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The Azeri government is planning to restructure and merge two major state-owned telecoms companies, Aztelecom and BakTelekom, in 2014, as a preliminary step towards privatisation.

Proposals to turn the two companies into joint stock companies have already been drawn up by the Communications and Information Technologies Ministry (CIT) and State Property Issues Committee, said CIT Minister Ali Abbasov on December 6, according to Azernews. They will then be merged into a single company.

The resulting holding will then be privatisaed, the official said. Ultimately, the CIT ministry plans to exit its holding in all telecoms companies, and act only as a regulator, he added.

Privatisation of the fixed line operators has been on the agenda for several years, with the government first discussing the issue in 2007. Abbasov told Russian journalists in February 2011 that the assets would be sold for no less than $1bn. Later the same year, Turkish companies were reported to have expressed an interest.

Azerbaijan has already liberalised its mobile telecoms sector, but the country's main fixed line operator Aztelekom remains in state hands. "The country has generally made good progress in implementing its plans to privatise state-owned telecom enterprises; however, the critical privatisation of Aztelekom had again been postponed - for some years," says a report from telecoms research site Budde.

The report notes that fixed-line penetration was just over 18%, with positive but relatively slow growth at the beginning of 2013. Meanwhile, Azerbaijan's mobile telecoms and internet - in particular broadband and mobile internet - markets have been booming in recent years.