Institute for War & Peace Reporting
July 21 2005
ARMENIAN PHONE FURY
More headaches in store for Armenia’s long-suffering mobile phone users.
By Rita Karapetian in Yerevan
The launch of a new mobile phone provider in Armenia has left the
cellular network close to collapse as overloaded frequencies fail to
cope with the increased demand.
The July 1 launch of Viva-Mobile ended the controversial monopoly
enjoyed for seven years by Greek-owned ArmenTel, but serious technical
problems have ruined the start-up.
Yerevan residents estimate that just one in ten phone calls are
getting through on either network, with one expert saying the country’s
cellular frequencies – which the two companies had agreed to share –
simply can’t cope.
“If I hadn’t paid so much money for this service then I’d probably
just throw my phone in the rubbish bin,” one journalist told IWPR.
Armenians have long complained of the poor quality and high cost
of mobile phone service in their country. The government has been
persistently criticised since it gave ArmenTel-owner OTE control
over both fixed and mobile lines several years ago in exchange for
140 million US dollars and promises to upgrade the system.
Viva-Mobile was given a license to launch an alternative service
following a series of lawsuits and counter-lawsuits between the
government and OTE, which ended up in a London arbitrage court.
The government, which retained a 10 per cent stake in ArmenTel in
its original deal with OTE, accused the Greek company of breaking
contractual agreements.
The two sides later agreed that OTE would forfeit its control over
mobile service in exchange for a monopoly position as Armenia’s lone
internet provider.
The appearance of competition in the market immediately triggered a
price war. Viva-Mobile announced prices much lower than those offered
by ArmenTel, which quickly responded by halving its prices.
However, having rushed to Viva-Mobile when the service was launched,
new subscribers immediately encountered problems.
Viva-Mobile officials blame the jammed lines on start-up problems.
ArmenTel representatives say they have no idea why their numbers have
also gone down and have asked the Armenian transport and communications
ministry to look into it.
Communications minister Andranik Manukian, referred the problem back to
ArmenTel, saying his ministry had nothing to do with technical issues.
Independent specialist Grigor Sagisian, the vice chairman of
the Armenian Internet Users’ Union, pointed out that ArmenTel and
Viva-Mobile were sharing frequency ranges and said that might explain
the glitches.
ArmenTel’s system was designed for a relatively small number of
users, he said, adding the companies might be forced to add more
base stations.
Adding to the controversy over the jammed mobile lines are lingering
questions over the ownership of Viva-Mobile, which some in Armenia
suspect has close ties to the country’s leadership.
During negotiations with the government, a law firm run by Vatan
Harutunian, the brother of Armenian justice minister David Harutunian,
represented Viva-Mobile’s parent company.
Brushing off allegations that Viva-Mobile had unfairly used government
connections, Vatan Harutunian confirmed his law firm had dealings
with Viva-Mobile, but said they began well before negotiations over
its mobile operator license got underway.
David Harutunian also denied any wrongdoing, saying Viva-Mobile was
chosen for its professionalism not its ties to the government.
Harutunian admitted, however, that Viva-Mobile’s relationship with
the unrecognised ethnic Armenian-controlled territory of Nagorny
Karabakh region was a factor in giving the company the license.
Viva-Mobile is owned by K-Telecom, controlled by the Lebanon-based
Fatush family, which also operates Karabakh-Telecom.
Karabakh’s international telecommunications were in danger of being cut
off as the result of an order from Azerbaijan, still internationally
recognised as having jurisdiction over Karabakh, which last year
forced foreign companies to sever their ties with Karabakh-Telecom.
With K-Telecom now re-registered as Viva-Mobile, an Armenian company,
it can connect Karabakh phone users to the rest of the world via
Armenia.
Rita Karapetian is a journalist with Noian Tapan news agency in
Yerevan.