Azerbaijan International

Summer 1996 (4.2)
Page 64

LUKoil Enters
the Telecommunications Business

Slowly but surely, telecommunications in Azerbaijan is being modernized. It's one of the greatest needs in all of the former Republics of the Soviet Union-to streamline the telephone systems. Four years ago, it was impossible to dial directly in or out of Azerbaijan. Typically, you had to make an appointment in advance with the operator, who would then call you back several hours later and place the call. Now, telephone numbers with the prefixes of 98, 93 and 65 can dial international numbers directly without any assistance.

Outdated Equipment
Refurbishing and replacing the telephone equipment is a gigantic undertaking. Much of the equipment dates back to the 1950s. A great deal of it was of the "step-by-step" exchange type, a technology of the early 1900s. At least 50 percent was of the X-bar (cross-bar) exchanges of the electro-mechanic type which was invented in the 1920s [see AI 2:2, Spring 1994. "Strides in Telephone Service" by Kurultay Gözütok].

Azerbaijan's Ministry of Communication does not have the budget to reconstruct the network. Therefore private investment is the only way to provide the State offices, commercial structures, foreign companies and the population at large with high quality, modern and dependable communication.

New Joint Venture - AzEvroTel
These days, LUKoil is getting into the business of telecommunications, LUKoil's President, Vahid Alakbarov, recently signed an agreement with Azerbaijan's Ministry of Communication to establish a Joint Venture, which is called "AzEvroTel." The Joint Venture has leased premises from the Ministry to house the system. LUKoil, is a Russian company, and one of the eleven members of the AIOC Consortium for the development of the Azeri, Chirag and Gunashli fields in the Caspian. They're also involved with other oil development projects for the development of the Karabakh field and are expected to participate also in the Shah Deniz project. [See AI 4:1, 42. Spring 1996, "The Entrepreneurship of LUKoil].

Refurbishing Prefix 92
Currently, AzEvroTel is involved with reconstructing the exchange system for numbers prefixed with 92. At present the first part of the program has been realized. A contract with the English firm "GPT' to supply up-to-date communication equipment has been signed. The reconstruction and repair of a station with an area of 1,905 square meters has begun. Personnel will also be completely retrained to operate the new equipment.

New Prefix 97
The total volume of investment by LUKoil for the reconstruction the Telephone Station 92 and construction of a new station 97 for 20,000 subscribers will be about $10 million. Within a few years, the JV expects to recover their investment expenses and is supposed to turn back the station to the Ministry.

The services offered by the JV include: video-conferencing, satellite communication, paging, mobile phones, radio communication and many other features including consultancy.

From Azerbaijan International (4.2) Summer 1996
© Azerbaijan International 1996. All Rights Reserved.

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