By Atom Markarian
The government stepped up Friday pressure on ArmenTel, saying that the embattled operator abused its legal monopoly on telecom services in Armenia when it introduced a new scheme to charge mobile phone users.
The government’s Commission on the Protection of Economic Competition ruled that the Greek-owned company’s decision obligating customers to buy handsets for prepaid phone cards only from ArmenTel violates the country’s anti-trust legislation. The company was fined 5 million drams ($8,800) and ordered to allow buyers to return their phones.
The new, heavily advertised payment scheme was introduced earlier this month as an alternative to the existing billing system for mobile phones which many Armenians believe is too expensive. Customers buying prepaid cards are exempt from paying a fixed monthly fee of 10,000 drams ($17.5). However, they face much higher charges for local calls: $0.45 per-minute. The regular fee is $0.18.
They can not buy such cards without paying $128 for an ArmenTel handset, a requirement which the anti-trust commission said breaches the Law on the Protection of Business Competition. The commission also decided that the profit made by ArmenTel from its already sold handsets must be transferred to the state.
The move, which deepened the long-running telecom row in Armenia, came at the end of a commission meeting attended by senior ArmenTel executives. The company’s financial director, Vassilis Kapsis, reacted to it with fury, threatening to take the government to court. Kapsis argued that the sale of handsets by mobile phone operators is a widely accepted practice in the world and that his company resorted to it to recoup its investments in the country’s phone network. He said the company is allowed to do so under the terms of its 1998 operating license.
But the commission’s chairman, Samvel Stepanian, countered that the subsidiary of the Hellenic Telecommunications Organizations (OTE) should have allowed subscribers to decide which phones to use. He also accused ArmenTel of seeking to make “super-profits”, pointing to the new scheme’s 30 percent profit margin.
The government and ArmenTel are already locked in a bitter dispute over the latter’s investment commitments. OTE claims to have invested $143 million in the Armenian telephone network over the past four years. The government insists that the figure is grossly inflated.