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Embattled ArmenTel Posts Increased Profits




By Hrach Melkumian

The ArmenTel operator marked on Friday the fourth anniversary of its multimillion-dollar takeover by the Greek giant OTE, announcing a nearly 30 percent rise in 2001 earnings and rejecting the Armenian government’s fraud allegations.

The company’s Greek managers also insisted that they have invested $143 million in Armenia, far more than they were supposed to do under the terms of ArmenTel’s purchase.

The government, however, claims the opposite, accusing OTE of grossly inflating its investment figures. An ad hoc inter-ministerial commission investigating the telecom monopoly puts their total amount at $52 million. The commission has also alleged that ArmenTel has engaged in fraudulent practices in the selection of contractors.

The government has indicated that it will sue ArmenTel or demand its independent audit.

ArmenTel’s chairman, Vassilis Maglaros, dismissed the charges, arguing that the British auditing firm KMPG has examined his company’s books and found no violations. Its executive director, Nikos Georgoulas, accused the authorities of anti-Greek bias.

“It seems that Greek companies are generally not likeable in this country,” Georgoulas said.

A statement released by ArmenTel says that thanks to the Greek investments “Armenia has become independent in the telecommunications sphere,” having been connected to the outside world with a fibro-optic cable line. It says 27.6 percent of phone lines across the country now operate through digital exchanges, up from just 10 percent in 1998.

The company executives said that despite the strained relations with the government in Yerevan they were able to increase their pre-tax profits to $9 million last year from $7 million registered in 2000.

But the figure is still far below the record-high level of $18.5 million posted in 1998. ArmenTel blames the plunge mainly on the emergence of numerous local companies which provide external telephone connection through the Internet at a much lower price. The company claims that the service is illegal as it violates its 15-year monopoly on fixed-line phone connection.
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