Azerfon Receives Azerbaijan's First 3G Licence

Azerbaijani GSM operator Azerfon has been awarded the country's first 3G licence, according to local media, and intends to launch commercial services before the end of the month. Company Director-General Gido Helbich is quoted by Trend Capital as saying that Azerfon has passed all legal procedures necessary to obtain a 3G licence. Such procedures included the submission to the appropriate regulatory bodies of information on the state of network commissioning, the types of services provided, the extent of network coverage, the technical characteristics of equipment, and the experience of setting up a 3G pilot zone. The licence cost 11,000 manat (US$13,681), and services are to be offered on the 2.1 GHz frequency.

Outlook and Implications

Further 3G Licences Could Be Imminent: The award of a 3G licence to Azerfon is likely to herald the arrival of 3G services on a more widespread basis in Azerbaijan, with market leader Azercell as well as the country's other GSM operator, Bakcell, also keen to roll out the services. It is currently unclear whether concrete plans are in place to award the pair 3G licences imminently, but the fact that the process has finally come to fruition for Azerfon, the newest of the country's operators, gives some cause for optimism. With 6.5 million subscribers in the country at the end of 2008, mobile penetration was around 77%, and is projected by IHS Global Insight to approach the triple-digit level by the end of 2009. Within this climate of growing maturity the market is well-placed for the launch of value-added services that 3G provision would bring.