Telecom Start up Offers Alternative Wireless Network for Armenia

YEREVAN (RFE/RL)–A newly created company has moved to take advantage of the government’s efforts to break the ArmenTel operator’s controversial monopoly on mobile phone communication in Armenia–promising to pour tens of millions of dollars into the underdeveloped sector.

The firm called Unified Communications Systems (UCS) has asked President Robert Kocharian to allow it to enter the business–its executive director told RFE/RL on Tuesday. Eduard Hakobian said the telecom start-up is ready to make 60 million euros ($75 million) worth of investmen’s in conjunction with a Russian firm for creating an attractive alternative to ArmenTel’s expensive and limited wireless services.

"We envisage to use state-of-the-art technology and equipment designed by [the French telecom giant] Alcatel," he said. "That company has drawn up a business plan–according to which our network would cover 95 percent of Armenia’s territory."

Hakobian says the new operator would need nine months to put the plan in practice and would charge subscribers considerably less than ArmenTel does.

UCS’s bid for an operating license comes after the Armenian government decided in principle late last month to revoke ArmenTel’s 15-year legal monopoly on wireless communication and Internet connection with the outside world–which had been granted to its parent company–the Hellenic Telecommunications Organization (OTE). The implementation of the decision was suspended until June 30 pending the outcome of the government’s legal battle with OTE in the International Court of Economic Arbitration in London

OTE argue that the exclusive rights were a key term of their $200 million purchase of ArmenTel in 1998 and that their unilateral abolition is therefore illegal. The government–for its part–accuses the Greeks of abusing the monopoly and failing to honor their contractual obligations regarding capital investmen’s and network capacity.

It is unclear who owns UCS and whether any senior government official has a stake in it. Hakobian referred to it as an "Armenian-Russian-American joint venture registered in Armenia." He said it also has ambitious plans to set up shop in neighboring Georgia.

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