Armenian Regulator Optimistic About Emergence Of Competition In Fixe

Michael Lacquiere

World Markets Research Centre
Global Insight
July 18, 2008

Armenia’s Public Services Regulatory Commission chairman, Robert
Nazaryan, has indicated that he expects competition in the fixed-line
sector to emerge soon, reports ARKA. Armentel’s monopoly officially
ended in October 2007, although the operator remains a de facto
monopolist in the sector (seeArmenia: 3 October 2007:). However,
Nazaryan has pointed to thede jureremoval of Armentel’s monopoly,
as well as efforts by the Commission to institute new regulations
and rulings to ease the route of operators into the sector. He also
added that some companies have already begun construction of their
own fibre-optic networks.

Significance: Global Insight estimates that at the end of 2007,
fixed-line penetration in Armenia was around 19.8%, with 629,300
subscribers, following annual growth of around 3.4%. This compares to
the mobile sector, in which penetration rose to 57.4% in 2007 following
annual growth of 53.3%. Mobile uptake has been buoyed by the presence
of competition, with K-Telecom ahead of Armentel in the subscriber
market and a third GSM licence due to be awarded before the end of the
year. Despite the current disparity between the sectors, Nazaryan has
expressed his hope that the level of fixed-line competition may be
similar to that in the mobile sector "in the near future". However,
international trends suggest that this is unlikely.