Internet transit between Armenia and Azerbaijan: Interdependence and prospects

Internet transit between Armenia and Azerbaijan

The signing of a bilateral commercial agreement on internet traffic transit between Baku and Yerevan marks one of the most significant practical steps towards cooperation in the South Caucasus in recent years.

Under the agreement between AzerTelecom and Telecom Armenia, the two companies will exchange international internet traffic through each other’s infrastructure. The deal also provides for the possible construction of a fibre-optic link connecting mainland Azerbaijan with Nakhchivan via Armenian territory.

Although the agreement comes amid the ongoing peace process, it does not amount to a comprehensive political settlement. Experts say it creates new economic and infrastructure interdependence between the two countries and could strengthen the region’s digital resilience.

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What does the agreement involve?

Under the agreement, AzerTelecom will route international internet traffic destined for Armenia through its network.

In turn, Telecom Armenia will provide transit services for internet traffic destined for Azerbaijan. One of the agreement’s most significant practical outcomes is that it could allow Azerbaijan to establish a fibre-optic connection with the Nakhchivan Autonomous Republic via Armenian territory.

Both operators say the agreement expands the region’s transit routes and improves network resilience.

Azerbaijan’s assessment

Vugar Bayramov, a member of Azerbaijan’s Milli Majlis, describes the agreement as Azerbaijan’s contribution to building lasting peace in the South Caucasus.

According to Bayramov, Armenia wants to diversify its imports of various services, including internet connectivity, and is strengthening cooperation with Azerbaijan as part of that effort. He argues that agreements of this kind also reinforce Azerbaijan’s geopolitical position and help shape a new model of regional cooperation.

Aleksandr Tvaradze, director of an IT company, focuses on the agreement’s technical benefits. He says Azerbaijan will gain an additional backup communications route. Although the country already has a direct connection with Iran, unforeseen circumstances could disrupt that link. Armenia’s existing connections with Iran and Georgia would provide Azerbaijan with an alternative route.

Tvaradze also says Azerbaijan could generate revenue from data transit by taking advantage of its geographic location. He compares the model to the role the country has played for years as an energy transit hub through oil and gas pipelines such as the Baku-Tbilisi-Ceyhan (BTC) pipeline.

He adds that the agreement could attract investment in ICT infrastructure and support the development of data centres.

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Opportunities and challenges

Analysts see the agreement’s main advantage in diversifying the region’s digital infrastructure. Alternative routes for both countries would make their networks more resilient and better able to withstand potential disruptions. From an economic perspective, the deal could also generate transit revenues and attract investment in the ICT sector.

However, experts warn that the agreement also creates new forms of interdependence. Because part of the physical infrastructure will run through the neighbouring country, technical and security issues could become more complex.

The agreement also comes without a comprehensive political framework. Key issues, including amendments to Armenia’s Constitution and the signing of a peace treaty, remain unresolved. As a result, the long-term stability of the arrangement may remain uncertain.

Some observers believe this type of practical cooperation could help build trust between the two countries. Others warn that, in times of political tension, infrastructure projects could become vulnerable targets.

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Outlook

At this stage, the agreement remains primarily technical and commercial in nature. Its success will depend on how effectively it is implemented, as well as on pricing policies and the technical capabilities of both sides. For the region, it also offers an opportunity to strengthen the South Caucasus’s role as a digital bridge between Europe and Asia.

Experts say that if this initiative leads to broader cooperation in areas such as transport, energy and trade, it could encourage deeper regional integration. Otherwise, its impact is likely to remain limited and largely technical.

The internet transit agreement between Azerbaijan and Armenia therefore creates both new opportunities and new challenges. Its main significance lies in the fact that it establishes interdependence based on economic and technical interests. Over time, this could provide a foundation for broader cooperation, but only if political will and mutual trust continue to grow.

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Internet transit between Armenia and Azerbaijan