By Shakeh Avoyan
The Greek-owned ArmenTel monopoly on Tuesday called a halt to its investments in Armenia’s telecommunications sector, alleging a concerted government effort to squeeze it out of business. The move marked a further deepening of the long-running dispute between the Armenian government and the subsidiary of Greece’s OTE telecom giant which an international commercial court in London will try to adjudicate later this year.
Announcing the news, ArmenTel’s chief executive, Georgios Vassilakis, denounced the government’s “hostile” treatment of his company which has manifested itself through a flurry of anti-trust cases heard by local courts and other state bodies in recent months. ArmenTel has lost virtually all of them, leading Vassilakis to allege a high-level conspiracy against the unpopular telecom operator. He said many of the court rulings against its pricing and Internet service policies ran counter to Armenian law.
Vassilakis spoke during hearings at the government Commission on the Protection of Economic Competition on a complaint lodged by one of Armenia’s leading Internet service providers. The Arminco company claims that ArmenTel, which has a legal monopoly on Internet connection with the outside world, is blocking its expansion into regions outside Yerevan with decisions favoring another provider owned by ArmenTel. The latter denies the charges.
The Greeks claimed last September to have already invested $182 million in modernizing Armenia’s telecom sector since acquiring ArmenTel in 1998. The figure was dismissed as a fraud by the government which pointed to the poor quality of the wireless phone and Internet connection. The government decided earlier this year to unilaterally strip the company of its lucrative exclusive rights to the two services.
OTE and ArmenTel, which say the decision is illegal, responded by filing separate lawsuits to the London-based International Court of Economic Arbitration. Officials say they are seeking as much as $600 million in compensatory damages, a sum equivalent to the country’s annual budget. Their lawyers are expected to put the emphasis on the Armenian government’s repeated refusal to allow ArmenTel to raise its fixed-line phone tariffs to a level specified by the 1998 deal.
The implementation of the government decision revoking the ArmenTel monopoly has been delayed until June 31 pending the outcome of the court battle. Justice Minister David Harutiunian, who represents Yerevan in the row, said this month that he is upbeat about his chances of winning it. But he indicated that the government will have to backpedal from its telecom liberalization plans if the London court rules in the Greeks’ favor.
(Photolur photo: Georgios Vassilakis.)