A land of opportunity

Jayhun Mollazade, CEO of Azqtel, was a man with a vision. As an Azerbaijani citizen living in the USA he saw an opportunity to dramatically improve the ageing and archaic soviet telecoms infrastructure of the former Soviet state.

Over the past five years, Azerbaijan has put an emphasis on developing its ICT sector and as a result the country now has three mobile carriers along with several ISPs offering ADSL based fixed-line internet connectivity. But while the broadband market was growing by 30-40 per cent each year only one of the local carriers was offering 3G services and Mollazade and his partners saw that there was a real opportunity to offer high speed wireless data services.

At that time though, while LTE had a large amount of buzz and expectation about it, as far as building a real-world commercial network, the only real game in town was WiMAX as Mollazade told “In 2009 there were discussions about LTE at the Mobile World Congress, but WiMAX was more established with certified products and affordable prices – LTE was more like something which may come. [When it did] the equipment, modems, end-user device – all of them were exorbitantly expensive, so we decided to go with WiMAX and to gain a customer base of subscribers.”

Initially, Azqtel’s licence only covered downtown Baku, the capital city of Azerbaijan, but in 2010 the service raised funds and was relaunched under the brand name Sazz, as a service that now covers the metropolitan areas of the capital Baku, and the nearby town of Sumquayit, covering a total of around four million people.

The service currently offers speeds of 10Mb/sec, which is on par with the real world speeds seen in most LTE networks running round the world. The price of 25 New Manat, around US$32, is affordable. Mollazade told that the service has picked up thousands of customers in the past year, and is already cash-flow positive.

However, on a global scale it’s clear that while the winds of technology are driving the LTE ship forward at a pace, WiMAX is virtually dead in the water. What then are Azqtel’s contingency plans for the future?

“We are looking in the next couple of years to be in line with the wireless capabilities of broadband”, admits Mollazade. “But we haven’t made any specific decisions”, he adds. “Technology always changes. Maybe five years from now there might be something different.”

Mollazade tacitly admits though that a transition to LTE is very much on the agenda, though exactly what it does choose to do is tied to what happens in terms of spectrum. As a WiMAX operator, Azqtel has a generous 60MHz of 3.5GHz, and though that’s frequency that isn’t widely deployed for LTE it’s an option it would take up if it could. “WiMAX operators round the world are at 3.5GHz and all of them, including us, are really strongly urging vendors to come up with a migration for LTE based on 3.5GHz. However, if we decide to go to LTE we would ultimately require LTE licenses if 3.5GHz is not going to work for us.”

“It’s all going to depend on a number of factors. Whether LTE will be available on 3.5GHz or not, whether we can acquire 2.6GHz or 2.3GHz or 700MHz frequencies. Or whether we need to skip all of this, and wait for LTE Advanced. We are weighing all options. But at the moment the customers in Baku are happy with what we are offering.”

In particular they are happy with the fully unlimited service that they currently enjoy. Is that a situation that Mollazade thinks is sustainable going forward? “It’s a true unlimited. In our legal contracts we warn that we may restrict user torrents, but quite frankly at this early stage, we don’t have any policies. As an operator we will be looking into given priority to VoIP over browsing and over YouTube, so at the moment we are looking at different technologies that will give us a DPI solution. However, at the moment with WiMAX we think we can keep unlimited. That gives us an advantage. The other carrier’s unlimited [services] are twice as expensive.”

In the meantime though, the focus is on expansion with the aim to move beyond its current city limits. “We are planning to expand nationwide. We have secured some contracts on education, in health and sports. We are planning in 2013 to go beyond the capital. Azerbaijan has a developing economy, but there is a need for broadband in the second, third and fourth cities. And we have a plan to deliver triple-play across the nation.”

Mollazade is quick to highlight the advantage its service has over the rival fixed-line ADSL services. “ADSL customers have to wait for a couple of weeks for it to come to them. And they normally get half [the performance] that they pay for – and we add a nomadic experience. So for a quality, speed and price perspective I think we are more competitive.”

The big challenges over the next 12 months Mollazade says will be keeping a close watch on capacity, particularly as its customer base grows in order to maintain the three pillars the company is based on, good service, affordability and good customer support.

Mollazade is enthused about the possibilities that Broadband Middle East and conference, taking place in Dubai in March will provide, such as the chance to learn first-hand about how others in a similar position have dealt with change. “We are also curious to know about the experience of others, so we are looking at Sprint and Clearwire and P1 and Yes in Malaysia.

He also is enthusiastic about selling the benefits of the Azerbaijan market, which with its oil and gas economy presents an economy with great investment potential. “The market has not reached yet its potential in terms of its subscribers. It’s still in play, and I would urge investors and technology groups and applications service providers to look at this market with more attention. It’s has huge infrastructure development based on oil and gas cash. There are opportunities here.”

Jayhun Mollazade, CEO of Azqtel is speaking on Day One of the Broadband MEA conference, taking place on the 25-27th March 2012, at the Westin Mina Seyahi Beach Resort and Marina, Dubai, UAE. Go to the website now to register your interest.

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