INTERVIEW OF DIRECTOR GENERAL OF ARMENTEL CJSC OLEG BLIZNIUK TO ARMINFO AGENCY
ArmInfo Agency
2007-04-26 16:12:00
Armenia Deserved the Right to Be Ahead of Universe
Mr. Blizniuk, on April 12, RA President claimed of possibility of
solving the problem of ArmenTel’s monopoly to fixed communication in
September. In your opinion, how much real it is to manage in terms?
– The terms are quite real. We plan to solve the issue of monopoly
by October-November, 2007. On the whole, we intend to manage
in October. You see, the problem is in the complexity of the
juridical and technical support. It’s not so easy as it may seem
prima facie. However, we shall try to manage in terms. Believe me,
we are not afraid of possible deprivation of sole rights to the fixed
communication, especially as the "VympelCom" got used to work under
conditions of severe competition. Moreover, in case of exclusion of
monopoly, our hands will be loosen during implementation of projects
of interest, on one hand. On the other hand, it will allow to work
without a backward glance at the primary competitors. We are sure
that the refusal from monopoly in the telecommunication market of
Armenia will do good to the consumers. Yet, the problem of quality
arises here. If other companies, besides us, are present in the
market, which will be able to assure the same high-quality and
reliable service, everybody will be glad of it. The point is how
much qualitative these services will be. If we refuse of monopoly,
the license for the telecommunication activity will be received
by many companies, that may cause problems, since these companies
should have not only juridical but financial assurance as well. This
should not be a server-provider in a cellar with one computer and
rendering of communication services by stealth . This must be a
company that is responsible for both the service, the quality and
the prices. In case of mass distribution of licenses, the risk of
consumer’s facing a low-grade services increases that, in its turn,
may entail complaints. Who will answer for this? The license must be
provided by something. Several rather strong provider-companies are
presently available in the telecommunication market, among which the
Arminco, Externet, Web and others, which we see the competitors.
Otherwise saying, the consumer should deal with the companies which
are seriously present in the communication market and are ready to
work with their clients openly and render high-quality services.
– What the intention of putting off the terms of the programme
fulfillment for providing the Armenian villages with digital
communication is stipulated for?
– This programme is rather material-capacious and requires great
investments. But the point is not even in investments. Prior to
the sale of "ArmenTel" to the Russian "VympelCom", the major part
of the Company’s commitments was frozen, that is clear, since the
previous owner did not want to spend extra money. In particular, the
contracts with both the equipment suppliers and the contractors were
suspended. It was the end of November when we came to the Company. Some
time was necessary to clear up the situation. After the contracts
resumption we were short of time. Moreover, the difficult weather
conditions, caused by heavy snowfalls and frosts, also complicated
the situation. To note, the matter concerns the installation of
telephones in backcountry districts, where the snow cover has not yet
fallen. Nevertheless, the work in this direction was going on. Now,
the programme is under completion.
– In how many villages the telephones are still to be installed?
– They number less than 200. It should be noted that the programme
is carried out in accordance with our schedule and the Company will
manage in new terms. The telephones have been already installed in
over 600 villages, while the network operation area numbers about 1
mln of subscribers.
– If one may claim that the whole system will be digital till the
end of the current year?
– I would not say so, as the digitization includes not only the
installation of the new equipment, but the replacement of the old one
as well. About 400 ATS require replacement, and we shall hardly manage
to do that till the end of this year. We intend to reduce the level of
digitization to 80-90% within 1,5 year. We purpose to provide about 1
mln subscribers with high-quality service by CDM standard. Presently,
we are studying the possibility of buying a terminal to assure access
to the fixed network. We shall obtain new technologies in this case
that will surpass the presently used ones by one degree. The matter
concerns quite new opportunities, that is, the data rate, high-quality
Internet, an excellent automatic outlet to any country of the world.
-If there is any general estimation of this programme? How much will
it cost?
– Yes, there is such an estimation, but I have no right to make it
public. I can only say that it is a question of several millions of
dollar. The company intends to attract the money at the expense of
its own means. The "VympelCom " operates rather efficiently.
– Do you think there is a bona fide competition in the Armenian
telecommunications market?
– As for the "ArmenTel", that is part of the "VympelCom" group,
it got used to work fairly and openly. I would not answer for all
the competitors since it is on their own conscience, and it would be
incorrect to comment on their actions. If we say that the "VympelCom"
is a company that respects itself and behaves correctly in the market,
let us see how the others behave.
– How do you treat the critics about "ArmenTelÂ"?
