INTERNET CABLE SERVICING ARMENIA WAS SOLD, NO ARMENIAN BIDDERS PARTICIPATED IN AUCTION
Tert
Nov 24 2009
Armenia
Georgia has sold the cable that enters Armenia through the railway. At
an auction yesterday, Georgian Railways sold 100% of Georgian Railway
Telecom (GRT) shares to Link Telecom Georgia.
Georgian Railways press secretary Irma Stepnadze informed local
Armenian paper Capital that the Railway Telecom shares were sold for
$14,344,800 USD (the opening bid for the cable was $14,144,800 USD).
Stepnatze noted that, all in all, there were 4 bidders: 3 companies
were Georgian, while one was not.
The 600-km fibre-optic cable that stretches along the length of
Georgia’s railway belonged to Railway Telecom. It was created in 2000
from funding received from the European Union. It is through this
cable that the Armenian company Fibernet Communications connects to
the internet.
According to auction rules, the winning bidder is mandated, over
the course of three years, to implement reconstruction work on the
fibre-optic cable along the length of the railway.
The Railway Telecom bid was open to all. According to Capital, this
was a good opportunity to raise Armenia’s communication, safety and
internet connection reliability. From the perspective of developing
Armenia’s communication networks, it would’ve been beneficial for
Armenian companies to have participated in the bid.
Armenian internet providers in order to acquire the assets of
these Georgian providers (in the case that their own means were
insufficient), could’ve requested support from the Armenian government,
reports Capital.
ArmenTel has 6 internet lines with a connection speed of 155 Mb/sec,
five of which pass through Georgia. But this company doesn’t make
up a big part of the wholesale market; a substantial amount of the
internet is used for its own needs.
A serious player today in Armenia’s wholesale internet market is
Fibernet Communications, who takes up 90% of the market. That means
that a substantial portion of the internet coming into Armenia comes
through the Railway Telecom cable.
VivaCell-MTS, who leases a portion of Fibernet Communications’ cable,
brings in internet from Rostelecom through this cable for its own
needs. If an Armenian provider had acquired Georgian Railway Telecom,
it would’ve been possible not only to raise the reliability of internet
provision, but also to reduce fees.