ArmenTel Offers New Approach to Crisis

YEREVAN (RFE/RL)–Government ministers on Friday defended the ArmenTel company’s decision to raise its telephone fees–while opposition parliamentarians reaffirmed their plans to strip the company of exclusive rights on telecommunications in Armenia.

The ministers of economic and structural reforms and telecommunications welcomed a decision by ArmenTel’s Greek owners to delay some of the planned rate hikes–speaking at a joint news conference.

Top executives from Greece’s OTE said on Thursday they will raise the monthly fixed fees in Armenia by 50 percent but will not introduce a payment by the minute of local calls for the moment.

"Yes–we do have low salaries and grave social problems–but we must have a growing economy–which is impossible without investmen’s," said Artak Vartanian–the minister of postal service and telecommunications. But he admitted that it was "politically wrong" to introduce the highly unpopular per-minute fee before parliamentary elections due in May.

OTE executives indicated on Thursday that government objections were taken into consideration when the decision was made. The executives presided the same day over a meeting of ArmenTel’s board of directors which approved a five-year business plan envisaging $265 million in investmen’s in Armenia’s telecoms by 2003.

However–Vahram Avanesian–the minister of economic and structural reforms–said he is not confident that OTE will meet its pledge to invest $74 million this year. OTE has come under strong public criticism for delaying with its investment obligations. Vartanian argued that the company needed "some time to analyze the situation."

Later this month–the Constitutional Court is to give a ruling on their appeal–also signed by 12 deputies from the pro-government Yerkrapah faction. In a separate session–the National Assembly will discuss changes in the law on telecoms that upholds ArmenTel’s exclusive rights.

OTE secured the exclusive rights in 1997–in return for paying $142.5 million for 90 percent of ArmenTel’s equity. It pledged to invest $300 million in modernizing Armenian telecommunications over the next decade.

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