F. Fatulla

The Ministry of Communication of Azerbaijan Republic admits a unique principle: "Divide and dominate!"
     Two events have recently took place in Azerbaijan. The first one, where the meeting of Ministry's managers and representatives of foreign companies in communication field was held, was organized by the Ministry of Communication. The second one, 1st Investment Conference, was organized by the Ministry of Economic Development and the high-ranking officials of international financial institutions as well as the representatives of foreign companies took part in it. The purpose of both events was the attraction of foreign investors to our country. However the last events raise doubts as to if our government really wishes to see foreign capital in the country. For example, the following information was placed at web-site of AzEuroTel: "The Ministry of Communication of Azerbaijan Republic does not stop its destructive activity concerned with AzEuroTel image detriment and stimulation of negative reaction of all AzEuroTel's subscribers. Yesterday, on 21 of May 2003, 180 circuits connecting subscribers of AzEuroTel to the Baky city telephone network were disconnected. On May 22nd, 2003 the communication circuits were disconnected again and 20 business-subscribers of AzEuroTel in "Landmark" Business Center loose their connection."

1. TAMIN LTD
2. SL-LTD MMC
3. BEYKER MAKKENZI
4. SITA
5. EXXON
6. FILIP MORRIS
7. AIG GASPIAN
8. SUBSIDIARY OF HSBC BANK
9. PRICE WATERHOUSE
10. WINTERSHALL
11. STATOIL ABSHERON
12. AZCOM
13. RAGUS MANAGMENT LDT
14. CONOCO
15. FIRSTDRILL LTD
16. SAIPEM S.p.A.
17. SL-LUXURY WORLD MMC
18. DEVON
19. BRITISH EMBASSY
20. MITSUBISHI
(For information: Azerbaijan-Great Britain Joint Venture "AzEuroTel" was established in 1995 by Azerbaijan Ministry of Communication and British Oil Company "LUKoil Europe Ltd." with equal share holding in 50%. At the same time AzEuroTel is an operator of the modern digital Exchange 492/497/437 - author's commentary).
The general director of AzEuroTel JV tried to explain to "Zerkalo" why one of the present enterprise's founders, the Ministry of Communication, put a spoke in wheels of theirs activity.
- First of all the current situation is that apart from the earlier disconnected 180 AzEuroTel circuits in February, the Ministry of Communication has disconnected additional 180 circuits. And on 22 of May the companies located in "Landmark" Business Center (next to "Old Mill" building - author's commentary) were disconnected by the Ministry of Communication for 3 hours. Thus, the disconnections that took place earlier, for instance, World Bank of Azerbaijan, LUKoil and other companies, were continued. Therefore many our Internet providers were disconnected and reconnected to the units of the Ministry of Communication.
- What is it concerned with?
- Here, I think, a repartition of the property is taken place. And to say more precisely, the Ministry of Communication turns to the concealed form of monopoly demonstration in connection with the announced privatization. The case is that the President, Mr. Heidar Aliyev, has announced to head for a course of market economy and de-monopolization of the main types of state activity.
Privatization in the telecommunication field in the first instance provides the de-monopolization of the Ministry of Communication. Instead of this the Ministry of Communication with all its actions tries to monopolize the international communication, satellite communication and by these actions returning the country back to the 1996-1997 years' model. And the most terrible thing about this is that the present ministry uses illegal, unlawful actions, following the way of elementary brigandage. It even comes up that a cable is cut by axe and in that way cutting our access to the international circuits off.
- But the Ministry of Communication assures that you break the law and all your actions are unauthorized?
- All our actions are permitted. Let's begin with international communication issue that gave a start to "the war without rules". In 1999 the President issued the Decree about permitted types of licensing activity among which was the international communication. Prior to this decree we got our international communication through Aztelecom and, in principle, had to pay 75% of our international communication incomes. But in fact we transferred to Aztelecom not 75% but all the 90-92%. Because the international communication consists of incoming and outgoing calls. And if from outgoing channels we paid 75% and 25% remained for us, then nothing remained from incoming channels for our company, all incomes from incoming communication remained to Aztelecom. The total sum of the incomes transferred by us to the Ministry of Communication makes 92 %.
