EIGHT NOW IN HUNT FOR OTE’S 90% STAKE IN ARMENTEL

Tele Geography, DC
June 12 2006

Three leading Russian telecommunication conglomerates – Sistema,
Rostelecom, and Vimpelcom – have joined the hunt to buy a 90%
interest in Armenia’s largest fixed and wireless operator ArmenTel
from Greek telco OTE. The Russian companies will compete with five
other operators, MTC Kuwait, Armenia’s Sil group, Belgium’s Belgacom,
Hungary’s PanTel, and Etisalat of the United Arab Emirates. The most
serious rivals to the Russian challenge are expected to come from
MTC and Etisalat.

OTE announced its intention to sell 90% of ArmenTel shares in early
April 2006. The Armenian operator provides services to 595,000 fixed
line customers and controls over a half the country’s cellular market,
with more than 50,000 subscribers. OTE is pulling out following a
disagreement with minority shareholder – the Armenian government –
over the planned business strategy for the company. The state is said
to be opposed to plans to raise tariffs.