By Shakeh Avoyan
The government approved on Wednesday a drastic cut in state duties levied from Armenian firms providing Internet connection, a move it hopes will further popularize the service.
Under an Armenian law, local Internet service providers have to pay not only regular taxes but also an annual fixed fee for using “public networks of electronic communication.” Small providers have long complained that the fixed fees, ranging from 500,000 drams to 3 million drams ($8,500), are prohibitive for them and hamper competition in the sector.
A special commission advising Prime Minister Andranik Markarian on promotion of information technology (IT) in Armenia has looked into the matter and concluded that the fees must be reduced dramatically. As a result, the government decided to seek corresponding changes in the law.
“The current fees do not provide for a level playing field for big and small Internet providers,” said Zhenya Azizian, head of the IT department at the Armenian Ministry of Trade and Economic Development.
In Azizian’s words, the changes envisage that Internet providers operating in Yerevan and at least one region outside it will have to pay 500,000 drams a year, down from the current level of 3 million drams. The state duty for those providing Internet connection only in the Armenian capital will be cut from 2 million drams to 300,000 drams, he said.
Some small Internet firms welcomed the government initiative but cautioned against expectations of a rapid fall in the relatively high prices of the service. “The lower duties will just make it easier for new Internet firms to enter the market,” Armenak Khachatrian, head of the Radiomet company, told RFE/RL. But he agreed that a large number of providers will eventually mean more competition and lower prices.
The prices are expected to fall also as a result of the recent abolition of the ArmenTel national telecommunication operator’s controversial legal monopoly on Armenia’s Internet access to the outside world. Armenian Internet firms have blamed the monopoly for their inability to provide inexpensive high-speed connection to corporate and individual users.