– It is easy for us to prove out right about the adequacy of our
actions in the market. We make no dumping when carrying out, in
our opinion, an absolutely correct price policy. Our goal is not
to increase the cost of the rendered services but attract the new
subscribers, who would talking as much as possible. It is possible
only in case if the prices are lower. Our equipment, at the cost
of several million of dollars, is not loaded even by 50%. It is
unnecessary to talk about the rise in prices in this situation. In
view of this, I treat the critics very easy, however, this critics
should be constructive.
There were some requirements during the last session of the Public
Services Commission concerning the punishment of the Company for
non-fulfillment of the programme on installation of telephones in
Armenia’s villages on term. Well, we shall be punished, what then? I
consider this requirement a quite non-constructive critic. At this
background, the Commission itself, with which the negotiations
had lasted several months, acted quite soundly, especially as
the Company with its brand is the republic’s common property. The
Company pays very high taxes, being the second one by the volumes of
allocations to the republic’s state budget. It is also incorrect when
the Company is represented from the unattractive viewpoint, that is
done by the private persons who try to place the "ArmenTel" under a
general political level. The goal of the public organizations, which
deal with the protection of consumers, is to establish the contacts
between the producers and the consumers of services.
– As far as we know, the "ArmenTel" intends to implement the NGN
system this year. At what stage is the programme implementation and
what does it represent?
– These are quite new technologies which we intend to implement
in Armenia.
The purpose is to make the service as much convergent as possible,
that is, a strong mobile communication from one platform. This will
entail the replacement of equipment and all the service platforms. We
schedule to complete all the juridical aspects with the conducting of
an international tender for selection of the equipment supplier within
the next 1,5-2 years. The implementation of the project will start
close by the end of 2007. The newest and the best equipment will be
delivered. We have an excellent chance to implement the NGN system,
i.e. the availability of both the fixed and cell communication.
Thus, all the talks that the "VympelCom" does not know about the
fixed communication, are irrelevant. Believe me, it has gained the
understanding of it.
Armenia and its people with such history are worthy to be ahead of
the Universe.
Unambiguously, with the programme implementation, the consumers will
be enabled to enter the wideband Internet, create media-services,
etc. Other additional services will be also developed, besides NGN,
including the wireless Internet, which will allow the consumers to
receive the maximum package of services. In general, the problem of
Internet is painfully perceived in Armenia.
The "ArmenTel" will do the best in this direction for our subscribers
be able to get the maximum number of services. We have recently
introduced one novelty more, that is, the subscribers are enabled
to easily enter the Internet through 4 eight. I think, this kind of
service will be demanded.
– Last year, there was a question of creating a standby MTC in the
structure of "ArmenTel". What stage is this project at?
– A very serious work is being presently carried out over this
project. We have two stations under operation at this moment. We
consider the issue of implementing the third MTC, and I think we
shall succeed in its fulfillment. The equipment suppliers will be
determined in April by tender. We intend to do the maximum in 2007
to start the process of transfer to the absolute digitization in 2008.
-You have noted the new services in the Internet system. What does
it give to the Company?
– You know, this is not the basic part of our business, and the gain
in a percent ratio is quite small. However, we have to do that from
the viewpoint of social direction.
– The "Veles Capital" Russian Company estimated the efficiency of
"ArmenTel" by 48,6% by EBITDA system, among the "VympelCom" companies.
– I think this indicator is very high. For comparison, the EBITDA in
metallurgical industry makes up 23%. Meanwhile, the investments in
the communication have always been long-term. The world experience
shows that the investments return starts in 5-6 years, while we have
managed to return the investments in 1,5-2 years. In view of this,
the level of profitability of about 50% is a very high indicator. It
exceeds 20-30% in other countries.
– What level do you intend to reach by the end of 2007?
– The goal is not to lessen but increase…
– As far as I know, the "ArmenTel" starts the process of medical
insurance of all its 5,000 employees. If it won’t set you back a bit?
– This is part of the social package present in "VympelCom". Since the
" ArmenTel" is in the group of "VympelCom" companies, this process
covers, of course, the Company’s employees. All of us understand that
there has never been such a process in "ArmenTel". It is important
to us for our employee be able to receive all the kinds of services
in a medical establishment free of charge. We are implementing a good
social programme, including the wages and the transparency of awarding
bonuses. Everyone gets per the work, the bonuses vary. Therefore,
the "VympelCom" is one of the most attractive companies in Russia. We
intend to implement something like that in Armenia for every employee
be proud of working in "ArmenTel".
Alexander Avanesov, ArmInfo, April 26
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