ARMENTEL MONOPOLY BLAMED FOR INTERNET FAILURE IN ARMENIA
By Anna Saghabalian

Radio Liberty, Armenia
Aug. 8, 2006

Armenia’s leading Internet service providers blamed the ArmenTel
telecommunications monopoly on Tuesday for a four-day effective
disruption of the country’s Internet connection with the rest of
the world.

The connection was cut off on Friday and was extremely slow in the
next three days due to what ArmenTel officials described as two
separate accidents on a fibro-optic cable that handles virtually all
of Armenia’s external Internet traffic. The Greek-owned company, which
has a controversial legal monopoly on the service, said the cable was
seriously damaged in neighboring Georgia and off the Russian Black
Sea coast and will not be fully repaired at least until the end of
this week.

A company spokeswoman, Hasmik Chutilian, told RFE/RL that the Internet
communication, which remained erratic on Tuesday, will be carried
out through reserve channels running across Georgia and Iran until
the repairs are over.

Service providers claimed, however, that the bulk of the Armenian
Internet traffic was rerouted to Turkey via Georgia. They also slammed
ArmenTel for its failure to put in place an alternative satellite link
that would end Armenia’s reliance on a single cable that regularly
gets damaged on Georgian territory.

According to Grigor Saghian of Arminco, Armenia’s largest Internet
provider, there have been at least two dozen such accidents since the
beginning of last year. "I am surprised that they are not creating
a reliable and fast satellite connection. It will cost them only
$100,000 or so," he said.

Earlier this year, the Armenian government obligated ArmenTel to
issue licenses to those providers that are willing to launch satellite
links and pay the telecom operate for using them. "ArmenTel is still
not giving those licenses," said Saghian.

Albert Tonoyan, deputy head of the Web.am provider, said his company
applied for a license several months ago and is still awaiting a
reply from ArmenTel. "The monopoly does not make ArmenTel interested
in finding quick solutions," he told RFE/RL. "They are only keen
to make money. They act as slowly as possible and invest as little
as possible."

The ArmenTel monopoly, a key term of the company’s 1998 takeover by
Greece’s OTE telecom giant, has long been blamed for the poor quality
and relatively high cost of Internet connection in Armenia. Analysts
consider it a serious obstacle to the development of information
technology, one of the new and most promising sectors of the Armenian
economy. The Armenian government has declared the sector’s expansion
a top economic priority.

The government has reportedly decided that the new owner of ArmenTel,
which was put up for sale by OTE last spring, will not inherit the
Internet monopoly from the Greeks. The latter are expected to announce
the winner of an ongoing international tender for ArmenTel by the
end of this month.

In the meantime, the providers are counting substantial losses which
they claim to be incurring as a result of the Internet disruption. In
Saghian’s words, it made a dent not only in their finances but
Armenia’s image in the international IT community.

"A single accident like this may have nullified several years of
work to promote IT in Armenia," said the Arminco executive. "There is
hardly any other country in the world that declares IT a top priority
but may have no Internet connection for several days."