By Shakeh AvoyanThe Armenian government will block a steep rise in fixed-line phone charges planned by the ArmenTel national telecommunications operator, Transport and Communications Minister Andranik Manukian said on Tuesday.
ArmenTel’s requested the Transport and Communications Ministry’s mandatory permission for the tariff hike in a letter last August. The Greek-owned company wants to double the existing subscription fee of 950 drams ($2) per month and cut by half the length of time covered by it.
Outgoing local phone calls extending beyond that monthly limit that are charged on a per-minute basis. ArmenTel would like to drastically raise its existing charge of 4 drams per minute as well.
Manukian said his ministry has studied the telecom operator’s request and found it “unjustified.” But he indicated that the Armenian government would agree to a more modest tariff rise.
“We will be proposing economically substantiated tariffs [to ArmenTel]. We never make proposals that are not beneficial for the population,” Manukian told a news conference. But he refused to elaborate on those proposals.
The government and ArmenTel, which bitterly disagreed on the fixed-line charges in the past, will now have to sort out their differences at the negotiating table. “If we do not reach agreement in the next 45 days … the current tariffs will remain in force,” said Manukian. He said the government is interested in striking a compromise deal with ArmenTel because failure to do so would automatically prolong the company’s legal monopoly on fixed-line telephony by three years.
ArmenTel, which is 90 percent owned by Greece’s OTE, agreed last year to give up that monopoly in 2009 in an out-of-court settlement of its long-running disputes with the government in Yerevan. The deal paved the way for last July’s launch of Armenia’s second mobile phone network which has already rendered wireless service far more accessible and affordable for the population.
But the OTE subsidiary also clinched important concessions such as a government pledge to maintain its highly controversial exclusive rights to Armenia’s Internet connection with the outside world. The ArmenTel monopoly is widely blamed by Armenian information technology experts on the high cost and poor quality of the service.
The monopoly appears to be the main reason why ArmenTel has been one of OTE’s best-performing divisions ever since its 1998 takeover by the Greek telecom giant. Despite losing its grip on the lucrative mobile telephony, ArmenTel posted a 66.7 percent surge in its earnings in the first half of this year. They totaled $20.6 million during that period.
(Photolur photo: Andranik Manukian.)