– Mr. Sargsyan, in your opinion why did OTE sell Armentel? Wasn’t it receiving a lot of income from the company? Why would it sell a profitable business?
– I was always thinking that OTE wouldn’t ever sell Armentel because there is foreign policy. First of all Armenian-Greek relations are quite friendly. There was another interesting factor as well. Greece is a NATO member. And the Armenian communication was in the hands of a NATO country. Seemed that NATO wouldn’t refuse the communication sector of Armenia. However, over the period of the past years OTE was degraded within Armentel. And in this case perhaps the economic interests were perhaps more important than the political ones. OTE is considered the fifth greatest communication company in Europe. Its stocks are presented in New York stock market. Any negative opinion expressed in Armenia would definitely harm the image of OTE. Besides, according to my information OTE had quite serious financial difficulties. Thus, by selling Armentel OTE solved two issues – first annihilated the negative outflow of information from Armenia and regulated its financial issues. There is also the third reason. By selling Armentel OTE avoided its further obligations.
– What obligations?
– OTE bought Armentel in 1998 and was obliged to provide telephone communication throughout the whole Armenia and tone the communication. This required a lot of expenses. OTE didn’t want to invest much here. It came here to receive super incomes and treated Armenia like it would treat a poor African country. It sold Armentel in the right time. By that it got away from making serious investments and being humiliated. This was the best option for OTE.
– A lot is spoken about super incomes and malfunctioning. What exactly was done?
– Let’s start from the point that Armentel had absolute monopoly in our communication market and received immense incomes by selling its services at extremely high prices. In terms of expenses it also had lots of profits. OTE was bringing from Greece devices and equipment at exaggerated prices. However, many of the items wasn’t even necessary to import. They could have offered it from the local producer at cheaper prices. Many Armenian companies participated in Armentel tenders but none of them won. They didn’t even want to order T-shorts in Armenia. Their whole policy was aimed at ensuring enormous monetary outflow from Armenia.
– What investments has OTE made in Armenia? Do the technical means have high quality or not?
– No those devices are not the last technologies. They also were slightly worn out. OTE was buying devices for Armentel from Greek Intracom and Siemens companies. Those are not the world famous companies but only their branch patent offices. OTE was buying all the necessary items for Armentel from those companies with exaggerated prices. I have grounds to say that OTE has received super incomes from our communication market. It was also receiving a lot of income from international calls for example Armenia-Iran communication, which could have been fixed in a direct way was done through OTE. This is the same as to go to Iran by first stepping in Greece. Same regards the calls to the US, Canada, Australia an other countries.
– By your information, to what extent has Armentel fulfilled its obligations and what heritage was left to Vimpel Com?
– Let’s mention that OTE was supposed to provide telecommunication throughout whole Armenia. But today even the capital city has problems with insufficient telecommunication. Only 65-70% of Yerevan is provided with telecommunication. There are areas in Yerevan, which do not have nromal network of fixed telecommunication. For example, 7 and 9 massives of Nork, Erebuni, Shengavit, Ajapnyak communities are not fully provided. In order to provide it we need new cables and equipment. But the greatest problem for us is the provision of communication in villages and rural communities. Because of Armentel’s indifference the telephone stations of villages were destroyed and robbed. Besides that villages are not provided with Internet communication. What’s the fault of the village kid, who because of the wrong policies of Armentel is not able to receive information through Internet? Or we want to develop small business in villages. But for that we also need communication. I am glad that at present our government is trying to recover the rural roads. Provision of communication for villages is not only the problem of Armentel or OTE but also our authorities. At present the cities also develop. Yerevan also needs new standards of communication because new buildings are being built and thus new phone numbers are going to be necessary. That’s a lot of money for Armentel. The 100-or 200 number capacity cable must be replaced by 1000 or 2000 cables.
– Do you think Vimpel Com is not aware of the mistakes of OTE or doesn’t it know that the reports presented to them are exaggerated?
– Of course they are aware. Auditing also take place but this will hardly change anything.
– May we say that OTE avoided all obligations?
– Yes, it did. Those activities require great finances, which OTE refused to provide. Besides that Armentel has never done a good job in consenting with RA government. For example it wanted to change a cable on a street, which was just repaired. It’s natural that after digging the street they’d have to repair it again. Thus OTE was refusing to do so. There was no perspective work planning and cooperation with state institutes.
– What’s your opinion about the suggestion of RA communication minister, Andranik Manukyan, by which he offers the new owners to refuse Internet communication monopoly in order to receive the 10% stocks of the government?
– I have a negative opinion. The Russians will refuse the monopoly anyway. Internet communication was stolen and used by numerous enterprises and it’s not a secret. There are numerous companies like that, who are back up with statesmen. Thus the owner of Armentel would refuse it himself. Besides why do we think that the monopoly is one-sided? If you give privilege you should also give obligation. And if you deprive somebody of privilege you must exempt him from obligation as well. The Greek refused it and left their heritage to the Russians. Vimpel Com announced that they are going to make investments. Time will show.
– You particularly spoke about fixed communication. Is the mobile communication in good shape though?
– Of course not. If it was OK we wouldn’t have the interruption a few days ago (Armentel communication was cut until midday). What does it mean, “because of no power the communication was interrupted”? In this case the automatic system must have worked, which hasn’t. The businessmen could have sued Armentel because it’s possible that during the interruption prosperous business deals failed.
– Mr. Sargsyan, don’t you think that our government is also guilty for Armentel’s malfunctioning? Is it possible that they cut a deal with OTE and did everything together?
– There might be a deal with our government but I don’t have grounds to substantiate such an accusation. Frankly said there was time when the government was trying to prevent this robbery and abuse but they never went till the end. At least let’s remember former Armentel executive director, Yorghulas.
– Don’t you think the current owner of the company will present the mistakes of its predecessor to its subscribers?
– It won’t happen. Besides that if the current owner provides good service it can also provide good reputation. It would be much better if the current owner conducted effective policy – including local specialists, etc. OTE was even bringing the heads of departments from Greece. They were paid several times more than our professionals.