Last updated: 24 Aug 2020 Update History
Report Pages: 88
Analyst: Sebastien De Rosbo
The Azerbaijani economy has a major dependence on oil resources and the ICT industry. The COVID-19 pandemic and oil price slump is expected to result in an economic contraction of 2.2% in 2020, and slow recovery afterwards. The telecom sector is also exposed to the risk of delays in infrastructure and the launching of services based on new technologies, including 5G.
The mobile market is concentrated, with Azercell, Bakcell, and Azerfon together accounting for around 95% of the market. Azercell has trialled 5G, though other MNOs plan to defer 5G until there is greater market demand, instead opting to focus on the extensive reach of LTE to carry increasing data traffic.
The mobile sector has seen considerable development in network expansion, though growth in the number of subscribers has been inconsistent in recent years, partly in line with the economic vagaries. The subscriber base fell in 2016 and 2017, and though it has recovered since the pace of growth is expected to be slower in 2020 in the wake of the COVId-19 pandemic. Growth during the next five years will be bolstered by the emergence of 5G though it is expected to be progressively slower as the market matures and the penetration rate rises.
In line with development in the mobile market, the number of mobile broadband subscribers has grown rapidly over the past five years, supported by widespread rollouts of LTE infrastructure and the promotion of an attractive range of packages by the MNOs. Moderate growth is predicted over the next five years, driven by increasingly faster speeds and, from about 2022, from emerging 5G networks.
Fixed-line broadband market penetration has grown slightly over the last five years. Over the next five years growth is expected to continue to follow the same trend.
BuddeComm notes that the outbreak of the Coronavirus in 2020 is having a significant impact on production and supply chains globally. During the coming year the telecoms sector to various degrees is likely to experience a downturn in mobile device production, while it may also be difficult for network operators to manage workflows when maintaining and upgrading existing infrastructure. Overall progress towards 5G may be postponed or slowed down in some countries.
On the consumer side, spending on telecoms services and devices is under pressure from the financial effect of large-scale job losses and the consequent restriction on disposable incomes. However, the crucial nature of telecom services, both for general communication as well as a tool for home-working, will offset such pressures. In many markets the net effect should be a steady though reduced increased in subscriber growth.
Although it is challenging to predict and interpret the long-term impacts of the crisis as it develops, these have been acknowledged in the industry forecasts contained in this report.
The report also covers the responses of the telecom operators as well as government agencies and regulators as they react to the crisis to ensure that citizens can continue to make optimum use of telecom services. This can be reflected in subsidy schemes and the promotion of tele-health and tele-education, among other solutions.
Aztelekom, AzQtel (SAZZ), AzEuroTel, Azercell, Bakcell, Azerfon, Catel, BakTelekom (BTRIB), Eurasiacom, Fintur Holdings, VEON (Beeline).
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