By Gevorg Stamboltsian and Ruzanna Stepanian
The government has put on hold plans to open Armenia’s market for cell-phone and Internet services to competition in a bid to resolve its long-running dispute with the Greek-owned ArmenTel monopoly, a senior official said on Monday.
Ara Saghatelian, the Justice Ministry spokesman, told RFE/RL that the move is the result of last week’s talks in London between Justice Minister David Harutiunian and senior executives from ArmenTel and its parent company, the Hellenic Telecommunication Organization (OTE). The two sides explored the possibility of an out-of-court settlement of the row which is due to be adjudicated by the London-based International Court of Economic Arbitration.
“In order to facilitate the negotiation process, the government of the Republic of Armenia has decided to suspend changes to ArmenTel’s operating license until September 29,” Saghatelian said. He would not be drawn on what mutually acceptable deals might be in the offing.
The Greeks filed a lawsuit with the court earlier this year, reportedly seeking $600 million in compensatory damages which they say were caused by the Armenian government’s failure to honor key terms of ArmenTel’s 1998 purchase by OTE. The move followed a government decision to revoke ArmenTel’s 15-year exclusive rights to mobile phone communication and Armenia’s Internet connection with the outside world. The decision was to take effect on June 30.
Yerevan has long been complaining about the poor quality and disproportionately high cost of the services provided by ArmenTel. It also accuses OTE of failing to meet its overall investment commitments specified by the controversial takeover deal. But the authorities now seem to have softened their stance.
The ArmenTel monopoly is widely blamed on the fact that Armenia is lagging behind its ex-Soviet neighbors Azerbaijan and Georgia in the development of wireless phone services. The company has not even come close to meeting public demand for such services, giving rise to a thriving black market of prepaid phone cards. With a face value of $25 apiece, they are currently available for $130, or twice as much as the country’s official monthly salary.
There is also widespread discontent with both the quality and cost of Internet connection, with local Internet service providers complaining that they are charged by ArmenTel three times more than their Azerbaijani and Georgian counterparts. Some of them said on Monday that the ArmenTel monopoly is seriously hampering foreign investment in information technology (IT), one of the most promising sectors of the Armenian economy.
“I can say that the kind of communication for which we pay tens of thousands of dollars each month could cost just 100 dollars in America,” said Hovannes Avoyan, head of Lycos Armenia. “The first question potential investors ask relates to Internet connection. Its high cost and low quality does not make Armenia particularly attractive to them.”
Another industry executive, Berj Ayvazian of the U.S. IT firm Yankee Group, urged ArmenTel to cut its Internet fees. “It is very important that we have the best Internet access services widely available and at a very reasonable coast to make Western companies come to Armenia,” he told RFE/RL.