IN 10-15 YEARS ICT SECTOR WILL COMPARE ITS    REVENUES WITH INDICATORS OF OIL INDUSTRY, MINISTER OF COMMUNICATION AND IT OF AZERBAIJAN

 

The prospects of development in information-communication technologies field was discussed February 15 at the session of Caspian IT & Communications Club within Caspian Integration Business Club with participation of Ali Abbasov, Minister of Communication and IT of Azerbaijan.

 

The rapid social and economic development is being observed in Azerbaijan today, said Ali Abbasov, and it is witnessed by local and foreign experts alike.

«Taking into account that the driving force of Azerbaijan's economy is oil&gas industry, we should build the long-range economic development on the basis of related revenues. President of Azerbaijan Ilham Aliyev has set this objective at the recent conference devoted to three years of implementation of the State Program of Social and Economic Development in Regions», Ali Abbasov underlined.

In this respect, the priority issue is the development of oil sector and infrastructure. As used here, information-communication technologies (ICT) are considered the priority issue for the country.

Minister reminded about meeting of President Ilham Aliyev with the world's leading ICT companies (CISCO, Microsoft, Intel) executives through the annual World Economic Forum in Davos on January 26-28. As a result of these meetings, the head of state has set an objective to involve both foreign and local investors in major ICT projects.

A multidirectional work is being carried out in Azerbaijan to complete these objectives. In particular, the talks are held with local and foreign partners to develop ICT industry in Azerbaijan. According to this plan, either in 2008 or in first half of 2009 Azerbaijan's computer network will be rebuilt with consideration of advanced technologies and its subscribers number will grow 2-2.5 times.

The second major project is being implemented in e-government field. At the moment, the talks are being held with the World Bank and Government of Korea regarding granting of $30mln credits by each party on privileged terms. This project will be implemented together with local and foreign IT-companies.

Minister Ali Abbasov called the most ambitious project the one related to creation of Regional Innovation Area (RIA) in Azerbaijan. A consulting company of the US origin has been selected so far. An expert group of local and foreign experts has also been established to design RIAs. These teams are going to submit their proposals to the government for the RIA project in Azerbaijan. RIA project includes creation of telecommunication infrastructure in Azerbaijan, revision of Azerbaijan's legislation for creation of more favorable conditions for IT-companies and further ICT development. «To implement the project, the proposals are prepared for revising both the fiscal and monetary policy of Azerbaijan, in particular covering taxation and custom duties», Ali Abbasov stressed. «Having studied the similar projects and approved international practices, we came to a conclusion that changes are also necessary in Azerbaijan's monetary credit system», Minister went on. Minister considers it necessary to consolidate foreign and local companies as the latter have some difficulties in attracting credit resources.

«Head of state has set an objective to establish ICT Center in Azerbaijan, and RIA project envisages the creation of Information Transit Center», Mr. Abbasov underlined. «In case Azerbaijani Government upgrades the regulations and ensures a transparent implementation system, Azerbaijan will turn into a huge information transit center between the East and the West», Minister said. The RIA project also stipulates establishment of a large computer center in Azerbaijan.

One of main aspects of RIA establishment in Azerbaijan is human resources development. «We have been working in this field so far, and some CIBC member-companies are the cofounders of a Fund supporting training of ICT specialists abroad», Minister outlined. He also mentioned that the state program for training young specialists abroad is about to complete.

Under the RIA project, an international ICT university is going to be establisheds.

«In case if RIA project is implemented we are expecting a considerable revival in Azerbaijan's ICT market», Ali Abbasov said, inviting CIBC companies to join the project in Azerbaijan. Moreover, Minister stated that in 10-15 years success of this program will allow to compare ICT sector's revenues with the indicators of oil industry, which is one of Azeri Government's primary objectives».

The serious advancement in Azerbaijan's IT-sector was outlined at the session by Nouri Akhmedov, Co-Chairman of Caspian IT & Communication Club and President of AzEuroTel JV. He stated that high technologies in ICT sphere are being implemented in Azerbaijan. He also mentioned the necessity of opening state communication channels for private sector, eliminating communication market monopolies, revising tariffs for international calls and subscriber fee. Mr. Akhmedov said that in particular subscriber fee for landline communication in Azerbaijan is 30-35% lower than the cost of services provided.

Elchin Aliyev, Co-Chairman of Caspian IT & Communication Club and President of Sinam Invest, said there are many problems in IT-sector. In this respect, he stated the importance of tax load reduction with regards to IT-sector.

Minister Ali Abbasov said telecommunication services network is quite advanced today. Nevertheless, some kind of imbalance exists between the cost and tariffs for landline phone network.. In this connection, the Ministry of Communication and IT has submitted a new proposal to the Tariff Council offering to introduce a free-of-charge talk limit of 450 minutes per month. Thus, the changes will not affect social groups with low incomes and enable reduce the tariffs for international and intercity calls.

Speaking on monopolies in IT-sector, Ali Abbasov said the possible privatization of state stock in telecommunication JVs is under consideration. The matter is that investors intend to fully redeem the enterprises they are running. In this connection, issues of turning this enterprise into a joint-stock company and selling state stock in them is being considered. He said that Azercell and Baktelecom will be privatized.

The consultants are preparing their proposals on Aztelecom's privatization. The government will possibly retain a small stock.. Minister said the first stage envisages estimating the state share in charter capital, then it will be revised according to international standards and only later recommendations on this property use will be drawn. In the second stage, investors will be involved.

The banking sector representatives have raised the question on establishment of outsourcing in the country. In this connection, Ali Abbasov said this process calls for intellectual centers creation in the country.

Answering CIBC companies' questions regarding licensing, Ali Abbasov said this process is transparent and each company wishing to provide international and intercity phone services may obtain a license. On the other hand, the matter is that such company shall provide quality services.

Telman Aliyev, President and CEO with CIBC, reminded that at the recent conference devoted to three years of the State Program of Social and Economic Development in Regions, President Ilham Aliyev identified IT field to be the priority for the country.

Ali Abbasov answered numerous questions from CIBC member-companies. At the session, Minister of Communication and IT of Azerbaijan Ali Abbasov was given the certificate of Honorary Member of CIBC.