of the country code domain name ‘‘.az’’ is controlled by AzNic, Ltd., a joint venture between three Azerbaijani firms. The cost for a one-year registration is USD 34. Network Technologies (a subsidiary of IntraNS) is the company that carries out the registration and administration of the top-level domain level ( TLD) in the country. Domain name registrations cannot be done online. Instead, a client is required in most cases to go in person to the offices of the domain name holder. Since 2002, the number of registered domain names has rapidly increased, with approximately 3,000 first-level and more than 6,000 second-level domains registered under the .az domain.

The Azerbaijani Internet population is young, mostly male, and largely concentrated in urban areas: more than 55 percent of the users are people in the age range of 16 to 24, and approximately 70 percent of the users are male. During the 1990s, the official language of Azerbaijan switched from Russian to Azerbaijani, and the script from Cyrillic to Latin. As a result, the number of Web sites using Azerbaijani language increased. Due to the increased use of blogs by young people, several local blog servers were created in the Azerbaijani language. However, most of the bloggers still post on Russian blog servers, and others on Western European and Turkish sites. The Azerbaijani language is currently used on all official government Web sites, as well as within mainstream media and the general Internet population.

Mobile telephony is increasingly popular among the younger population. This is especially the case in rural areas where the fixed-line infrastructure is poor and people are increasingly subscribing to mobile services. The major mobile operator in the country is Azercell with more than 35 percent MCIT participation. Bakcell, the second operator, is relatively small. Azercell recently started offering mobile e-mail services. Both operators provide coverage of the whole Azerbaijani territory (except the territory of Nagorno-Karabakh). In March 2006, the MCIT agreed to grant a license to a third GSM operator, Azerphone.13 Catel14 started operation earlier. The state telecom, AzTelecom, has participation in the two new mobile operators. Azercell, Bakcell, and Azerphone provide WAP and GRPS services. Mobile providers also use Delta Telecom’s external channel for Internet.15