ANDRANIK ALEXANYAN: INTERNET COMMUNICATIONS IN VERY POOR STATE IN ARMENIA

Arka News Agency, Armenia
Sept 4 2006

Below is an exclusive interview given to the ARKA News Agency by
Director General of the Arminco Global Telecommunications Andranik
Alexanyan.

ARKA: What is the state of Internet communication in Armenia? Do You
see prospects of its development in conditions of ArmenTel’s monopoly
over the market?

A. Alexanyan: Internet communications are in a very poor state
in Armenia. Prices are very high, of the highest in the world,
whereas the quality is low. This is the result of ArmenTel’s not
giving proper attention to the creation of an Internet communication
infrastructure. ArmenTel is abusing its monopoly and is not giving
proper attention to the development of Internet in Armenia, which has
a great future both as business and as an infrastructure. But ArmenTel
is not interested in this direction, because cellular communication
is more important for them. ArmenTel’s monopoly slowed down Internet
development in the country. We could have gone further and have a
greater potential. ArmenTel has certain problems, which affects
Internet users in Armenia. ArmenTel’s monopoly has not given us
anything good, and the Government must demand that a company execute
its contractual commitments.

ARKA: What measures need to be taken to prevent failures in Internet
communication, which has lately been the case?

A. Alexanyan: Unstable Internet communication in Armenia may produce
a negative impact on international investments in the country. I
know that a number of international companies left Armenia because
of low-quality communication and high prices. The fiber-optic cable
could damage, which can happen to every country. A communication
company must not restrict itself to only one communication line,
because it is not the first time the entire country has been deprived
of Internet communication. In 2006 alone, communication has failed
about 200 times. A company must have alternative lines. ArmenTel can
lay an alternative cable through Iran. However, this has not been
done for lack of necessary funds, unwillingness or for some other
reasons. Armenia is the only country having Internet access by means
on only one cable.

ARKA: What alternative ways of Internet development are available
in Armenia?

A. Alexanyan: An alternative way is the installation of two-way
satellite Internet. As far as I know the Government permitted the
installation of two-way satellite Internet. At the end of the month all
Internet-providers that want can install it. Competition will reduce
Internet prices, and the problem will be resolved. The installation
of this type of communication is expensive, but it will allow Armenian
Internet-providers to know their potential and have alternatives.

ARKA: What is Your assessment of Armenia’s IT market?

A. Alexanyan: Armenia’s IT market is in a disgraceful state. The
reason is a low level of education and culture in Armenia’s IT
sector, high prices for computers and lack of high-quality Internet
communication. The development of this sphere first of all requires a
higher education level, knowledge of English and opening of computer
classrooms in schools.

Armenia’s IT market has a shortage of specialists, which raises the
value of professionals. Society has come to realize the importance
of this sphere, and the entry to the specialized departments is
rather large now. In five years we will have a necessary number of
specialists, and the problem will be resolved. The second problem is
a high price for computers, which is the result of high customs dues
on the import of computers. Customs dues should be reduced. If the
price of equipment and Internet is reduced and higher schools turn
out relevant specialists, information technologies will become part
of everyday life. Also, international investors will enter the market.

The development of the IT sphere requires the specification of policy
and elaboration of rules of the game on the market. No specific
measures are being taken. Perhaps, they will be in future. Relevant
legislation needs to be drafted. The world IT market is rapidly
developing, and we annot keep pace with it.

ARKA: How many customers does Arminco have? What is the company’s share
on Armenia’s Internet market? What is Your assessment of competition
between the country’s Internet providers?

A. Alexanyan: I would not like to cite any figures because it would not
be honest. But I can say that Arminco has more customers than other
Internet-providers, as the company is the first Internet provider in
Armenia and has made large-scale investments. The State Commission
for Protection of Economic Competition recently recognized Arminco a
dominating company among Internet providers. This is binding, and we
are seeking to do more. There is healthy competition on the market,
and the providers are learning much from one another.

ARKA: How many Internet users are there in Armenia? Tell the dynamics
over the recent years, please.

A. Alexanyan: I cannot cite the exact figure, but their number is
about 100,000. 30% of them are corporate, others individual users.

This calculation is based on the number of computers imported to the
country. The number of Internet users is rapidly increasing, because
IT is becoming an integral part of everyday life and a means of
business. However, its potential is not used to the full degree. For
example, very many gifted people in Armenia’s regions are deprived
of Internet access.