Liberalization in the communication sector of Azerbaijan

The current telecommunication system of Azerbaijan is characterized by the strong (monopoly) state presence. In the meantime, to address the problem of state"s subdued involvement in the telecommunication sector of Azerbaijan in an effort to trigger its successful and transparent development, it is essential to liberalize the country"s telecommunication market and avail of positive experience of EU and CIS member-countries. In keeping with the international experience of the liberalization of the communication market, it is imperative to make steps aimed at converting enterprises into joint-stock companies, creating an independent regulatory body and liberalizing international and interurban communication markets to thus improve the situation in in the communication sector of the country.

At present, world"s leading countries, including the European ones, are practically favoring the necessity and, most importantly, the expediency of demonopolization and liberalization of telecommunication services. Thus, the liberalization of the communication sector calls for implementation of legislative, political, economic and technical projects aimed at transforming the current monopoly communication market in the countries of Eastern Europe, particularly, in Azerbaijan.

It has to be kept in mind that the liberalization contributes to radical transformation of political, organizational, technical and, most significantly, technological aspects of the activity of national telecommunication operators in the Republic. The point is that the liberalization displays the ability of free competition in raising effectiveness of communication sector as a key factor of market economy to open the way to privatization of telecommunication sector.

As is known, a decree of the President of the Azerbaijani Republic dated March 29, 2001 provided measures to start the privatization and, hence, preliminary liberalization of the country"s communication sector. A question arises: over 17 years we cannot complete rating performance of enterprises of the Ministry of Transport, Communication and High Technologies (МТСHТ).

The analysis of privatization processes in East European and CIS countries is indicative of the following:

• creation of non-state independent sector regulator;
• formation of necessary legislative base;
• restructuring of this extensive and priority sector;
• anticipatory liberalization of communication markets of these countries;
• transparent mechanism of privatization;
• redistribution of communication sector property, etc.

At present, no large-scale privatization of state operators has so far started in Azerbaijan even despite activities of private and joint communication enterprises in the country (Ultel, Bakcell, AzEuroTel (a thing of the past), Azercell, CaTel, etc. To all appearance, this is explained as being due to investment unattractiveness of the sector or due to some risk.

The lack of interest in the national operator on the part of foreign investors is explained as being due to the lack of some conditions:

• normative-legal base of privatization;
• -state communication regulator;
• lack of liberalized relations in the sector;
• financial guarantees for new investors, etc.

Of course, a fundamental component of the liberalization process is an institute of independent regulator of telecommunication as an independent body in charge of coordination of total or a part of communication sector of the country (not operator as is our Communication Administration of Azerbaijan in the person of MTCHT,).

In all probability, non-state independent regulators are in charge of tremendous quantity of reforms in the communication sector of the country and, first of all, a fair resolution of of privatization process. The most important thing is to provide services in compliance with state and public interests.

Below-quoted are driving factors of fostering the liberalization of communication sector and information technologies of Azerbaijan:

• attraction of private capital (not only national) with a view of modernization of communication networks of the country in an effort to introduce new communication services;
• introduction of innovation technologies with high quality of consumer services;
• entry into transnational networks for delivery of high-quality international services, etc.

The experience of some East-European countries displayed that successive liberalization leads to the transparent and competitive privatization of national operator. The liberalization really contributes to the scientific-technical progress and, most important, increase in receipts from national operators to the national budget.

Therefore, the liberalization process at the telecommunication market of Azerbaijan is expected to give impetus to the beginning of fair privatization process of country"s national operator.

Nowadays, various international institutions have gone to considerable lengths to facilitate the privatization of national operators and the liberalization of communication market services for developing countries (particularly, the European Union and International Union of Telecommunications - IUT).

To my thinking, every region of Azerbaijan is worthy of high social standards (schools, mail, shops, first-aid posts, etc.). However, an access to minimum information resources and standards is required today for receiving services of telecommunications, Internet, centers of distant learning up to the system of electronic government, banks, trade, etc.

Nowadays, total volume of international standards and recommendations needed for communication sector makes up tens of thousands of pages while we, here in Azerbaijan, we no own norms of technological projecting acceptable for urban and rural telephone networks of the country.

In all probability, an ultimate aim of the evolution process in informatization is country"s complete joining to the Global Information Infrastructure (GII), so it is necessary to be ready for changes of this sort.

The essential point to remember is that the information community in itself is not a guarantor of country"s economy or independence survival; however, it is not possible to overcome "digital divide" without taking measures above. The question is that in the nearest future cyber conflicts of modern life will affect all spheres of human life to plunge the society into the war of "all against all". An eloquent testimony to this is a hybrid war between Ukraine and Russia today.

It is commonly known, the privatization of the communication sector has been underway for 17 years, and efforts are being made to appreciate main enterprises of the Ministry of Communication to be privatized. To attain the goal properly and start the privatization process, it is crucial to specify the value of privatized facilities and realize today"s level of telecommunications of Azerbaijan as compared with neighboring countries.

In considering the latest 25-year developments in Azerbaijan, including the loss of 20% of lands and approx. 1 million refugees, the matter has to be approached softly. That"s why separate projects and reports on communication sector cannot provide a comparative picture in the given sector, for they retrace the communication development inside the country only. For this analysis, it is essential to use statistical data of the Executive committee of regional community for CIS countries in the field of communication. The regional community data trustworthy, for the digest is submitted to numerous international structures, including the International Telecommunication Union.

It is generally known that as far back as in the end of the 20 century the sensible world declined from state monopoly in telecommunication when performing the demonopolization, liberalization and privatization of communication sector while some delay on this track caused by the state monopoly is just a long-term damage for its formation.

It is, perhaps, "active involvement of the state in economic activities of telecommunications" of Azerbaijan (for instance, developments of autumn 2015) is sure to hold the development of one of the most dynamic and fast developing sectors of country"s infrastructure.

The EU countries" experience corroborates a positive interrelation between the liberalization of communication market and its dynamic development, so the strategy of telecommunication development should be directed to the creation of alternative, competitive and attractive investment environment in the communication sector of Azerbaijan.

In view of the foregoing, one can safely stress the necessity of completion of the liberalization and reformation of the communication market in the nearest future.

One has only to think about liberalization of telecommunication market in Georgia in 1999-2000 which enabled anyone who feels like it to get a license for services of local and international communication. Suffice it to say that there are above 20 alternative international telecommunication market operators and more than 30 licenses issued for local communication services.

Hence, it is necessary to change the structure of Azerbaijani telecommunications to activate a mechanism of the so-called "fair liberalization" of country"s communication sector. In other words, a new independent regulator has to be formed in the telecommunication prior to privatization measures and start liberalizing the communication sector for subsequent coordination of the activities of all private and state companies (competing with each other) in line with laws of market economy and independently from anybody"s direct control (at a family"s whim).

It is essential to ensure a right of country"s every citizen to information and communication where a citizen is sure to get a license for required service markets and be heard by higher-ups.