news.am, Armenia
Jan 7 2010
Armen Grigoryan: Armenia lays claims to regional IT leadership
14:09 / 01/07/2010Below is an interview with Armen Grigoryan,
Secretary of the Council for IT Development
NEWS.am: The 3G network was recently introduced in Armenia’s
telecommunication sector. It is unavailable even in Russia now. And 4G
is even being talked about. In the context of certain activity, can we
say Armenia is one of the regional IT leaders?
A. Grigoryan: I can say that Armenia is on the right way rather than
one of the regional leaders. Since our country is very small, I am
sure it will become world leader in a couple of years. For example,
the equipment the Orange Company is installing in Armenia is not
operating even in France. They are faced with the problem of
re-equipment there. In this aspect we, of course, will be leaders.
NEWS.am: Competition between large companies has recently brought
about obvious changes in customers’ favor. The Orange Company’s entry
to our country had a great effect. Let us talk about it and its impact
on Internet services development.
A. Grigoryan: No doubt, Orange is Europe’s leading company rendering
new telecommunication services, especially various types of mobile
communication ` mobile TV and others. It is an ordinary service in
Europe. The companies that were informed of the Orange Company were
well aware of that, which caused other companies, particularly
VivaCell MTS, to start rendering the same services even before Orange
came to Armenia and introduced its services. ArmenTel too is
installing equipment to be able to compete with other companies. All
that had rather serious influence on the market. Companies start
rendering new services as soon as possible so as not to remain behind
their rivals, which, under different circumstances, they may not have
done during the coming two years.
NEWS.am: At present, large mobile communication companies also render
affordable wireless Internet services. What is Internet providers’
future? Can we say the companies will `complete’ their work during the
coming few years?
A. Grigoryan: Day after day Internet services are developing
simultaneously with mobile communication services. Indeed, small
Internet providers are now facing serious problems ` they cannot stand
market competition and their offers, potential and investments are
insufficient as compared with such giants as ArmenTel, VivaCell MTS
and Orange Armenia or, say, ADC. The last named carried out tremendous
work to render special Internet services ` it laid fiber-optic cables
throughout Yerevan and so on. Competition causes companies to reduce
their prices. Some representatives of small companies express fears
about the dumping prices set by large companies, which makes the small
ones’ activities `unjustifiable.’ Of course, large companies are able
to make up for their losses due to revenues from other services.
I think it is normal. It is international practice ` the market itself
regulates everything. Unfortunately, the companies that cannot stand
competition have to close down. On the other hand, I cannot conceal
the fact that, several years ago, the same small companies received
superprofits without doing anything. For example, they leased a 5GB
channel and signed contracts with a `thousand’ companies for up to
20GB. That was fraud ` they disconnected some and connected others
thereby ensuring superprofits for themselves. This time is past, and
now every client wants to have round-the-clock Internet communication
and buys this service from the provider ready to render it.
Of course, some of the companies ` Arminco, Web ‘ are still working on
the market. But they have to make huge investments to stand
competition.
NEWS.am: Mr. Grigoryan, what about Internet prices `are they high or
low in Armenia? What is the price-quality relationship?
A. Grigoryan: Price changes are evident, but it would be wrong to say
that prices are best in Armenia. In any case, prices have rapidly been
changing in Armenia over the last one or two years, showing a downward
trend, with the Internet communication quality improving. Of course,
was not fully satisfied with the quality of services. We will be
satisfied after the prices go down to the international level. On the
other hand, the development of Internet communication in Armenia is
facing a number of problems, and we cannot compare with developed
European countries. Traffic channels are an expensive treat. Also,
Internet is affordable there ` the number of users is large, so the
service is cheaper. But I would like to note that the positive
dynamics is highly promising in Armenia. The development will reduce
prices, and Internet services will be universally affordable. As
regards the quality, companies have to ensure quality now. Otherwise
they will lose their customers. People want to watch movies or talk by
means of Skype, they are not contented with using e-mail alone. All
the main services are now available for U.S. $30 in Armenia just as in
other countries. The quality may be higher there, but I think the
progress will be more appreciable in a year.
NEWS.am: In this context, what is the role of the Government or of the
Council for IT Development?
A. Grigoryan: The Government’s role is resolving political problems,
which, in turn, helps resolve economic problems, especially such
problems as the improvement of the Armenian-Turkish relations.
Larger-scale changes can be expected then. At present, ArmenTel is
negotiating the laying of a fiber-optic cable from Turkey to Armenia,
bypassing Georgia, with the Turkish side. If the problem is resolved,
higher-quality Internet services will be available at a price twice as
low. Such large companies as ArmenTel, VivaCell MTS and Orange Armenia
have taken interest in this. It will quickly make Armenia a country
where Internet services of European quality will be available.
Our Councils’ task is to ensure equal competition to prevent any
violation of others’ rights ` be it by the Government or by any
private company.
I would also like to address one more important task, namely,
combining. High-speed Internet connection will enable any personal in
any part of Yerevan to watch Armenian TV channels, have quick access
to Armenian websites and so on. This all depends on the traffic inside
the country. We have not a normal network inside the country. The
Government is trying to contribute to this now. The RA Ministry of
Economy elaborated a concept of forming an internal network. In
Armenia, most of the information is outgoing to become incoming later.
For instance, to get information by means of VivaCell you have to send
a signal to the United States or Europe, which later returns to
VivaCell. The problem can be resolved: VivaCell can be directly
connected to Orange Armenia and vice versa. At present 90% of
information leaves Armenia to return later because the country has not
an internal network and proper combining conditions. The formation of
an internal network will enhance the efficiency of equipment and
reduce expenses.
NEWS.am: What are your forecasts about the Armenian telecommunication
industry for the next few years?
A. Grigoryan: Since all the three mobile operators in Armenia are
world-famous telecommunication companies, we will see further
development. One more important factor, namely, the formation of
Armenian content, can further this development. The Armenian content
must be developed for the innovations to be available to any Armenian.
T.P.