Government Rejects Greek Offer to Settle ArmenTel Dispute

YEREVAN (RFE/RL)–The Armenian government began on Wednesday the formal procedures for breaking the ArmenTel operator’s monopoly on wireless phone and Internet services after turning down a negotiation offer from its parent company the Hellenic Telecommunication Organization (OTE).

The ruling cabinet instructed Transport and Communications Minister Antranig Manukian and Justice Minister David Harutiunian to draft corresponding changes to ArmenTel’s operating license and Armenia’s telecom legislation.

"The provisions ensuring ArmenTel’s monopoly on the mobile phone network and Internet traffic with the outside world will be removed," Manukian told reporters–saying the OTE has failed to honor investment commitmen’s since its 1998 takeover of ArmenTel.

The unilateral action follows last month’s non-binding ruling by the head of a state body that tried to adjudicate the festering dispute between the government and ArmenTel. The official–Eduard Muradian–concluded that the telecom firm has abused its exclusive rights.

The charges have repeatedly been denied by ArmenTel’s Greek managers who maintain that nearly $182 million has been invested in Armenia’s telecom sector for the past five years. The company’s chief executive–Giorgos Vassilakis–has said that the planned punitive action will be challenged in the London Court of International Arbitration.

The Armenian courts will have final say in the dispute. Manukian said that although the government is prepared for a court battle–it hopes that the Greek telecom giant will not file suit. "They would behave reasonably by not appealing to relevant international courts because our argumen’s are convincing," he said. "The most important of them is that the quality of telecommunication is very low in Armenia."

It became public on Wednesday that the government rejected an OTE offer to reach an out-of-court settlement. According to Manukian. "The decision has been made and it will be enforced," he said.

ArmenTel has meanwhile announced plans for a long-awaited expansion of its underdeveloped and overloaded mobile phone network. In a series of newspaper advertisemen’s this week–the operator said it will sell 20,000 prepaid phone cards starting late November and try to attract an additional 100,000 subscribers by July 2004. It said the wireless network will be enlarged to cover 85 percent of Armenia’s territory by the end of this year.

There are 74,000 mobile phone accounts in Armenia at present.

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