ArmenTel’s Greek Owners Water Down Planned Rise in Phone Fees for Now

YEREVAN (RFE/RL–Noyan Tapan)–Greece’s state telecommunications company OTE has scaled down the planned increase in telephone fees of its Armenian subsidiary–ArmenTel–in the face of growing public opposition–company executives said on Thursday after talks with government officials in Yerevan.

George Karapilis–OTE’s chief financial director–told reporters that the company will raise the monthly fixed phone fees in Armenia by 50 percent–but will not introduce a payment by the minute for local calls for the moment. OTE–which controls ArmenTel–earlier planned to charge users 8 drams (2 US cents) for every minute of conversation beyond a two-hour limit covered by the fixed fee.

The measure has triggered strong criticism in Armenia–with several political parties and newspapers demanding its revocation. The Armenian government–for its part–has said the Greek company should raise the prices only after upgrading the country’s aging phone network.

In late 1997–OTE paid $142.5 million for 90 percent of ArmenTel’s equity pledging to invest $300 million in modernizing Armenian telecommunications over the next decade. In return–it secured exclusive rights to the market for fixed and mobile telecommunications services in Armenia for at least fifteen years.

Last week–opposition factions in the Armenian parliament appealed to the Constitutional Court–saying that the exclusive rights are unconstitutional. The Court–believed to be loyal to the government–is to decide on the issue late this month.

The Greek executives arrived in Armenia to attend Thursday’s meeting of ArmenTel’s board of directors–which approved the company’s five-year business plan. It was also attended by Armenian government officials. OTE’s Karapilis said the plan envisages $265 million worth of investmen’s in ArmenTel until the year 2003.

He argued that increasing fees is a necessary step–as $100 million of that sum is to be raised from ArmenTel’s own profits. The fixed monthly fee will thus grow from 600 to 900 drams ($1.5). The OTE officials did not say when the per-minute payment will be introduced.

"We understand the public discontent and want to make sure the measure does not hurt people economically," he said. Karapilis said within three years 75 percent of Armenia’s network will be operated by digital telephone stations.

President Robert Kocharian’s Political Council–comprised of representatives of various political parties loyal to the his administration–on Thursday commended a decision by 72 deputies of the National Assembly to refer controversial issues surrounding the ArmenTel telecommunications company to the Constitutional Court–the Noyan Tapan news agency reported.

Self-Determination Union representative to the Political Council Rouben Vartanian informed reporters that no votes had taken place during the Council’s meeting on the ArmenTel issue.

Earlier this week–72 deputies of the National Assembly sent a request for review to the Constitutional Court–in order for the latter to examine legal and constitutional issues surrounding question of monopoly in regards to ArmenTel. According to these deputies the Feb. 17–1998 approval of the National Assembly and the subsequent Feb. 20–1998 presidential signing of the ArmenTel international sale–particularly Section 24 of the document–is in stark opposition to the Armenian law.

According to the deputies–this section of the sale document does not correspond to Article 8 of the Armenian Constitution–where it is explicitly stated that the Armenian government shall promote liberal conditions for private ownership–as well as legal protection–free economic development–and unrestricted economic competition.

It should be noted–that based on the sale document a number of exemptions have been granted to ArmenTel–although according to the deputies–if the company receives certain exceptions to the law–then there must also at the same time be certain limitations–and not an unrestricted green light for the company’s possibly monopolistic activities.

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