The year 2018 was marked by stabilization of Azerbaijan’s ICT
market after stagnation a year earlier. Thanks to balanced
macroeconomic policy and structural reforms, Azerbaijan managed to
stop the GDP fall and set a course for further economic growth.
In many ways, this was possible thanks to the tightening of
monetary policy and more flexible exchange rate policy. In the real
sector of the economy, the rise in oil prices, as well as the
growth of non-resource sectors of the economy, such as agriculture
and services, led to recovery in aggregate demand and budget
There are a number of prerequisites that indicate the growth
prospects of Azerbaijan’s IT market for the near medium term,
according to IDC (International Data Corporation).
The most positive changes that in the coming years will
significantly affect the economy of Azerbaijan as a whole and the
IT market, in particular, include restructuring of the banking
sector, reforms in the social sphere, completion and launch of
In the medium term until 2022, Azerbaijan’s IT market will
maintain double-digit growth rates largely due to measures taken in
the field of government digitalization, the spread of broadband
internet and digital transformation of the private sector.
The average annual growth rate of Azerbaijan’s IT market until
2022 will be 12 percent (IT equipment will grow 11 percent, IT
services will grow 16 percent and software will grow 16 percent).
By 2022, the volume of the IT market will double in comparison with
the level of 2018 and will amount to $1.6 billion.
Despite that there were few key events in the ICT market of
Azerbaijan in 2018, nevertheless, the year was quite successful.
Commercial enterprises successfully developed, new products and
solutions appeared. The key events of the year are the
Owner of Azercell mobile operator changed
The purchase of 51.3 percent of shares of the company Azertel
[the sole shareholder of the Azerbaijani telecommunications
operator Azercell] by the state company Azintelecom from the
company Fintur became the key event of the beginning of the
Fintur is owned by Telia Company (58.55 percent) and Turkcell
The agreed price for 51.3 percent of Fintur’s shares in the
company Azertel was 222 million euros, which implies the cost of
capital of 432 million euros for 100 percent of Azercell shares and
a company’s value worth 197 million euros based on cash and without
Prior to signing the deal, Telia Company completed a rigorous
verification of the buyer’s trustworthiness and declared
satisfaction with the results of all proper checks and
Azercell’s re-branding is the subject of discussions and this
issue is likely to be resolved in 2019.
Establishment of a center for the study and development of the
cryptocurrency market and blockchain technology
The second quarter of 2018 was marked by the creation of a
center for the study and development of the cryptocurrency market
and blockchain technology, which included interested market
During the year, the Center regularly organized meetings, held
discussions as part of which issues of regulation of the
cryptocurrency market and blockchain technologies were touched
upon, provided advisory services, prepared proposals on issues of
legal regulation of the industry.
If we consider that this is a completely new direction for
everyone, there is an urgent need to exchange experience, study
aspects of the legal regulation of the cryptocurrency market and
using the blockchain technology.
Readiness to use the blockchain technology and SMART contracts
in housing and communal services was recently announced by the
Ministry of Justice of Azerbaijan.
The ministry provides over 30 electronic services, there are about
15 information systems and registries. They include the register of
“electronic notary”, “electronic court”, penitentiary service,
information systems of non-governmental organizations, population
register, etc. The planned project “Mobile Notary Office”, which
provides for the accumulation of all notarial documents in one
case, seemed interesting.
The plans of the ministry also include, among other things, the
implementation of a project related to notarization of an
It was announced that in the future, SMART contracts will be
implemented in the field of public services (water, gas and
electricity). That is, the existing contracts of citizens for
public services will be transferred to SMART contracts, and this
will ensure transparency and will allow preventing the facts of
falsification in this area. Moreover, the citizens themselves will
be able to independently control all these processes.
In world practice, the blockchain technology is successfully
used where the registry is formed. Most of the services of the
Ministry of Justice (registers and databases of the population) are
based namely on them.
Launch of the second telecommunications satellite -
Azerspace-2 / Intelsat-38
A significant event of the year was the launch of the second
communications satellite - Azerspace-2 / Intelsat-38. The countdown
for the launch of the Ariane 5 carrier rocket with a satellite on
board was started on September 26 on the launch platform ELA-3, in
the Guiana Space Center.
Azerbaijan's telecommunications satellite Azerspace 2 reached
its test orbit on Dec. 18. The company noted that the satellite
will be in test mode for about two months, after which it will be
placed in its final orbit of 45 degrees east longitude. At the
beginning of 2019, the satellite will be transferred to the
management of Azercosmos and then the satellite will be fully ready
for commercial operation
Flight VA243 will become the 100th mission for the Ariane 5
heavy-lift launch vehicle and the 300th for the Arianespace
Azerspace 2/Intelsat 38 is designed to provide a number of
telecommunication services and will serve two operators - Intelsat
SA and Azercosmos OJSC.
The satellite will provide coverage of the growing demand for
DTH (Direct-to-Home) satellite broadcasting services in Europe,
Central and South Asia, the Middle East and in the part of Africa
south of the Sahara desert for Azercosmos OJSC.
The satellite will also provide continuity of service from the
orbital position of 45 degrees for the Luxembourg office of the
Intelsat SA, as well as will ensure the delivery of DTH services to
Central and Eastern Europe, the Asia-Pacific region, and the
provision of communication services in Africa.
The Azerspace-2 satellite, worth $190 million, is projected to
bring revenue to Azerbaijan's economy in the amount of $400
The satellite has been built on the 1300-series platform (SS/L
1300). The satellite will be placed at an orbital position of 45
degrees. The lifetime of the satellite in orbit will be 15
The first communication satellite Azerspace / Africasat-1a was
launched into a geostationary orbit at 46 degrees east longitude on
February 8, 2013. This satellite was also launched from the Kourou
space base by Arianespace company.
Issuance of a new generation of identity
The year was also marked by the transition to identity cards of
a new generation, the issuance of which started on Sep. 1. IDs are
issued to the Azerbaijani citizens in stages. The Certification
Center handles requests from personalization centers operating
under the Ministry of Internal Affairs of Azerbaijan. Based on the
received requests, the center prepares certificates and sends them
Three application programs are recorded on the chip of IDs:
personal information about the owner, data of two certificates (the
first one is an authentication certificate, the second one is for
e-signature) and the so-called domestic applications, the functions
of which make it possible to automatically update information about
the ID holder.
For example, in the case of a change of last name or updating
marital status information, this data will be automatically updated
by means of special card readers as soon as a citizen applies for a
service to an authorized body where these devices will be
Citizens having received new IDs can independently activate the
e-signature integrated into them. The term for using the
e-signature is three years.
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