LEBANESE OWNER RULES OUT SALE OF ARMENIAN WIRELESS NETWORK
By Shakeh Avoyan

Radio Liberty, Czech Rep.
July 12 2007

A Lebanese company that owns Armenia’s largest mobile phone network
said on Thursday that it has no plans to sell its subsidiary despite
what it described as a strong interest shown by other foreign
investors.

An Armenian newspaper report earlier this week said that Russia’s
largest mobile phone operator, MTS, has offered to purchase the
VivaCell network from K-Telecom. Another Russian wireless operator,
VimpelCom, already bought Armenia’s national telecommunications
company, ArmenTel, for about $500 million late last year.

K-Telecom’s Lebanese-Armenian chief executive, Ralph Yirikian,
declined to confirm or refute the report, saying only that many
foreign firms are impressed by VivaCell’s successful operations and
would like to buy it. But he insisted that K-Telecom will not sell
it in the foreseeable future.

"Right now VivaCell resembles a gorgeous and wealthy young woman
courted by many bachelors keen to marry her," Yirikian told
reporters. "They keep calling her, asking her to go out with them.

But the girl tells them, ‘My life is only just beginning, I don’t
want to get married as I have a lot of things to do and will think
about that later.’"

Yirikian added that K-Telecom is only prepared to sell minority stakes
in VivaCell and plans to become a public company for that purpose. "We
are going to be listed on the stock exchange so that our subscribers
and employees can become shareholders in VivaCell," he said.

The owner of K-Telecom’s Lebanese parent company, the Fattouch
Investment Group, similarly indicated that it has no intention to
leave Armenia any time soon as he celebrated the second anniversary
of VivaCell’s launch with company executives in Yerevan on Thursday.

Pierre Fattouch said the group has since invested about $340 million
in its Armenian wireless network and plans to further expand its
operations in the country.

"The Group is quite excited about the future of this country and will
be expanding its investments to cover other sectors," he said.

Fattouch also revealed that the number of Armenian cellphone users
subscribed to his VivaCell has passed the one million mark, giving his
company a commanding 70 percent share of the local market for wireless
services. "The one million is just the beginning and we are actively
expanding our network to a capacity of 1.5 million subscribers as
well as preparing the launch of third generation services," he said.

VivaCell’s launch in July 2005 came several months after the Armenian
government forced the then Greek-owned ArmenTel to abandon its legal
monopoly on mobile telephony. The development led to an explosion
in mobile phone use in the country as fierce competition between
ArmenTel and VivaCell dramatically reduced the hitherto high cost of
the service.

That competition developed into a price war last year, with the
two operators accusing each other of unfair competition and seeking
sanctions from a state anti-trust body. According to Yirikian, they
both withdrew their applications to the Commission on Protection of
Economic Competition after reaching an amicable settlement earlier
this year. He did not give details of the deal.