The French mobile phone giant Orange on Wednesday confirmed Armenian media reports that it is close to selling its subsidiary in Armenia to another, locally owned telecommunication company.
Francis Gelibter, the chief executive of Orange Armenia, said the company is now negotiating with the Ucom operator that runs the country’s largest fiber-optic cable network providing broadband Internet and fixed-line telephone connections. He declined to give details of the talks or comment on chances of their successful conclusion.
Orange built and launched Armenia’s third mobile phone network in 2009 after paying 50 million euros ($55 million) for a government license. The two other local networks belong to Russia’s leading wireless operators, MTS and Beeline.
“Although the number of our subscribers has reached 650,000 in the past five years, we don’t have the kind of a market share in Armenia that would allow us to continue our operations,” Gelibter said, commenting on Orange’s desire to pull out of the local market.
The figure cited by him accounts for less than 20 percent of mobile phone subscribers in Armenia. Gelibter said Orange Armenia would have to branch out into fixed-line telephony, Internet and cable TV services in order to be able to increase its market share and thereby become profitable.
“Today it is true that Orange Armenia is not capable of offering these four types of services in a single package,” added the French executive.
Orange Armenia has posted losses totaling almost 185 million euros throughout its operations. It claims to have also invested 277 million euros in setting up its network covering the entire country.
Ucom is reputedly controlled by Armenia’s controversial Finance Minister Gagik Khachatrian. The company was founded in 2007 and has since become one of Armenia’s leading Internet service providers. It won a mobile telephony license in late 2013.
Gelibter insisted that Orange has faced no government pressure to sell its Armenian subsidiary to Ucom. He said the French giant itself offered to cut a deal with Ucom not least because the latter has Armenian, rather than “northern,” owners.