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ARMENTEL FIRMLY RESOLVED TO PUT AN END TO QUEUES FOR CELLULAR COMMUNICATION

ArmenTel CEO Vasilios Fetsis says in an interview to ARMINFO

- Recently some Armenian media reported ArmenTel to have instituted a scholarship for Armenian students for them to continue their study in Greece. What is the goal of this action?

- To tell the truth it was the OTE International who decided to institute scholarships for students from Armenia, Romania and Balkan countries - the OTE investment markets. The OTE asked "Armentel" to distribute this information in Armenia and to study the possibility of increase of the scholarship for one or two students. Naturally we responded positively. I am very pleased that Armenia's youth will be given an opportunity to continue teaching in the Athens University. We hope that after getting education and an appropriate degree in Greece, they will be useful for both Armenia's society and the Armenian market. All the organizational work of this project "Armentel" will take upon itself, but the right of students' final election belongs to the Athenian university. Each young person may fill in a form and send it to the university. The program will be completed on June 29, 2005. All the documents should be presented by that time. "Armentel" will take upon itself all the expenses on covering scholarships for young Armenian specialists. That is 25.000 euro for one student, including expenses for flight, dwelling, food, purchasing of school-books, etc. This time only two students will study in Greece. We would like that one of them be an economist and the other - an engineer, though, the university itself will make a final decision.

- The Armenian legislation is said to be attractive for investing and contributive to business development. Do you agree with this opinion and what would you exclude as a foreign manager?

- A new Labor Code is taking force in Armenia June 21. Not being a lawyer I am not exactly informed of its requirements. But I am convinced that it should be aimed at establishing new modern relations. I hope that the new Labor Code will be more flexible for employers and more protective for employees and will improve employer-employee relationship in Armenia.

- Are you personally satisfied with Armenia's legislation?

- I have always said and will say once again that we will never comment on court decisions. This is our principle. We will accept any court verdicts be they good or bad. But to protect our principles we have nevertheless responded to the EU's request to comment on the state of affairs in Armenia by saying that we are quite sensitive to the court verdicts affecting our interests. It seems to us that sometimes Armenian courts are not thorough enough in examining ArmenTel-related issues. This is what we have told the EU about. I would like to stress that we will continue to see how this situation develops.

- I early 2005 you announced an intention to invest 50 mln EUR in Armenia's telecom this year of which 20 mln EUR in cellular communication. How is this program going?

- We are starting to sell a new lot of Easy Cards for almost 70,000 subscribers. I would not like to go back to the history of the introduction of cellular communication in Armenia but unfortunately today too we are faced with the problem of a queue for Easy Card in the country. This is inadmissible and harmful for the company's image. And so ArmenTel will do its best to eliminate the queue as quickly as possible - but never at the expense of the quality. The quality of ArmenTel's mobile services has got quite satisfactory of late and I am convinced that very soon the company will overcome all of its problems.

- When approximately will this happen?

- As you may well know a new mobile operator will appear in Armenia very soon. So we will not be alone. I don't know when exactly this will happen but I know that by Oct at the latest we will jointly have given Easy Card to all those wishing to have one. This is not a matter of obligations this is just estimates. Certainly there are commericla isues in busines but there are also the technical aspect of the quality, one thing we will never comprmise on

- I would not pretend not to be interested in your relations with your rival…

- Well, we have normal relations with K-Telecom. ArmenTel continues to be telecom monopolist in Armenia. According to our contract with K-Telecom we should provide them with a connection line and is already making technical preparations. We are cooperating openly and have no problems for the moment.

- If I am not mistaken your company is planning to invest in IT development too?

- This year ArmenTel planning to allocate 30 mln EUR for digitizing automatized telephone exchanges and developing information technologies n Armenia. We will install a new billing system to give the company access to all of its subscribers and to unite the whole network. This will also allow to improve the company-subscriber relationship. We are also planning to install data network to substantially enhance the quality of Internet

- This is important. Abroad I have seen people using Internet in cafes…

- I am convinced that the first positive steps in this direction will be taken already this year.

- In fact you should have already been the owner of the whole IP-telephonia. How is the real situation?

- I think that our IP-telephonia subscribers have already appreciated the quality of our services. Until recently we have not been employing this system as quickly as we would like to. Obviously there are illegal IP-telephonia companies on the market. We have informed of the situation the regulating body - Armenia's Transport and Communication Ministry - and are expecting it to respond adequately by undertaking all legal measures to prevent such instances.

- How long are you going to wait?

- We will give them time and but we may also discuss this problem with other concerned organizations and departments. But obviously this practice should be stopped on a legislative basis. Internet is now competing with telecoms which is affecting our profitability. It would be strange if we continued investing in telecoms knowing that its profitability is decreasing. Meanwhile I would like to remind you that ArmenTel continues to be Armenia's telecom monopolist.

- My last question is about ArmenTel's image. What are you doing in this direction?

- ArmenTel is about to make active efforts to increase its image. Of course it is impossible to change company's reputation within one or two days. Imagine a former convict coming back to everyday life. He will have to do his best to gain the respect of the society he now has to live in. I am sure that as early as next year considerable changes will be put to solve this problem. We, as a command of managers, from the director general to chiefs of departments, should add to our arsenal principles that we are going to develop. Integration, transparency, command work and, certainly, effectiveness are amongst them. A new and efficient salary accounting system, considering the level of education, abilities, experience and social issues, will be created for all the workers of "Armentel" at the end August, 2005. As of now we have reconsireed salaries for 2,000 least paid employees. This is a transitional step to a new system of wages.