Business consultancy project

Position on the Market.

Azercell` s emergence in the Azerbaijan wireless market happened after two years of the commencement of the mobile communication launch in Azerbaijan. Even though Azercell was a second operator in the market, the company used immense efforts for establishment of the mobile coverage across the country and building technical infrastructure. The substantial financial investment was allocated for the construction of the Base stations and implementing GSM service in Azerbaijan. As a consequence of these intentions within a short period, Azercell became a market leader. According to the data, which was taken from GSM intelligence from Y 2001 since Y2009, Azercell was the complete market leader, and the more than half share of the market belonged to Azercell. The most lucrative period for Azercell was the 2001-2006 period when Azercell was almost the unique player in the market by acquiring around 80% of the market share. However, from Y 2007 after Bakcell LLC` s endeavors for reinforcing the market position through expansion and advancement of the coverage by huge investments, the market share distribution has slightly changed in favor of Bakcell LLC (Bakcell LLC, 2019)
Moreover, the emergence of the 3rd player in the market deteriorated the aggressive competition among players and as a market leader, the most impact was received by Azercell. Starting from Y 2010 on yearly based on the market share of Azercell declined almost 10% and decreased from 54% to 40%. However, despite all endeavors of competitors, Azercell is keeping the leading position and according to GSM data Azercell market share in leveled off in around 43% in the last three years. (GSMA Intelligence Data, 2019).

Figure.7 Mobile Operators Share change from Y 2001

Figure.8 Mobile Operators Share in Y 2019

Moreover, for defining the real position of Azercell in the Azerbaijan Mobile Market Industry, the various detailed industry assessment tools were evaluated. According to the obtained information, Azercell holds the leading position in the Consumers’ market, while Bakcell LLC offering special B2B packages, is a market leader in the enterprises market segment. Nevertheless, Azercell pursues regular activities to offer affordable packs for B2B consumers. (GSMA Intelligence Data, 2019)

Figure.9 Consumer and Enterprise Market Share

Eventually, due to the worldwide voice and data substitutions trend apart from having affordable prices, the expansion of 3G and 4G network coverage and Mobile Broadband capabilities are the key factors in today`s mobile telecom market. The outstanding quality of these services creates a competitive advantage for any telecom provider and sustains the horizontal expansion and market sustainability. Generally, 3G and 4G network coverage and Mobile broadband penetration indicators are strengthening in Azerbaijan and Azercell is keeping the leading position in the particular metrics. Based on the annual growth trend, the mobile broadband coverage of Azercell expresses the upward trend.

Figure.10 Mobile Broadband Share

The aggressive competition occurred between Bakcell LLC and Azerfon, as both networks tried to apply a price-cutting strategy. According to the results of “Brand Equity Research”, which was done by International Research group in April 2019, Bakcell LLC was considered as a company with affordable low prices. While Azercell was ranked as high-quality coverage network operator and Azercell ranked with the highest Net promoter scores (NPS) among four mobile network operators. (Satmetrix, 2019)

Today Azercell covers 99,8% of the country’s population and 80% of the territory of Azerbaijan (except for 20% of the occupied territories). (Azercell.com.az, 2019)

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