In such conditions it was impossible to refund investment and credits. Moreover, AzEuroTel JV had run into debt to Aztelecom about 20 billion manats. Of course after the President Decree we had applied to the Ministry of Communication for a license. But the ministry referring to absurd pretence refused us to issue a license for international communication. Then we had brought an action against the Ministry of Communication to the Economic Court and won it. Then the Ministry of Communication had brought an action against us to the Appeal Court that we won again. Then the Ministry of Communication had brought an action against us to the Supreme Court, and here again, as they say, the truth has won. In other words all the justice instances have proved the accuracy of our actions.
     We were acting strictly in accordance with the President Decree. However for the present day the Ministry of Communication has not fulfilled the decisions of Supreme Courts of the country as yet and does not intend to carry them out. Moreover, with all its actions the Ministry of Communication tries to prove that we use the international telephone communication illegally and are not its operators. While on the basis of the studied documents we were accepted to the CIS Operator Council joining 11 countries as well as to the Sector of the ITU International Operator. And in Azerbaijan also we are perceived as an operator, including by the Ministry of Finance, the Ministry of Tax and the Ministry of Economic Development etc. By all except the Ministry of Communication.
- Evidently your dispute has a long history. Why there is such a splash of emotions then?
- The question is that from the beginning of present year such actions started to accept openly abnormal forms. There is unprecedented in world practice interruption of communication organized by the Ministry of Communication in February - March of this year by means of the physical damage of channels of the President Organ, Cabinet of Ministry, Embassies and Foreign companies. At the same time Ministry of Communication accompanied all the actions with the false information that AzEuroTel JV did not have any right to provide international telecommunication services and has "problems with their technical equipment".
There was the Commission of Cabinet of Ministry created by our request that has proved that the interruption that took place at Exchange-50 were organized by Ministry of Communication. However the employees of the Ministry of Communication did not allow the members of the Commission of Cabinet of Ministry to access the equipment to switch disconnected circuits on.
- Do you mean that the Management of the Ministry of Communication ignores even the Cabinet of Ministry?
- Actually. Well, let's suppose I did not say it so openly. But it is easy to guess. We informed both the Cabinet of Ministry and Ministry of Economic Development. However there is no reaction untill today. Did anybody ask the Minister of Communication, Nadir Akhmedov, what is the reason that international circuits did not function? Why anybody does not ask the Minister of Communication? Because of this reason the Ministry of Communication becomes more active in its actions every time.
- But these actions should cause serious economic damage to you?
- We provided Consortium AMOK with all communication services. The Ministry of Communication put pressure on them that continued till they were forced to renew their agreement with the Ministry of Communication, and the latter now provides them with its services at the reduced rates. "Artel" that used Internet also was forced to switch to them because of the continuous pressure and interruptions. Some embassies were forced to use other automatic telephone exchanges avoiding the next interruption. Our direct damage from the Ministry of Communication actions is not less than 3,5 million USD, and the moral damage is more than 10 million USD.
- Are you going to bring an action against the Ministry of Communication?
- All these events took place in February, March, April, it was a period when the President left for a treatment. I did not want to brawl, destabilize a situation, it would be abnormal. You know that after the president interference these international circuits were switched on after the first interruptions. And as the president left for Gulkhane, channels were disconnected again. It is not clear what is going on. In any other state there has to be applicable court decision be decided to cut even single circuit off. And here 180 circuits were disconnected at once and you are said - endure and work as you like.
To tell the truth, after last year's autumn President Decree about noninterference in business activity, it seemed that the situation would be adjusted.
But from that time seven times the Ministry of Communication has brought an action against us. Although "Stop proceedings" was clearly written in the President Decree. By the way, five claims against us from the Ministry of Communication were repeated on already decided court solutions. And the most surprising thing is that the courts continue to accept these claims. That is to say that both the Ministry of Communication officials and justice officials equally do not fulfill the President Decrees.
