YEREVAN (ARKA)—France Telecom’s investments in its Armenian subsidiary did not pay off and most likely is the reason the French company decided to withdraw from the Armenian market, cyber security expert Tigran Kocharyan told ARKA.
Orange Armenia, a telecommunications company owned by France Telecom, has entered into exclusive discussions with Ucom, an Armenian telecommunications company, for the sale of Orange Armenia’s shares. “Exclusive discussions mean that discussions on an agreement to be signed are ongoing and validation by Armenia public authorities has to happen in order to close the deal,” Orange Armenia said in a statement.
It said that following the finalization of the transaction, Orange Armenia will remain a full player in the Armenian telecommunications market with 650,000 customers, its network infrastructure, shops and personnel, but with a new shareholder.
“The agreement between Orange Group and Ucom will enable both our companies to unite their complementary strengths and offer customers innovative services including fixed and mobile convergent offers. If the negotiations are finalized and the deal is closed, Orange Armenia will have a new shareholder yet we will continue duly serving our customers, offering a wide range of tailored innovative services and an individualized customer care approach as before,” said Francis Gelibter, General Director of Orange Armenia.
According to Kocharyan, Orange has invested about $700 million in its Armenian subsidiary, but suffered losses because of “incorrect assessment of the internal situation in Armenia.”
Commenting on the negotiations between Ucom and Orange Armenia, Kocharyan said that from a business perspective it is a very good deal, despite the fact that Orange Armenia’s losses.
“Ucom’s entry in the mobile market and the purchase of Orange Armenia will close the gap Ucom had, as the company is well-developed in the field of online communications and the new deal will allow it to become a fully stocked telecommunications operator,” said Kocharyan.
According to audited financial statements, in 2014 Orange Armenia suffered 4 billion drams worth of losses, up from 3.85 billion drams lost in 2013.