Infrastructure

- How do you evaluate Azercell’s financial performance in 2008?

- As in previous years, Azercell achieved success in 2008. Over the past year, the company has achieved its objectives, as an individual telco, and as part of TeliaSonera. We are confident that this year will also be successful for us. Since Azercell is part of TeliaSonera Group, we can not release the results for 2008 before the parent company does so. I can only say that Azercell is developing in recent years as rapidly as Azerbaijan. In other words, the results for 2008 will be positive in all segments.

- Does Azercell intend to launch 3G services by this yearend?

- There is 3G handsets in Azerbaijan but this technology is not available yet. We are going to introduce 3G technology by the year-end. Azercell Telecom has been ready for 2 years and will make available 3G services for population after regulation-related issues are completed.
This technology will help expand the range of services and improve their quality. Azercell is technologically best-equipped company. The introduction of 3G technology will accelerate the speed of data services and to deliver data services to remote and rural areas and to allow rural population access to a new range of content and applications through mobile phones.

- According to international experts, it is now more appropriate to introduce the 4G technology. What is your opinion of this?

- Just see, what is more appropriate? To introduce 4G directly or a phased transition to this technology, in fact this is the subject of debate throughout the world.
However, as a specialist, I can say that stable content for 4G does not exist yet. In addition, a phased transition is more practicable when introducing new technologies. At the moment, 3G is the most appropriate standard for Azerbaijan’s ICT market because 4G has yet to be developed over the next 5 years.

- What steps will Azercell take to reduce prices for services in accordance with the tariff policy of the Ministry of Communications and Information Technologies?

- As against last year, our prices are significantly low now, and we continue to work towards this. The phased implementation of the process is due to the fact that we are simultaneously expanding our network rapidly. Among mobile operators, Azercell has the widest coverage area in Azerbaijan. Our network covers 99.6% of the population. Through capital investment, Azercell has established more than 1 500 base stations across the country. Just imagine that we spend hundreds of thousands of dollars on the installation of a station that serves 3-4 villages with a population of 500-600 people. The investment don’t come back from subscribers in the region, you need to wait 30-40 years to get it. However, our projects are socially oriented and are part of the activities to make available mobile services throughout the country.
With subscriber base growing apace year by year, Azercell has to date invested about 1 billion dollars. At the same time, we reduced prices, and we are planing to continue this process in 2009. With regard to the fact that our prices differ from other operators’, it is due to the fact that other operators do not invest so much investment and make available their networks in Baku, in the regional centers and in the surrounding areas, providing high-income groups with mobile services.
The other groups of population living in remote areas became deprived of this opportunity. The difference in pricing seems natural because we try to cover the whole country.

- What are your forecasts for subscriber base increase by this yearend?

- Currently, Our subscriber base includes 3.5 million users and this number is increasing every day. Azerbaijan’s population is 8 million, but 1 million live and work abroad - in Russia, Ukraine and Turkey. Despite this, our market share is quite high, and Azercell has advantages over other operators from technical point of view. By regularly expanding our network, we try to gain greater achievements and our primary target is to bring the number of subscribers to 4 million by this yearend.

- In percentage terms, how will Azercell’s coverage grow across territory and population of Azerbaijan this year?


- Azercell currently covers 99.6% of the population with the exception of the occupied territories. One of our main targets is to bring this figure to 100%. With regard to the territory, our network covers 80% of the country, not counting the occupied territories. We wish our occupied lands were liberated, and we could provide mobile services to local people there.

- Did the global financial crisis affect Azercell?

- As you know, the global economic crisis affected every country in the world. There is no country unaffected. However, as a company based in Azerbaijan, we are in luck from this standpoint. As a result of Azerbaijani President’s proper economic policy, companies operating in Azerbaijan are better-positioned to withstand the crisis. This is once again confirmed in the World Bank reports and other indicators for the country’s growth rate. I would note that this is not related only to the development of the oil sector, since a number of oil producing countries are currently struggling with the challenges posed by the crisis.
Over the past 5 years, the non-oil sector growth rate has exceeded the oil sector growth in Azerbaijan. Regarding Azercell, as I mentioned, 2008 was successful and in 2009 we will continue to launch new services and technologies through necessary investment.
Besides, Azercell’s best assets are employees, of which 99.9% are Azeri nationals. Azercell invested $2 million in the development of human resources last year and we continue this work this year. Instead of cutting jobs, we plan to recruit new employees.

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