By Karine Kalantarian
The Armenian government’s decision more than five years ago to sell the ArmenTel operator to Greece’s largest telecommunications company was a serious mistake, one of the masterminds of the $142 million deal said on Tuesday.
Vahram Avanesian, who was a key cabinet minister at the time, said the government should have heard more expert opinion before granting 90 percent of ArmenTel shares and a 15-year monopoly on all telecom services to the Hellenic Telecommunication Organization (OTE).
“We signed the agreement on our own, without [consulting with] specialists and professionals,” he told the ongoing hearings on the bitter dispute between the two parties. “We realized very soon that we were very, very wrong.”
“Many of the mistakes occurred because people, including myself, were thinking that everything could be done by a single person. Even things which he is not professionally equipped to do,” he told reporters afterwards. He declined to elaborate.
Avanesian was a member of a government commission that decided the terms of ArmenTel’s sale. The 15-year exclusive rights have proved the most controversial of them. Many local analysts believe that the monopoly has stifled the spread of the Internet and the development of the mobile phone network in Armenia.
Avanesian is not the only government official to have publicly regretted the decision. Justice Minister David Harutiunian, who fought an opposition challenge against the ArmenTel monopoly at the Constitutional Court in 1999, did so last year. He is now spearheading government efforts to revise the terms of the 1998 takeover.
OTE’s five-year track record in Armenia has also been criticized by a U.S. telecom consultancy that has audited ArmenTel over the past year. “The access to telecommunication services has declined,” one of its executives declared at the hearings on Monday. “The results of [ArmenTel’s] capital investments are substantially less than we would have expected given the amount of money that has been spent.”
That amount, according to ArmenTel chief executive Georgios Vassilakis, will have surpassed $200 by March 2004. Vassilakis again defended OTE’s handling of the Armenian telecom sector, saying that it will develop further if the government abandons its plans to force the Greeks out of the business.