On November 3, the “riddle” was finally solved. The “OTE” company will sell its stocks to the second largest mobile phone operator “Vimpel Com” (B-Line). This transaction was a very interesting coincidence because it overlapped with the Kocharyan-Putin meeting on October 30 in Moscow. Putin thought that it was a “shame” that Russia places third as an investor in Armenian economy when Russia is considered to be the “strategic ally”. Now, Armenian authorities don’t have to “blush” because it seems that the first place belongs to Russia. Of course, on the day of the transaction, the Vimpel Com put information on its website stating that the transaction is made but Russia is still waiting for the approval of the Armenian government, but the government has no reason to delay the approval.
Secretary on the Security Council adjacent to the RA President, Defense Minister, Co-Chairman of the Russian-Armenian Inter-Governmental Council on Economic Relations Serge Sargsyan announced that the Armenian side still has to get acquainted with the conditions of the deal, as well as sale price of the Armentel stakes. By commenting on the opinions on the danger of selling the Armenian companies of strategic importance to Russia, Sargsyan said that the growth of the Russian capital in the strategic objects of Armenia is not dangerous, since Russia has never taken advantage of the privileges it has in Armenia’s economy. “Just bring one example of pressure on the part of Russia on Armenia through the means of its economic capital. Which is more profitable for Armenia – the Russian or the Arabic capital? Why do you listen to the senseless arguments of people, who don’t understand much about this sector? They don’t realize the importance of investments of Armenia,” said Sargsyan.
Former Prime-Minister of RA, rector of the Russian-Armenian (Slavonic) University, Armen Darbinyan also expressed how glad he was about the abovementioned transaction: “Vimpel Com is a serious company, which intends to invest modern technologies, which I wish success in the Armenian market,” said Darbinyan. He mentioned that in 1998, when the Armentel stakes were being sold, he was sorry that the Russian company had never been interested in buying the stakes. “I welcome this transaction and am very glad that finally a Russian company became the owner of Armenia’s communication service,” mentioned the former Prime Minister.
While the Armenian government is thinking about approving the deal by the end of the year, the Russian media is specifically drawing its attention to this large investment. The online news page of the “Online Express” news wrote that Armenia is the sixth country after Kazakhstan, Russia, Tajikistan, Ukraine and Uzbekistan that the Russian B-line is closing an investment deal with in the article entitled “6th line on the map of B-line”. “It cost a lot for B-Line to have access to Armenia. The company has paid $440 for each subscriber of Armentel and over $1100 for the ones, who are subscribers of mobile services,” writes the “Express Online”. The Russian media has been complaining about the high stock price of Armentel long ago. That was the time when all the other potential buyers of Armentel – the Indian and the Arabic consortiums, were offering more money to the Greeks than the Russian “Sistema” or “Vimpel Com”.
According to “Express Online”, the current head of media department of Vimpel Com, Yelena Prokhorova, announced that their company is interested in both of the services of Armentel – the fixed telephone service and the mobile service, and that “Vimpel Com” is not going to sell the fixed communication service. “On the other hand, the deal of Vimpel Com doesn’t seem very profitable. According to official data, the population of Armenia is 3,2 million and the majority of people are living outside Armenia-in Russia, Turkey, Ukraine, etc. Armenia occupies the 114th-116th place internationally for its purchasing power,” as stated on the website and adds that although Armenia has a 10% economic growth, however more than 40% of the population is extremely poor. “Besides that, the penetration of mobile communication in the country exceeds 30%, which doesn’t enable us to expect huge profits in the future. According to a senior adviser of “IKS-Consulting”, Margarita Zobnina, in the first quarter of 2006 the Armenian mobile market compared to the same period of the previous year has increased only by 11%,” writes the “Express Online”. She thinks that Vimpel Com might face certain difficulties in the process of converting the monopolist Armentel into a more dynamic B-line. The adviser has also mentioned that nevertheless, Armenia’s attitude towards the Russian company is better than that of Georgia, where Vimpel Com is building its network.
In this case a question comes up – if B-Line has started to criticize this transaction prior to the signature of agreement, then what’s the point of closing the deal? “Nevertheless the entrance of the Vimpel Com into a new market is a positive move for the brand of the phone company,” writes “Online Express” and adds that after the transaction Armentel will be called B-Line.