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By Armen Zakarian and Harry Tamrazian in Yerevan

The Minister of Transport and Communications Andranik Manukian announced that the Armenian subsidiary of the Greek Telecom OTE, "ArmenTel" promised to increase the coverage of wireless communications in various regions of Armenia. "ArmenTel promised until the end of this year to increase coverage of the country from the current 45 percent to 85 percent", Andranik Manukian said.

'ArmenTel' is a monopoly in the Armenian telecommunications market and has enormous pricing power. 'ArmenTel' has been under heavy criticism in the Armenian Parliament since the government sold it to the Greek telecommunications giant, OTE in 1998, with an exclusive right in the Armenian telecommunication market. Opposition parties have tried unsuccessfully to undo the deal in the parliament on the ground that the privatization deal was unconstitutional. 'ArmenTel' was granted 15-year monopoly rights on the Armenian telecom market. The Armenian government also granted OTE's subsidiary an exclusive right on wireless communications.

The Armenian government also criticized the Greek company for delaying its contractual obligations to invest and modernize the telecommunications infrastructure and filed a lawsuit against the management in 2000 for failure to honour its investment obligations. The case was settled later but the issue of investments still remains a major cause of controversy between the government and 'ArmenTel'.

Currently, only 45 percent of telephone lines are digital but the
company promised also to speed up their modernization. "That is because 'ArmenTel' didn't deliver on its earlier promises", the Armenian Minister of Transport and Telecommunication told RFE/RL.

The shortage of mobile phone calling cards in the Armenian Market is also the result of delays in fulfilling investment obligations by the Armenian subsidiary of the Greek telecommunication company. The supply of "Easy Cards" produced by 'ArmenTel' is not enough to cover the high demand and as a result they are being resold in the black market for several times the price set by the company. "If they had kept the investment schedule according to their obligation then they would have much higher subscription rates in the wireless market. Currently 'ArmenTel' has only 50 thousand subscribers", the Minister said.

The minister threatened 'ArmenTel' with dire consequences if it continues to ignore the government's call to fully implement its investment obligations by upgrading telecommunication lines and increase the wireless coverage for the whole territory of the country. " If ArmenTel continues its policies then we will again raise the issue of depriving it from exclusive rights on the Armenian market", Andranik Manukian said. The ArmenTel monopoly is one of the remaining obstacles to Armenia's membership in the World Trade Organization.
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