France Telecom to Launch Armenia Network in Fall

YEREVAN (RFE/RL)–The French telecommunications giant Orange will launch Armenia’s third mobile phone network this fall, the chairman of its parent company, France Telecom, was reported to say at the weekend.

Didier Lombard announced the news during a meeting with President Serzh Sarkisian held on the sidelines of the World Economic Forum in Davos, Switzerland. According to Sarkisian’s press office, Lombard presented Orange’s “short-term and long-term strategy” of doing business in Armenia.

The company was declared last October the winner of an international tender for the right to launch and operate the third Armenian wireless network. It paid 50 million euros ($65 million) for the license, outbidding two other European telecom firms short-listed in the government-administered contest.

“The President of the republic welcomed the company’s entry into the Armenian market, noting that it is an honor for any country to have a partner like France Telecom,” the presidential press service said in a statement.

“Didier Lombard noted that Armenia’s third telecom operator will be fully prepared to provide services to Armenia’s already this autumn, promising many interesting novelties and mutually beneficial solutions,” added the statement.

Orange’s desire to expand into Armenia came as a surprise given the small size of the country’s economy and the rapid expansion of its wireless market. An estimated 2.6 million of the country’s 3 million residents already have mobile phones that are connected to two networks owned by the subsidiaries of Russia’s two biggest wireless operators, MTS and Beeline. The largest of these networks, VivaCell-MTS, said last week that the number of its subscribers passed the 2 million mark last year.

An Orange spokesman, Bertrand Deronchaine, told RFE/RL earlier that Europe’s second-largest mobile operator is undaunted by the near saturation of the Armenian market for wireless services and hopes to attract a “significant” number of customers with “the best service at the best price.” He said Orange will put the emphasis on the so-called third-generation (3G) services such as video calls and broadband Internet connection.

ArmenTel, the Beeline-owned national telecommunications company, launched 3G services last year. VivaCell-MTS is expected to follow suit this year. A top executive from its Russian holding company, Oleg Raspopov, promised “continued massive investmen’s in innovation” at a news conference in Yerevan on Thursday.

According to government statistics, the Armenian telecom sector attracted $56 million in foreign direct investmen’s in January-September 2008. The impending launch of the Orange network means that the figure should be much higher in 2009.

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