By Karine Kalantarian and Ruzanna Khachatrian
The government took on Thursday the first step towards untilaterally abolishing the ArmenTel operator’s legal monopoly on all forms of telecommunication in Armenia, setting the stage for a risky court battle with its Greek owner.
Senior government officials accused the company of “arbitrary and abusive conduct” that violated key terms of its 1998 sale to the Hellenic Telecommunication Organization (OTE). They reiterated their claims that the OTE subsidiary has failed to meet its investment commitments and provide reliable telecom services to which it had been granted 15-year exclusive rights.
Transport and Communication Minister Andranik Manukian urged a state official presiding over the hearings to back the government’s case. “The government of the Republic of Armenia must have the right to grant ArmenTel a new operating license,” Manukian said, adding that the new license should put an end to its monopoly.
The government’s Armenian-American lawyer, Vahe Yacoubian, argued that the authorities are allowed to do that because “ArmenTel has violated the terms and conditions of the license, has engaged in arbitrary and abusive conduct and has violated applicable Armenian law, regulations, orders and rules.”
However, ArmenTel’s acting chief executive, Georgios Vassilakis, said the mediator’s decision, which will likely favor the government, can not have a legal force and that OTE will challenge any unilateral action at the International Court of Economic Arbitration in London. He again dismissed the government charges as “fabricated.”
Vassilakis compared the hearings to a one-sided trial, saying that the government side wants to secure a “divorce without a financial compensation.”
The decision by the so-called “hearing officer,” State Securities Commission chairman Eduard Muradian, is expected at the end of this month. It is not clear whether the parties will try to negotiate a mutually acceptable deal in the meantime. OTE has repeatedly indicated its desire to sell ArmenTel to another foreign company.
The hearings have sparked a separate controversy over ArmenTel’s alleged wiretap of phone calls in Armenia. A representatives of a U.S. consultancy that has audited ArmenTel said this week that the telecom operator has eavesdropped on and recorded all phone conversations made through its digital exchanges. Vassilakis initially did not deny the claims, but insisted afterwards that his company wiretaps calls only at the request of Armenian security agencies.
Under Armenian law only a court can issue such an authorization.
“Evidently, in violation of Section 13 of the license, ArmenTel has secretly installed and uses a monitoring system which permits ArmenTel to gather confidential and private information about a subscriber, including all information transmitted through telephone tones during calls in the digital domain,” Yacoubian charged. “This could be confidential banking information, passwords, special identification numbers and other personal and private information.”
The scandal has provoked an outcry among the country’s leading political parties. “It is absolutely unacceptable to engage in such a practice in breach of the law,” a leader of the governing Republican Party of Armenia, Tigran Torosian, told RFE/RL.
Some pro-government and opposition politicians called Thursday for an immediate government inquiry into the allegations.
(Photolur photo: Yacoubian, right, adivising Manukian during the hearings.)