Not war, but competition

27/03/2007 Babken TUNYAN

The “VimpelCom” company’s administrative staff (owner of “ArmenTel”) and the owners of companies in the CIS countries meet two times a year to discuss their activities. This time Tsakhkadzor was chosen as the place to meet.

According to vice-executive director of “VimpelCom” Sergey Avdeyev, the meeting is aimed at getting an understanding of what is being done in each country and how can the countries cooperate with the office to their fullest, evaluate the tendencies and elaborate general decisions. In other words, the goal is to set precise schedules because the company plans to construct a united “Beeline” network in the CIS region.

One of the most important topics of the discussion was the installation of the so-called convergence system. Based on my knowledge, it is a fixed, mobile phone number connection. It is new and this is the first time that something like this is being applied in Armenia’s mobile phone network. The representatives of “VimpelCom” assure that both connection and pricing will be much more affordable for the subscribers. Will the “ArmenTel” brand remain or will “Beeline” be a substitute? There is still no precise answer to this question. Armenian citizens don’t really perceive the name “ArmenTel” that well and “VimpelCom” knows that.

“The “Beeline” trademark will sooner or later be in the mobile phone network. The “ArmenTel” brand will most probably remain because it has a rather strong position; we simply have to change the image and prove that it can provide high-quality services,” says S. Avdeyev.

Director of “ArmenTel” Oleg Blizniuk is certain that the name “ArmenTel” has to remain at least in the fixed connection field because it has already turned into a national brand.
According to Avdeyev, “VimpelCom” and “VivaCell” have normal, competitive relations. “We don’t treat competition as a war, rather a contest to see who runs faster, or jumps higher to win…We are all civilized people”. The vice-director of “VimpelCom” also remarked that it is possible for the two companies to work together to, for example, jointly exploit the mobile phone towers. Avdeyev does not agree with the fact that that may turn into a monopoly. He brought up examples of their work in other countries where different operators compete and at the same time, use the towers; it is much cheaper and in the end, the subscriber is the one who benefits.

It is hard to say whether it was a coincidence or not, but on March 22, the Government of Armenia approved the decision to sell 10% of the shares of “ArmenTel” to “VimpelCom”. Mr. Avdeyev found out about that from the journalists (at least that is how he showed it). “I didn’t know about that. I am happy that they made that decision,” he said, reminding that there was a preliminary agreement-“VimpelCom” was to give up its monopoly in exchange for the 10% share from the government. “We gave up the monopoly,” said Mr. Avdeyev.

Let’s just hope that “VimpelCom” will stay true to its word in other issues and Armenia will not be so “cordial” as it was towards the former owner OTE.