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By Atom Markarian
A senior official from the World Bank voiced his support on Wednesday for ending the monopoly enjoyed by the ArmenTel telecommunications operator ever since its 1998 sale to Greece’s OTE giant.

Roger Robinson, the bank’s resident representative in Yerevan, said opening the telecom sector to competition is “critical” for Armenia’s economic development and warned the authorities against transferring OTE’s 15-year exclusive rights to any other company.

“In the event that the government of Armenia and ArmenTel reach agreement to change the license arrangements and allow room for other operators to provide telecommunication services in Armenia, I would be pleased with that development,” Robinson told RFE/RL in an interview. “Experience has shown everywhere that some competition in telecommunications is very beneficial.”

“All impression that you needed a monopoly for the provision of telecom services is no longer valid today,” he added, questioning a key term of OTE’s $200 million takeover of ArmenTel.

One of the former cabinet ministers that negotiated the deal in 1998 acknowledged last week that the decision to give the Greeks a monopoly was a “serious mistake.” The current government shares this view and indicated last week plans to give ArmenTel a new license that will not carry exclusive rights. The long-awaited development came at the end of public hearings in which the government accused ArmenTel’s parent company of failure to meet its contractual obligation to modernize and develop the Soviet-era network.

ArmenTel’s Greek executives denied the charges, saying that OTE has invested more than $180 million in Armenia. They also warned that any unilateral decision to break the monopoly is illegal and will be challenged in the London Court of International Arbitration.

Robinson said the parties may still reach “some very amicable agreement,” but cautioned that the outcome of their intensifying dispute is “very uncertain.” “I presume that the owners of ArmenTel can sell their shares,” he said, highlighting statements made by top OTE executives in the past.

Robinson, who oversees the use of the World Bank’s vital multimillion-dollar loans to Armenia, also gave weight to the government’s case against ArmenTel when he said: “It is clear that the telecommunication system in Armenia needs to improve a lot. The telecom network’s coverage is not good and the costs are high, at least for the cell phone system, international traffic and Internet access.”
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