Here we have a strange situation: instead of controlling the fulfillment of the President Decrees the government officials are engaged in commercial organizations. We demand from the officials to implement the President Decrees because you see, three inspections from the beginning of the present year for four and a half of one month are so much. Sirs, finally there is the President decree! Stop!
The Ministry of Economic Development looks at these disgraces and remains aloof from these problems. Although according to the same decrees it should directly defend businessmen and assist them.
I think within the next ten days we'll probably apply to the International and Economic Court. Now engaged by our company independent experts and we calculate incurred damage.
- Perhaps your problems are concerned with your founder - "LUKoil"?
- I would not like to mix politics into economic problems. However, if this is a case, let them to clarify it among themselves. We established the expensive technical equipment at a total sum of 15 million USD, 250 persons, the Azerbaijan citizens are employed by the joint venture and we work for our nation. This is the only joint venture, where there are no foreigners employed. If there is the claim to "LUKoil" they have to solve all problems between each other. What is the blame of subscribers that use 492/497/437 telephone lines? There was no claim to our subscriber department during 7 years. For 5 years we have transferred 55 billion manats to state budget. Only 20% of this sum is for covering an expenses concerned with the equipment installation, and 80% remain to the country. By the way, we were awarded twice with international ISO-2000 superior certificate for the qualitative communication in Geneva. Now we are not guilty that the circuits are cut off and our subscribers are not able to access to another exchange.
- So it proves that the reason is Ministry's craving for a monopoly?
- Ministry issued a license allowing our activity, so it has to be responsible for its subdivisions that cause damage to us. Say, Baku City Telephone Network (BCTN) cannot take a decision to cut our communications on its own. It's evident that this decision was agreed with The Ministry of Communications and was carried out by its instructions. It's being discussed much now about attracting of investments. However, at the time we were mounting our first satellite dish, the Ministry gave us a permit, provided us with an area and premises at Exch.-21 (now Exch.-50). And after that we received a permit for equipment import. The Ministry applied to international organization of satellite systems "INTELSAT" in order to get frequencies for "AzEuroTel". We operate for already four years. And now the Ministry in fact says that - "take your dishes away". "But what is the matter?" - we ask. And they reply - "Just take them off and that's all".
After the judgement refused the Ministry in their request to remove satellite terminals, the Ministry undertook another step - now it wants to realize this decision through the Committee of Tariffs, suggesting to increase tariffs for utilization of satellite terminal by 60 times! That is to say that if now we are charged 1,000 US$ monthly, soon this figure will reach 60,000 US$! This is just incredible!!! Where is a logic? You see 1,000 US$, that is determined for us now, is a highest rate in CIS and Europe! And 60,000 US$:it sounds just absolutely ridiculous! And the most interesting thing about this is that nobody asks: "Sirs, are you not able to count?"
- And what about your competitors?
- - That's just the point, here appears the second and the most serious issue of raising the tariff rates. The case is that none of the basic laws of market economy is observed at the present time. There must be equal conditions for all the market competitors. Production structures of the Ministry do not pay this tariff - they have everything free of charge. So what kind of market this is, if one doesn't pay anything and the other is made paid through the nose by increasing the tariff rates?! Have you seen this kind of market anywhere? There is a President Decree on conscientious competition that neatly stipulates all these. After all, remember about antitrust activity. Practically we have whole the package of laws for market economy being passed in Azerbaijan, according to that one can easily work. But government officials do not virtually fulfill anything of these. When I am asked what modifications are required in legal laws from my point of view, I reply: to add into the Criminal Code an item about non-fulfillment by government officials of decrees of the President of Azerbaijan Republic. And specify punishment term of ten years at the minimum. You see, the current situation, when accredited in Azerbaijan ambassadors of foreign countries on all the official events express themselves about non-fulfillment of accepted laws and regulations of the President, including "AzEuroTel", - this is a real disgrace for our country.

"Zerkalo" newspaper 23 may 2003