SERZH SARGSYAN: RUSSIA HAS NEVER MISUSED ITS ECONOMIC LEVERS

Regnum, Russia
Nov 6 2006

The Armenian Government will approve the deal between OTE (Greece)
and VympelCom (Russia) for the sale of 90% of the shares of ArmenTel
telecom company, Armenian Defense Minister, National Security
Secretary and Co-chair of the Armenian-Russian Inter-Governmental
Economic Commission Serzh Sargsyan said on Nov 6.

REGNUM reports Sargsyan to say: "We should familiarize ourselves
with the terms of the deal and the sale price." Commenting on the
wide-spread opinion that the sale of a big number of Armenian strategic
facilities to Russia is dangerous for the country, Sargsyan said that
there is no danger in the growing Russian capital in Armenia as Russia
has never misused its economic levers.

To remind, on Nov 3 VympelCom announced that it had signed a contract
with Hellenic Telecommunications Organization SA (OTE) on the purchase
of 90% of the shares of ArmenTel, a telecom operator in Armenia. The
cost of the stake is 341.9mln EUR + almost 40mln EUR as ArmenTel’s
net debts and liabilities. The deal will be finalized by the end of
this year.

OTE bought the 90% stake in 1997 for $142.47mln. The remaining 10%
belong to the Armenian Government. This year OTE offered its stake for
tender. 16 companies took part in the tender but only 4 qualified for
the second round: Vympelcom, MTS (both Russia), ETISALAT (Emirates
Telecommunications Corporation/Istithmar ETV/-Emergent Telecom
Ventures) and VTEL Holdings/Knightsbridge Associates.

ArmenTel had enjoyed GSM monopoly till Nov 4 2004, when it renounced it
in exchange for monopoly in IP-telephony. As a result, K-Telecom with
its Viva Cell trade mark became the second GSM operator in Armenia.