On Re-privatization in Telecommunications

Probably, one should strictly approach the issue of privatization, not for the interest of "someone", but in view of the aspiration and concern for the many thousands of employees of the country's communications sector.

So, to the well-known case with the Ministry of Communications and shameful cleansing in the industry (in the fall of 2015, where 10 high-ranking communication sectors were tried for almost two years), there were various rumors. They hinted that the owners of the telecommunications of the country have already been determined, therefore, the changes in recent years in the Azerbaijani communications sector may be perceived by some people as a division of the already divided world.

Apparently we should not be surprised if the owner, for example, of the country's mobile communications, suddenly becomes someone's "innocent child," thanks to the so-called "mergers" of some enterprises. Although, in terms of alternative and competition in Azerbaijan, three (or four) mobile operators are clearly better than two!

Let me repeat, the transparency of the privatization algorithm depends on:

• An open decision of the country on the timing of the beginning and end of privatization in communication;

• Branch commissions on privatization, acting not "on orders from above";

• Open competition, including among similar foreign investors.

After all, this process started on March 29, 2001. According to the President's Decree on the beginning of privatization in communications, and after 16 years, they say that "Privatization of Azerbaijan's state communications operators is not on the agenda yet." http://minval.az/news/123601052

Probably, we need total privatization of telecommunications all over the country in order to "rid" of the country's officials from "control" over state communication enterprises, and that they do not put them on "counters" or "racket" (as indicated in the media, according to the events of autumn 2015 year in the Ministry of Communications).

http://musavat.com/news/strana/anons-aresta-eldara-makhmudova-zanimalsya-reketom_303738.html.

Apparently the main thing that, waking up one day, we should not discover that the owner of this good worth billions has been determined in advance by the family scenario.

Such a fateful decision as privatization in telecommunications, apparently, cannot be conducted without open discussion of this issue in the media in advance.

But for this, it would probably be necessary to observe consistency: the existence of an independent regulator of the industry (outside state structures), liberalization, demonopolization, and privatization only at the end of this. After all, the problems that the new MTCHT team has received today cannot be solved at the level of thinking, at which they have been created.

So before the privatization measures are completed, a new independent regulator should be apparently formed in telecommunications to coordinate all private and public companies (competing with each other) in accordance with the laws of a market economy, free from direct control of some circles, let alone the "whim of power ".

In all fairness, I would not want to see the second subsection - long-distance (intercity and international) - share the fate of Baktelegraph and AzEuroTel. But if higher-level government agencies act in such clumsy scenarios, then very soon the third subsection - local (urban and rural) communications of the country - can also face interference in the natural philosophy of development of the communications sector.

Therefore, an independent regulator of the industry outside the MTCHT (state structures) is needed as a guarantor of transparency of the interrelation, mutual settlement and interconnection, where the dark sides and the unrecorded and still non-countable incomes of the communications sector of Azerbaijan (for which investigations were conducted for two years in 2016 and 2017) are hidden.

The privatization process can ensure transparency of the communication market of Azerbaijan and demonstrate to any potential buyer (including foreign) the openness of privatization in the telecommunications market of Azerbaijan. However, this requires the creation in advance of a serious legislative base in the country's communications sector, and in particular with an independent regulator of communication outside state structures.

In Azerbaijan, due to the historical events of the past 25 years - the loss of 20% of the land and the presence of up to a million refugees - it seems that one should approach very cautiously to the question of privatization in telecommunications, regardless of the interests of higher structures that have changed several times (the last one on 15.01.2016). The issue should first of all be tackled from the point of view of the communication sector problem for restoring the communication infrastructure of the territory of Karabakh.

Apparently, therefore, one should not allow each new ruling structure to solve privatization in its own way (or for its owner). Then, the new structure that follows them will begin to rebuild the work that has already been done to its advantage, which can continue uninterruptedly for a long time. The question arises, to what extent the previously done works on privatization in the country's branches have been fair, and if they will not be subject to re-privatization in Azerbaijan.

And the communication sector is constantly being updated due to the rapid development of digital communications and information technologies in the world, and globalization, technological unity, consumer demand, legal and regulatory reforms in the structure of modern society make the communications sector play an important role in the creation of the information community (IC) of Azerbaijan.

