Armenian regulator fines ArmenTel for antitrust violations

Prime-Tass English-language Business Newswire
August 12, 2005

YEREVAN, Aug 12 (Prime-Tass) — Armenia’s State Commission for the
Protection of Economic Competition has imposed a U.S. USD 400,000 fine
on Armenian national telecom company ArmenTel for alleged violations
of antitrust laws, the commission’s Chairman Ashot Shakhnazaryan
said Friday.

The fine was set at 1% of ArmenTel’s profit from GSM mobile services,
Shakhnazaryan said.

ArmenTel failed to provide stable and high-quality communications in
June-July, Shakhnazaryan said. He added that a mobile operator should
ensure that at least 95 calls out of 100 be connected, but ArmenTel
did not match this requirement.

Artak Khachatryan, an ArmenTel spokesman, said that the commission
had not set any call standards for the company and that the 95%
level was far above the 60% one set in ‘developed countries.’

‘The company did in fact provide low-quality communications but
the customers were warned beforehand about these problems. Besides,
technical problems that arose on June 30, of which the company had
warned, didn’t affect the customers. However a major network failure
occurred on July 1 during the launch of the services of the second
mobile operator,’ Khachatryan said.

K-Telecom, the second operator, launched its network on July 1 and
operates under the Vivacell brand.

Earlier ArmenTel has held a monopoly to provide GSM services in
Armenia. However, in November 2004 the Armenian government decided
to make amendments to ArmenTel’s license, depriving the company of
its exclusive right to provide GSM, mobile satellite and mobile radio
communication services in the country.

Greece’s OTE holds a 90% stake in ArmenTel, with the Armenian
government holding the remaining 10% stake. End