What goes on in Armenia’s IT sector

What goes on in Armenia’s IT sector


Information technologies and communication. Or simply ICT. This is one of them most frequently used expressions of recent years.

It’s among our economic priorities, and being poor in natural resources we link our economic future with this very branch. Even Ministry of Transport and communication was “modernized” by adding “IT” expression in it.

How does ICT develop in Armenia and is growth temp in line with the number of delivered speeches?

Some identify ICT statistics with indices of communication. However, it isn’t correct. Communication comprises a part of ICT, however, other types aren’t involved in it, e.g. software.

National Statistical Service of Armenia from 2009 each quarter sumps up and publishes main indices of ICT. Those indices are given in section “Curious statistics”.

We have summed up results of recent 5 years: 2012-2016. As you may see in Chart 1 in 2012 and 2013 ICT recorded respectively 6.8% and 11.7% growth. In 2014 0.5% decline was recorded, and in 2015 it more deepened—0.7%.

Only in 2016 growth started to restore, although by a rather modest index—1.1%.  In 2016 volume of ICT comprised AMD 238.1 million (4.7% of GDP).

Of course, by such temps one can’t have hopes to “turn the world upside down” through IT. Technologies are sharply developing and their share in economy increases more and more. Of course, declining indices don’t contribute to suffer that temp.

However, everything isn’t that bad, as it may seem at first glance. Besides general indices the National Statistical Service of Armenia gives separate indices of information technologies and communication.

As you may see in the period of 20112-2016 the field of communications recorded decline, and IT has grown.

Thus, if in 2012 proceeds of the field of communication comprised AMD 165.2 billion, in 2016 they dropped to AMD 143 billion. And the so-called “pure” IT volume was doubled reaching from AMD 48.7 billion to AMD 95 billion.

As a result, share of “pure” IT reached from 22.8% of 2012 to around 40%.

And decrease in proceeds of the field of communication is an explicable and ordinary phenomenon. The point is that as a result of digital technologies and the internet subscribers refuse “classic” calls and messages, by using Viber, Skype and other similar apps instead.

It turns out that two IT components—technologies and communication are in heated fight, in which the field of communication gradually concedes its positions.

In case of Armenia that dynamics vividly develops this year as well.

Thus, in the first quarter of 2017 real growth of ICT toward the same period of the previous year comprised 15.5%. Volume of the field comprised around AMD 60.6 billion toward first quarter of the previous year—AMD 53 billion.

From which: volume of communication reduced to AMD 31.9 billion from 35.1 (decrease by 3.2 billion), and IT—from AMD 17.9 billion to AMD 28.7 billion (growth by 10.7 billion).

Thus, double digit growth of Armenia’s ICT is conditioned exclusively by “pure” IT sector. As a result of that growth in ICT specific gravity of IT comprises 47.4% (in the first quarter of 2016—33.8%).

In short, serious changes are ongoing in Armenia’s ICT sector. Either harmonic steps should be undertaken in the field of communications (in particular, mobile operators) or they should get along with the perspective of continuous decrease.

By Babken Tunyan

Section Top News