ARMENTEL PLANS TO DOUBLE 3G COVERAGE FOLLOWING "EXPLOSIVE DEMAND"

World Market Research Centre
Global Insight
November 11, 2009

Armenian mobile operator Armentel has indicated that it plans to double
its 3G coverage in the country by the end of 2009, reports ARKA,
citing company CEO Igor Klimko. The network expansion means that 3G
services will be made available in Gyumri, Vanadzor, Echmiadzin, and
Jermuk. Although Klimko indicated that it was too early to comment
on the "commercial success" of Armentel’s 3G offering, launched in
October 2008, he did state that the group was experiencing "explosive
demand" for USB modems in the country.

Significance:Klimko has highlighted that a slew of new Internet
backbone operators are entering the Armenian market, and these can
help to drive down prices for wholesalers and retail customers alike.

The growing maturity of the Armenian mobile sector also explains
why 3G is growing in popularity, as penetration begins to approach
triple-digit level, customers become more comfortable with products
and demand improved services, and the market adjusts to the presence
of a third operator, Orange, having launched operations earlier this
month (seeArmenia: 6 November 2009:). Armentel may lag behind GSM
market leader K-Telecom, with market shares of around 19% and 81%
respectively, but was the first operator to launch 3G services. It
also has the advantage of being the dominant fixed-line operator,
giving it increased exposure to a large subscriber base, and offering
cross-selling and up-selling opportunities.