MOBILE DUOPOLY IN ARMENIA TO FACE NEW CHALLENGER IN 2008
by Michael Lacquiere

Global Insight
December 17, 2007

A third mobile operator is to join the Armenian market in 2008. The
chairman of the Public Services Commission of Armenia, Robert Nazarian,
is widely quoted as saying that an international tender will begin
on 1 May 2008, and intimated that the tender could by completed by
August 2008. The tender package is currently being prepared and is
likely to be approved within days. Each of the country’s existing
duopoly currently owns a 3G licence, but it is unclear whether the
new operator will also be granted one.

Significance:Nazarian has suggested that the arrival of a third mobile
operator in the country will help to improve service quality and
reduce prices. At present, the country’s two operators are K-Telecom
and Armentel, owned respectively by leading Russian operators
Mobile TeleSystems (MTS) and VimpelCom. The regional strength and
financial muscle of the Russian pair suggest that their dominance
of the sector will not be seriously challenged by a newcomer, but a
third operator should nevertheless benefit the market by encouraging
tariff reductions. An encouraging factor for the new operator will
be the fact that in 2005, within only two years of launch, K-Telecom
overtook former monopolist Armentel as the country’s most heavily
subscribed operator. Mobile penetration in Armenia was only 14.5%
at the start of 2007, and despite continued strong uptake this year,
there remains room for organic subscriber growth.

From: Emil Lazarian | Ararat NewsPress