Constitutional Court Challenges ArmenTel Monopoly Avoids Action

YEREVAN (RFE/RL)–The Armenian Constitutional Court has brought further uncertainty into the monopolist activities of the ArmenTel telecommunications operator–ruling on Wednesday that they are unconstitutional but refusing to challenge the terms of its takeover by a Greek company.

Fifteen-year exclusive rights to Armenia’s market for fixed and mobile telecommunications services were a major condition for Greece’s OTE to pay $142 million in 1997 for a 90 percent stake in ArmenTel. Those rights were upheld by a clause in Armenia’s law on telecoms passed last year. Opposition deputies in parliament appealed to the Court earlier this month–arguing that the controversial Article 24 breaches the constitution–which guarantees "free economic competition."

In a highly ambiguous verdict–the Court found that "Article 24 contradicts the constitution" but at the same said that the existence of "natural monopolies" is not against the basic law. It obliged the government and parliament to enact a new law that would list those "economic spheres" where natural monopolies can exist.

"The government and National Assembly must find a legal solution … that will define the state policy with respect to natural monopolies," the ruling said. The Court also said the law on telecoms must be "brought into conformity with the constitution," without specifying what that should mean.

Despite the verdict–the OTE-controlled ArmenTel will be able to retain the exclusive rights. An Armenian law on foreign investmen’s stipulates that changes in the business legislation do not apply to foreign investors for five years if they choose so. "Article 24 will remain in force for five years because of the law on investmen’s," Justice Minister David Harutiunian said after the verdict was announced. Harutiunian was representing government interests during the proceedings.

Observers agree that the verdict was a major gain for the opposition as the Court has been largely loyal to the authorities ever since its creation in 1995.


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