World Markets Research Center
Global Insight
November 20, 2008
France Telecom’s Orange Receives Full Armenian Mobile Licence
by Peter Boyland
France Telecom’s Orange has officially received its Armenian mobile
licence, following an emergency meeting of the country’s regulator,
the Russian REGNUM news agency reports. Orange successfully bid 51.5
million euro ($65US million) for the full GSM and 3G spectrum licence
in October (see Armenia: 8 October 2008: ). Under the terms of the
15-year licence, France Telecom, operating under the Orange brand, is
obliged to provide GSM coverage to 43 cities in Armenia within two
years.
Significance:Orange firmly believes in the potential for the Group’s
development in the country, recently committing 200 million euro to
network rollout costs (seeArmenia: 13 October 2008: ). The operator
will now compete with the dominant K-Telecom, owned by Russia’s Mobile
TeleSystems (MTS), and Armentel, owned by Russia’s VimpelCom, which
have nearly two million subscribers between them. This level of
penetration, in Armenia’s population of around three million, means
the country is one of the more mature markets of Eurasia, with mobile
growth being stimulated by a poorly-developed fixed-line
infrastructure. Orange’s entrance into the market will clearly
stimulate competition, as it will put pressure on the existing Russian
duopoly to lower tariffs and improve service quality, while bringing
France Telecom’s huge mobile expertise to a promising new market.