Yesterday the Public Services Regulatory Commission (PSRC) made a decision to strip Armentel of its monopoly rights in the telephone communication sector. This decision was not a surprise as people have been speaking of it for about a year. The national telephone company, ArmenTel, will abandon its remaining exclusive rights to telecommunication services in Armenia under an agreement with state regulators that was unveiled on Friday. The deal, which should lead to greater competition in the country’s underdeveloped telecom sector, came after weeks of negotiations between the Public Services Regulatory Commission and ArmenTel. The latter will, in particular, cease to have a legal monopoly on fixed-line telephony. Still, officials admitted that this will change little in practice as there will hardly be local or foreign investors willing to spend huge sums on building a second fixed-line network in Armenia. Far more important is the fact that ArmenTel agreed to give up its grip on external phone connection provided over the Internet. Many Armenians use the so-called IP telephony service to make phone calls abroad at prices that are much lower than those charged by ArmenTel for regular phone connection. As recently as last January, the PSRC reaffirmed ArmenTel’s monopoly on the lucrative service and allowed it to force scores of small Internet phone providers out of the business. The move sparked street protests by hundreds of owners and employees of those firms. ArmenTel was controversially granted 15-year exclusive rights to all forms of telecommunication when it was acquired by the Greek telecom giant OTE in 1998. The company was forced by the Armenian government to abandon its monopoly on mobile telephony in late 2004 after failing to develop its wireless network and meet growing demand for the service. Another key monopoly, relating to Armenia’s Internet access to the outside world, was scrapped late last year shortly after ArmenTel’s $500 million takeover by the Russian mobile operator VimpelCom. The monopoly had long been blamed for the poor quality and high cost of Internet connection in the country. Many hope that its abolition will spur the development of information technology, one of the most promising sectors of the Armenian economy. Officials also said on Friday that ArmenTel will not seek to significantly raise its fixed-line phone fees at least until next April. This means that they will remain unchanged before a presidential election due early next year. ArmenTel formally asked the PSRC to allow such a price rise in May. The regulatory body rejected the request as unfounded. ArmenTel’s Russian chief executive, Oleg Bliznyuk, indicated that the telecom operator will again seek higher phone charges later in 2008. “It’s important that the market be not only free but civilized,” he told journalists. “We will take one year to gauge the real work and investments of new companies entering the market as well as the quality of services provided by them.” The commission decided at its Friday’s session to strip the company of its sole right to provide telephone communication services for the conjugated telephone communication network, including local, intercity and international telephone communication. According to the decision, ArmenTel will no longer enjoy monopoly on providing services through the company-set telephones, including those operating on telephone, credit and debit cards. Under the decision, ArmenTel will also be stripped of its monopoly on providing public mobile communication services, excluding GSM, mobile satellite and mobile specialized radio services. Along with that, ArmenTel will no longer enjoy monopoly on providing non-basic services on internal or international telecommunication, including free talks and voice conveying through Internet. Gevorg Gevorgyan, the chief of the commission’s telecommunication-regulating unit, said at the session that the decision was grounded on the commitments Vympelcom Company assumed as acquired ArmenTel. He thinks that as a result, Armenian telephone communication market will become more liberal and transparent. Robert Nazaryan, the commission chairman, said that for long years the Armenian community had demanded ArmenTel to waive its sole right. “That’s why we view this moment as a landmark event”, he said. The quota of ArmenTel, the second mobile telecommunication operator, at mobile communication market is 33%. Russian Vympelcom (Bee Line) holds 100% of the company’s shares. ArmenTel had 608.5thnd stationary telecommunication and 452thnd mobile communication subscribers by late 2006. “Starting from October 1 Armentel is becoming a trade organization and gets rid of many of its social obligations,” announced Armentel’s director, Oleg Bliznyuk and added that from then on the investment amount of the company must be measured in the returning income policy line. “But Armentel will not forget about pensioners and vulnerable groups of Armenia,” nobly mentioned Bliznyuk.
