JOHN ARMLEY General Manager Azerfon INTERVIEW

s Azerbaijan emerges as a center of excellence for information and communications technologies in Eurasia, unprecedented market growth is leading to new competition. This year, a third operator, Azerfon, will launch its GSM mobile services and shake up this exciting market on a whole new level. Siemens, Extel, and Cellex Communications each hold 30 percent stakes in the joint venture. Internet provider Aztelekom, operated by the Ministry of Communications and Information Technologies, owns the remaining shares.

John Armley (INTERVIEW), General Manager of Azerfon, explains that the company has one general strategy: to create much needed competition in the marketplace. “I think it is an ideal location to be in,” he says.

“The GSM market here is at least ten years old. Our objective is to get to where the current leaders are within a much shorter time. To be a credible competitor, we need to secure a good portion of the market in the shortest time possible. We will be more aggressive in penetrating the market.”

This drive for competition is making a splash in Azerbaijan’s telecommunications market, which is today dominated by two big players – Azercell and Bakcell.
The emergence of a third operator owned by foreign capital is part of a wider strategy by the government to develop the telecommunications sector. “Azerfon will breathe new life into competitiveness in the market. The new operator will create competition and will provide impetus for the development of the telecommunications field,” says Minister of Communications and InformationTechnologies, Ali Abbasov.

Azerfon is capitalizing on its position as a market newcomer in these opportune times, with the telecommunications sector in Azerbaijan rapidly becoming more sophisticated. In order to come out on top, Azerfon pledges to invest $300 million over the next two years. Putting this into perspective, it took more than a decade for Azercell’s competitors to channel similar amounts into their operations.

Azerfon has secured a main technical center for services and has embarked on an extensive program to build base stations around the country. Initially, Azerfon’s service will cover Baku and six major cities in Azerbaijan. Looking toward future goals, Azerfon will rapidly increase its network to cover the majority of the population in the next several years. The emergence of a third operator will also gradually reduce mobile costs throughout the country.

With Siemens as its largest shareholder, the startup will be equipped with the latest technologies. In 2006, Siemens supplied GSM base stations to create a world-class network of infrastructure. Azerfon has teamed up with CBOSS, Russia’s largest software producer, to implement network solutions and advanced services for Azerfon’s subscribers. The new entry has also selected major suppliers for its intelligent network platform for service provision and billing. Customers will have access to video calling, mobile TV, entertainment and other top-notch services.