The Central Asian nations of Azerbaijan and Kazakhstan struggled to grow their telecom sectors over the past few years, but steadily improving internet penetration should help to turn this around, according to Research & Markets.
After the oil sector, the telecommunications industry is the largest sector in Azerbaijan, and a major contributor to the country's economy. Government-owned Aztelekom has been the country's main telecom service provider, being directly controlled by the Ministry of Communications and High Technologies (MCHT). In 2017 AzTelekom revealed plans to introduce fibre-to-the-home (FTTH) broadband in an upgrade to its existing ADSL network.
Azerbaijan's fixed-line network provides good national coverage and subscriber numbers were expanding at a modest rate up to 2014. However by during 2015, 2016 and 2017 growth had flattened. Just over 80% of fixed lines are in urban areas, despite 50% of the population living in rural areas.
The mobile market in Azerbaijan has seen moderate growth over the past few years. Market penetration has increased from 107% in 2013, to over 110% by 2017. Further moderate growth is predicted over the next five years to 2021. There are four major mobile operators in the Azerbaijan market. Azercell dominates the market. Bakcell and Azerofon account for the majority of the remainder of the market.
Internet user penetration reached nearly 80% by 2016. Broadband now has a significant presence in the market with over 90% of fixed internet services being broadband by 2017. The fixed broadband market has seen moderate growth over the past few years. Fixed broadband penetration has increased significantly from 2009 onwards. Moderate growth is predicted over the next five years to 2021.
Meanwhile in Kazakhstan, the fixed broadband market remains relatively underdeveloped due to the dominance of the mobile broadband, which is in turn driven by the dominance of the mobile sector. Growth over the past few years has been relatively flat. Moderate growth is predicted over the next five years to 2022 as mobile broadband will continue to dominate the broadband segment.
The number of fixed telephone lines in Kazakhstan is slowly declining due to the dominance of the mobile segment, in particular the mobile broadband segment.
In mid 2017 the Kazakh government announced it will launch its Digital Kazakhstan program between 2017 and 2021, which aims to strengthen the national digital infrastructure and drive economic growth and competitiveness. The scheme is intended to raise internet penetration by 2021 and see the ICT sector contributing significantly to annual GDP by that time.
International Internet bandwidth capacity increased dramatically between 2014 and 2015, almost doubling to 850,000 Mb/s. The market is predicted to continue to grow strongly over the next five years to 2022.
There are three mobile operators in the Kazakhstan market following the merger of Tele2 and Altel. The number one and two providers by market share, GSM-Kazakhstan (K'Cell) and Beeline dominate the mobile market.