Minister Blasts ArmenTel Over New Fees

YEREVAN (RFE/RL)–The minister of postal services and telecommunications–Ruben Tonoyan–warned on Wednesday the Greek-owned ArmenTel monopoly against introducing new fees before upgrading the bulk of telephone stations in Yerevan.

ArmenTel’s CEO Kiriakos Christodoulidis told a news conference on Tuesday the company plans to begin charging customers by the minute of local calls apart from the existing fixed fee of 900 drams (about $2) per month. Christodoulidis said Greece’s state-controlled firm OTE is free to set phone tariffs under the terms of its 1998 takeover of ArmenTel.

In March 1998–OTE paid $142.5 million for 90 percent of ArmenTel’s equity–pledging to invest $300 million in modernizing Armenian telecommunications over the next decade. In return–it secured exclusive rights to the market for telecommunications services in Armenia for 15 years. The Armenian government retained a 10 stake in the phone network.

"It’s difficult for us to change anything. But we will fight and will not allow [the new fees] until 75 percent of Yerevan is digitized," Tonoyan told RFE/RL in an interview.

ArmenTel has so far installed digital equipment in less than a quarter of the city’s phone stations. The Greek management’s attempt last January to charge users 8 drams (2 US cents) for every minute of conversation beyond a two-hour limit covered by the fixed fee met strong opposition from the government and population. The measure was delayed indefinitely. Christodoulidis said the per-minute fee will carry night and weekend discounts–and ArmenTel will also reduce its international tariffs. But Tonoyan countered that the mitigating incentives are vague.

Shortly before his assassination on October 27–the former Prime Minister Vazgen Sargsyan harshly criticized ArmenTel’s owners for what he saw as a delay with their promised massive investmen’s in Armenia’s telecom sector.

"Investment targets to which ArmenTel had committed itself must be met. And as soon as possible," Tonoyan said for his part.

A five-year business plan approved by OTE and the government last January envisaged $265 million worth of investmen’s in ArmenTel until the year 2003. Of that–$100 million was to be spent this year. Only $23 million has been invested so far though. But Christodoulidis insisted that OTE will meet its obligations by the end of the year. He said the ArmenTel has already signed contracts for the purchase of equipment worth $60 million–and another $40 million will be invested within two months.

Last September OTE agreed to pay the Armenian government $8.2 million as part of a deal to settle a tax dispute related to ArmenTel’s 1998 sell-off. The court settlement followed a lawsuit brought by Yerevan in June against OTE and ArmenTel’s former American shareholder–Trans-World Telecom.


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