By Gevorg Stamboltsian
Justice Minister David Harutiunian flew to London on Monday for talks with representatives of the Hellenic Telecommunication Organization (OTE) that seem to be a last-ditch attempt to reach an out-of-court settlement of the bitter dispute over the Greek-owned ArmenTel operator. The talks were due to start just one week before the entry into force of an Armenian government decision stripping ArmenTel of its lucrative and equally controversial monopoly on mobile phone services and Armenia’s Internet traffic with the outside world. The government accuses the OTE subsidiary of abusing the 15-year exclusive rights granted in 1998, pointing to the poor quality and disproportionately high cost of both services.
The Greeks strongly deny this, accusing Yerevan of breaching the contractual terms of their $200 million takeover of ArmenTel sealed six years ago. Earlier this year they filed a lawsuit to the London-based International Court of Economic Arbitration, reportedly seeking $600 million in compensatory damages. The court has yet to start hearings on the case.
Harutiunian has repeatedly sounded optimistic about the government’s chances of winning the court battle. But speaking in Yerevan late last week, he signaled a softening of the government’s position on the issue. “We will try to find ways of a settlement jointly with ArmenTel,” he said.
Harutiunian’s spokesman, Ara Saghatelian, clarified on Monday that the Armenian side is prepared to make “reasonable concessions” to OTE, but would not go into details, saying that “no concrete proposal is being discussed at the moment.” “No settlement can be achieved at the expense of the interests of Armenia and its people,” Saghatelian added.
Officials at ArmenTel confirmed the fact of the London consultations, saying that their newly appointed chief executive, Vassilis Fetsis, will be in attendance. It was not clear who will be representing OTE.
Meanwhile, Transport and Communications Minister Andranik Manukian suggested that the government will press ahead with plans to unilaterally break the ArmenTel monopoly. “This decision will come into force on June 30,” Manukian told RFE/RL. “There will probably be a new tender, new operators, and as a result of competition among them we will get higher quality and lower fees.”
The decision to revoke the exclusive rights, taken in February, was followed by a series of anti-trust cases against ArmenTel which were brought by Armenian Internet service provides before local courts and the state Commission on the Protection of Economic Competition. ArmenTel lost virtually all of them, prompting its previous chief executive, Georgios Vassilakis, to allege a high-level conspiracy against the unpopular telecom operator.
Vassilakis announced in late March that OTE is suspending capital investments in Armenia’s telecom sector in response to what the company sees as a government effort to squeeze it out of the country. The Greek giant, partly owned by the state, claimed last September to have already invested $182 million. The Armenian government says the figure is grossly inflated.