World Markets Research Centre
Global Insight
May 7 2010
Armentel Denies Increased Competition is Causing Price Cuts in
Fixed-Line Sphere
BYLINE: Michael Lacquiere
Armenian integrated operator Armentel has rejected the suggestion that
there is any connection between its reduction in fixed-line tariffs
and the entry into the market of new fixed-line operators. Armentel
general director Igor Klimko is quoted by ARKA as stating that he does
not recognise a link between the two phenomena, adding that he
welcomes the "desire and aspiration" of such new operators. Klimko has
also rejected the suggestion that Armentel exercises an influence in
the setting of fixed-line tariffs, insisting that this is solely in
the hands of regulator PSRC, and claiming that "it would be wrong" to
claim that tariff reduction is implemented at the request of Armentel.
Significance:Armentel dominates Armenia’s fixed-line sector, having
until recently operated as monopolist in the sector. Given its
position of dominance in the subscriber market, Armentel already has
an advantage over rivals, and it is therefore unsurprising that its
setting of tariffs is under scrutiny. Armentel generated 43.868
billion drams (US$116.1 million) from fixed-line operations in 2009,
equating to 60.4% of its total revenues in Armenia.