Armenian Internet Monopoly Scrapped

The ArmenTel national telecommunications company on Monday officially relinquished its controversial legal monopoly on Armenia’s Internet communication with the outside world, making good on one of the promises given by its new Russian owner. The move, formalized by the Public Services Regulatory Commission, will be welcomed by local Internet service providers and their customers that have long complained about the poor quality and high cost of the service. VimpelCom, a leading Russian mobile phone operator, pledged to give up the lucrative monopoly immediately after it paid nearly $500 million to buy a 90 percent share in ArmenTel from the Hellenic Telecommunication Organization (OTE) last month. Oleg Bliznyuk, ArmenTel’s recently appointed executive director, said the Russian firm stands for a full liberalization of the Armenian telecom market and is ready to face “civilized competition.” “Every Internet provider will now have the right to choose their source of external Internet connection,” one of Bliznyuk’s deputies, Hayk Fahramazian, told RFE/RL. Exclusive rights to all forms of telecommunication were a key term of ArmenTel’s 1998 takeover by OTE. The Greek telecom giant was forced to abandon its grip on mobile telephony two years ago after its dramatic failure to develop the wireless service in Armenia. But it resisted strong pressure for a similar liberalization of the Internet market. Armenia’s external Internet traffic has until now been carried out through a single fibro-optic cable running to neighboring Georgia, with ArmenTel failing to develop alternative satellite channels of communication. Local Internet providers say this is why they have been unable inexpensive high-speed service to corporate and individual users. That has in turn been widely regarded as a serious obstacle to the development of information technology, one of the most promising sectors of Armenia’s economy. Samvel Arabajian, a member of the state regulatory body, said the end of the monopoly should remedy the situation. “We expect that competition will lead to a drop in prices and an increase in quality,” he told RFE/RL. ArmenTel also abandoned on Monday its exclusive right to service external phone calls. This means that the country’s second mobile phone operator, VivaCell, will no longer have operate its subscribers’ international phone calls via ArmenTel.
By Ruben Meloyan

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Headlines for December 18, 2006

Armenian Internet Monopoly Scrapped
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