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ARMENIAN REGULATORS TO BLOCK RISE IN PHONE TARIFFS
By Shakeh Avoyan
Radio Liberty. Czech Rep.
July 9 2007
State regulators will almost certainly reject a steep rise in the
prices of fixed-line telephony sought by Armenia's Russian-owned
national telecommunication company, officials said on Monday.
The ArmenTel operator formally asked the Public Services Regulation
Commission (PSRC) to allow it to raise the tariffs last May, saying
they have remained unchanged for the past several years and should
be revised upwards in order preserve its profitability.
In particular, the company wants to nearly double a fixed fee of
1,100 drams ($3) covering up to six hours of outgoing local phone
calls made by a single network subscriber every month. Those users
who exceed that limit are currently charged 5 drams (1.5 U.S. cents)
for every extra minute of phone conversations.
ArmenTel wants to reduce the six-hour limit and raise the per-minute
charge to 9 drams. In return, it would further cut its prices of
external phone calls.
A member of the PSRC, Shiraz Kirakosian, told RFE/RL that the
regulatory body has looked into the tariff request and will likely
turn it down on Friday. He said the commission will argue, among
other things, that ArmenTel has underestimated its profit margins
and can therefore successfully operate under the existing tariffs.
Kirakosian indicated at the same time that the PSRC is ready,
in principle, to accept a more modest price increase. "We need to
continue our discussions with ArmenTel," he said.
The PSRC has rejected similar price hikes in the past when ArmenTel was
owned by Greece's OTE telecom giant. OTE sold its 90 percent stake in
ArmenTel to Russia's second largest cellphone operator, VimpelCom, last
November in a $500 million deal approved by the Armenian government.
One of VimpelCom's first steps was to abandon ArmenTel's controversial
legal monopoly on Armenia's Internet connection with the outside
world. The move is expected to make the service more affordable
and faster.
By Shakeh Avoyan
Radio Liberty. Czech Rep.
July 9 2007
State regulators will almost certainly reject a steep rise in the
prices of fixed-line telephony sought by Armenia's Russian-owned
national telecommunication company, officials said on Monday.
The ArmenTel operator formally asked the Public Services Regulation
Commission (PSRC) to allow it to raise the tariffs last May, saying
they have remained unchanged for the past several years and should
be revised upwards in order preserve its profitability.
In particular, the company wants to nearly double a fixed fee of
1,100 drams ($3) covering up to six hours of outgoing local phone
calls made by a single network subscriber every month. Those users
who exceed that limit are currently charged 5 drams (1.5 U.S. cents)
for every extra minute of phone conversations.
ArmenTel wants to reduce the six-hour limit and raise the per-minute
charge to 9 drams. In return, it would further cut its prices of
external phone calls.
A member of the PSRC, Shiraz Kirakosian, told RFE/RL that the
regulatory body has looked into the tariff request and will likely
turn it down on Friday. He said the commission will argue, among
other things, that ArmenTel has underestimated its profit margins
and can therefore successfully operate under the existing tariffs.
Kirakosian indicated at the same time that the PSRC is ready,
in principle, to accept a more modest price increase. "We need to
continue our discussions with ArmenTel," he said.
The PSRC has rejected similar price hikes in the past when ArmenTel was
owned by Greece's OTE telecom giant. OTE sold its 90 percent stake in
ArmenTel to Russia's second largest cellphone operator, VimpelCom, last
November in a $500 million deal approved by the Armenian government.
One of VimpelCom's first steps was to abandon ArmenTel's controversial
legal monopoly on Armenia's Internet connection with the outside
world. The move is expected to make the service more affordable
and faster.