During the discussions the commission approved that draft and brought up a decision to reject the proposal of Armentel. The commission informed that the facts brought up by Armentel to increase the prices for its services were not justified. The general director of Armentel, Vasilis Fetsis did not agree with the argument of the commission and said that “this rebalanced application is more justified and issue-based than the applications of the previous years”. Last year the commission approved the application of Armentel.
When the commission made its decision to reject the application it seemed more like political act than the duty of the commission. 2006 year is a pre-election period and the government does not want to confuse the society; that is why they are not interested in approving the mentioned proposal. Armentel proposed to increase the monthly fee of stable telephone communication up to 3.000 dram from 1.100 dram, reduce the free conversation time limits, increase the internet service fee from 1 dram per minute up to 2,4 dram, etc. The representatives of the company don’t want to see any political reasons for being rejected. The head of the price regulation department of the commission, Armen Arshakyan assured that the commission was independent and no one could stop them from doing their job. The latter said that they discussed the proposal based on economic factors only. Based on the speech of the general director of the company we may assume that the company is going to rebalance its prices and then no longer play a dominating role in the field by the end of 2009. The representatives of the mentioned company say that they provide services for prices lower than the net prices. Armentel increased the rates for some services as of January 1. The company has a right to develop a proposal once a year to rebalance its prices and thus now they don’t want to lose their opportunity provided for this year. By the end of its monopoly, it is going to develop more four proposals to rebalance the prices to the current level of market prices. One of the real fees is the stable communication monthly fee, which will become 4.000 dram slowly after 2010, while it is 1.100 dram now. If the commission does not meet the proposal of Armentel and does not approve it this year, next year Armentel will have to increase the prices for some services rapidly to reach the goals that it has. If we take into account the fact that the upcoming year is a pre-election period too (following the parliamentary elections there will be presidential elections in 2008) it is possible that Armentel may come to an agreement with the commission till the end of this year to increase the prices for some services. Of course, they will not change the prices the way Armentel has proposed. Besides that, the commission has a similar strategy. Usually companies propose the maximum limits, and the commission reduces those limits. It seems that they want to show that they are independent. In other words, it is possible that the proposal of Armentel may change this year and at the beginning of next year we may have new fees and rates for some services provided by Armentel.