Azerbaijan ICT

Sector outlook

ICT is the second most profitable sector and second largest recipient of foreign investment after the oil industry. Azerbaijan was ranked 61th out of 142 countries in WEF Global Information Technology Report 2012, posting the best score among all CIS countries for the Networked Readiness Index.

Wireless communication is currently the most active subsector. It has received the biggest share of FDI since 1994, when the first GSM network was launched. There are now 3 private operators: TeliaSonera’s subsidiary Azercell (Sweden), GTIB’s subsidiary Bakcell (Israel) and Vodafone’s subsidiary Azerfon (UK). Some foreign capital was also injected in internet and cable TV providers. Fixed-line telephony remains in the hands of the State but could be privatized in the coming years.

Information technology is still less developed but the country could become a regional IT hub thanks to its highly skilled engineers, innovative SMEs and the presence of major IT companies operating under public or private contracts.

Strategic direction/ specific schemes and incentives

With a view to developing an inclusive information society, the government adopted a National Strategy on ICT 2003-2012 and launched several initiatives:

  • State programme E-Azerbaijan 2019-2012: “e-government”, “e-kiosk” (electronic postal services), “super computer centres” (expertise and information system), “people’s computer” (computers with authorised software provided at below market price on free-of interest credit to low income families); 
  • State Fund for Development of ICT launched in March 2012 under the Ministry of Communications and IT to encourage foreign and local investment in the sector; 
  • Regional Innovation Zones (RIZ) to be launched by the Ministry of Communications and IT: special economic zones (privileges for foreign companies investing with local partners), including a technopark, an international IT university and innovation centres; 
  • Launch of the first national communication satellite Azerspace-1 in 2013 in partnership with US contractor Orbital: intergovernmental mobile phone communications, radio, television, and internet broadcast capacities, accessible from Europe, Central and South-East Asia; 
  • Priority sector for Azerbaijan Investment Company, which invests in greenfield and brownfield projects along with local and foreign co-investors; 
  • Regional Innovative Technologies Academy (RITA): training on information system management and online network governance in partnership with major IT companies (CISCO Academy, Microsoft learning partner and MOS testing centre, ECDL testing centre).

Business opportunities

  • Development of technoparks, innovation centres and export-oriented IT activities under the RIZ scheme 
  • Development of IT and Internet services in regions outside Baku 
  • Internationalisation of local IT companies: market research, start-up assistance, financing 
  • Public contracts: e-government (expertise on public electronic services, application and software development, etc.), development of satellite systems, etc. 
  • Consultancy, IT outsourcing, system integration and software development for oil, telecom, banking and construction companies 
  • E-commerce: development of the necessary applications, connections to the payment gateways
  • Fiber optic infrastructure and services within the Trans-Eurasian Information Super Highway (TASIM
  • Acquisition of soon-to-be-privatised telecom companies, among which fixed-line operator Aztelekom

Some success stories

R.I.S.K (Azerbaijan), which was established in 1993 as a computer assembly and service shop, is now a leading system integrator and professional supplier of computer systems and aeronautical applications with operations in Central Asia and Caucasus.

Azercell is the local subsidiary of the telecom group TeliaSonera (Sweden). Since its launch in 1996 as the first national GSM operator, Azercell has maintained its leading position. The company has more than 4 million subscribers and holds 55% of the market share in mobile telecommunications.

Caspel is one of the largest integrators in Azerbaijan, providing the full range of IT and telecommunications solutions (data transmission, software development, delivery and maintenance of advanced IT equipments). Caspel runs its own fibre-optic network, which covers the entire country.

Siemens Nixdorf Informationssysteme, a leading technology provider owned by Siemens (Germany) has been present in the country for several years and is a founding member of the Austrian-Azerbaijani Chamber of Commerce (ATAZ).

Microsoft (US) opened a representative office in Baku in 2005. From 3 employees at the opening, the staff rapidly increased to 10 people as a result of the strong domestic demand for IT products.

This publication has been produced with the financial assistance of the European Union. The contents of this publication are the sole responsibility of EUROCHAMBRES and can in no way be taken to reflect the views of the European Union.

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