ARMENTEL ANNOUNCES NETWORK ENHANCEMENTS IN 2008

Global Insight
June 23, 2008

World Markets Research Centre

Armentel, the Armenian incumbent, has said that it plans to complete
the digitalisation of local telephone exchanges by the end of 2008 as
well as finalising the deployment of a nationwide backbone network. On
the operational side, the operator also has said that it will not
cut mobile prices after the introduction of a third mobile operator
in Armenia, but will focus on quality of services, including data.

Significance: Armentel’s acquisition by VimpelCom has hastened the
enhancement of its network and has also brought about an improvement
in the operator’s mobile ARPU, which has risen from $14US.5 in the
first quarter of 2007 to $18US.4 in the first quarter of 2008. The
enhancement of Armentel’s network will better place it to offset
increased competition from the MTS-owned VivaCell as well as emerging
competitors in the WiMAX space (seeArmenia: 16 June 2008:)