Prime-Tass English-language Business Newswire
March 23, 2005
Yerevan, Mar 23 (Prime-Tass) -- Armenian national telecom company ArmenTel does not want to delay the start of operations of Armenia's second mobile operator K-Telecom, Vasilios Fetsis, Armentel's CEO, told reporters Wednesday.

K-Telecom is holding negotiations with ArmenTel regarding cooperation on Armenia's mobile market and on the 25 MHz frequency, which is used by ArmenTel and is expected to be divided between the operators.

Fetsis said that the companies have agreed upon all matters except the issue of how much K-Telecom should pay for use of ArmenTel's lines. ArmenTel offered K-Telecom 'close to liberal' tariffs, Fetsis said, adding that K-Telecom wants to use the lines for next to nothing, which is impossible.

K-Telecom may build its own network, but it is more profitable and quicker to rent lines from ArmenTel, Fetsis said.

Fetsis said that if the companies do not come to an agreement on the matter in four-six months, the issue is expected to be regulated by Armenia's Transport and Telecommunications Ministry, adding that negotiations have already lasted for more than four months.

Fetsis said that ArmenTel plans to invest 15 million - 20 million euros in mobile network development in Armenia in 2005. The total amount of investments this year is estimated at 50 million euros, including 25 million euros planned for fixed-line investment.

In 1997, Greek company Hellenic Telecommunications Organization SA (OTE) paid U.S. USD 142.470 million to gain control of a 90% stake in ArmenTel. It bought a 41% stake from the Armenian government and a 49% stake from Trans-World Telecom.

According to the agreement between OTE and the Armenian government, ArmenTel was granted the right to hold a monopoly for 15 years, but in September 2003 the government initiated a procedure to amend ArmenTel's license due to the allegedly low-quality services it provided.

In November 2004 the Armenian government decided to make amendments to ArmenTel's license, depriving the company of its exclusive right to provide GSM, mobile satellite and mobile radio communication services in the country.

But the company kept its monopoly on IP telephony voice transmission services.