It is believed that the privatization of state-owned communications enterprises should be carried out with the technological, economic and organizational readiness of these enterprises, taking into account their organizational and legal management reform, where transparency, openness, fairness, competition, alternative, etc. are required.

It is known that telecommunications is one of the most profitable spheres of the economy in the world. The communication enterprises operating in Azerbaijan (started with telegraphy in 1868) carried out their services on the basis of station, line, underground and ground structures, monopolistically owned by signalmen (represented by the Ministry of Communications). Today, it is the MTCHT that is fully responsible for the use of all material, financial and human resources of communication.

The trust of foreign investors in our telecommunications and their participation in privatization depends on the objective conditions in the country (on liberalization) and it expands as the independence of the regulatory bodies of communication from government agencies grows. Moreover, demonopolization and trust in the communication services market can contribute to the inflow of foreign and domestic investments in the activities of both new and old operators in the communications sector (and we got rid of the independence of AzEuroTel JV).

Therefore, it is required to change the structure of the country's telecommunications in order to launch the mechanism of so-called fair privatization, i.e. the following points are necessary: ​​availability of a really functioning independent regulator of the industry (outside state structures), creation of a real public structure of communication networks for new operators of the country, long-term concept of the development of telecommunications, approved by the Milli Mejlis, start (with active participation of the media) of the privatization of the communications sector of Azerbaijan, etc.

Apparently, telecommunications are strategically important and specific, and the sector"s business problems here cannot be considered in isolation from technical tasks. Therefore, it is possible to understand the sector"s problems if there is continuity of specialists, professionalism and transparency. Particular attention should be paid to the process of demonopolization, in particular, the state monopoly on the country's primary networks so necessary for international communication and not yet available to the private sector.

Transparency is required at all stages of the Azerbaijan communications sector projects to be implemented in order to have everything necessary for the country's digital infrastructure.

Therefore, it is probably unproductive to rely on our public statistics (expressed in a couple of phrases in interviews), and, unfortunately, the reported data probably not always reflect the real state of the sector, and the only reason is an ineffective system for managing industries (the EU has allocated EUR 1.2 million for the improvement of the national statistical system of Azerbaijan). http://minval.az/news/123540645

For detailed and qualified development of recommendations, it seems that detailed information is required from the MTCHT of Azerbaijan itself. It requires an assessment of the real level of the industry and an annual publication of statistics on at least three parameters of the communication sector per 100 inhabitants of Azerbaijan: the number of personal computers, the number of fixed telephones and the number of Internet users. After all, our rural telephone communications are almost 4 times worse than the communications of the capital, which sharply reduces the level of the Internet by regions (although we are talking about a 70% -80% level of Internet penetration), while more than half of the country's population (rural part) have some 20% access to communication networks, with all the ensuing consequences.

Yes, there are great hopes associated with the privatization processes in Azerbaijan. However, in order to take the required pace of the privatization process, it is important to determine the real value of the privatized objects, and also to understand at what level of development our country is, at least compared to the CIS countries, without harming the alternative in the communications sector (and we were the seventh among 11 CIS countries in 2016).

Apparently, therefore, the primary tasks of the communication sector are: inventory of statistics and existing communication networks of Azerbaijan, expertise and technical audit of all applied network solutions of the country, availability of a project (Master Plan) for the phased development of the country's communications network, creation of telecommunications producers in the country, overcoming the weak link - the last mile in the regions (rural communication) of the country...

Apparently, sometimes under the "commercialization" of operators and joint ventures, the state unreasonably (in order to control them) causes state bodies to interfere in their affairs (it probably happened with Baktelegraph and AzEuroTel), forgetting about transparency and the philosophy of telecommunications - equal access of all communication consumers.

In the absence of professional continuity, even "insignificant" technical decisions of the authorities" can lead to the redistribution of the state's means of millions in favor of its private enterprises (apparently something from the events of the autumn of 2015).

Therefore, the qualitative growth of Azerbaijan's telecommunications should be expected no earlier than from 2020 (although I dreamed in 2016 that it would happen in 2018), if privatization of SOEs is completed transparently, and new competitive players (global international operators) appear.