ArmInfo’s Interview with Director of “Arpinet” Ltd, Armen Muradyan
by Erik Abrahamyan
Besides such big players at the communication market of Armenia, as ArmenTel, Vivacell-MTS, Rostelecom, Ucom and other big companies, there is still room for representatives of small and medium-sized business. It is especially important that many of them have been functioning in the regions and covering by their activity the “gaps” which are not interesting to the big players from the point of view of their effectiveness. The provider company “Arpinet” working in the Armavir region of Armenia, is one of them. It is a bright sample of the client-oriented company which offers Internet and is going to enter the IP – television segment.
Director of “Arpinet” Ltd, Armen Muradyan, tells about development of the regional provider business, its problems and future programmes.
Will you please tell about the history of your company? When was it created? What services does it offer?
Our company “Arpinet” Ltd was founded in 2007. We work in the telecommunication sphere and offer Internet and IP-television to individual and legal persons. We started offering Internet in Etchmiadzin in 2007. In fact, in 2008 we also started offering Internet to the nearby villages of Etchmiadzin. In 2011 our company fully upgraded its infrastructure, as a result of which people in Metsamor and Armavir and nearby villages started using Internet offered by us. We have also managed to open our offices in several villages.
Is it easy to survive at the market where the telecommunication sector has been developed rather good even versus several European countries? Don’t you scare to bankrupt because of strong global competitors?
Our company has been working in those sectors of the market, which the big companies do not pay attention at, as “game is not worth of candle”. However, our company is not the only one in Metsamor and Oktemberyan towns, Rostelecom also offers its services there. As for Etchmiadzin, here Beeline, Orange and Vivacell also offer their Internet services. However, we often offer Internet through the fiber-optic cable with a transmission capacity up to 1 Gbt/s, but the above mentioned companies – the Internet of the third generation (3G) or ADSL.
I would like to draw you attention at a very much important moment – “Arpinet” is the only company in Armenia which offers the fiber-optic Internet to villages.
But to implement such a large-scale activity you needed big investments, did not you?
Yes, we did. Like any other business, we needed investments. And Ameriabank became the investor and the lever for development of our business. The bank has turned to be flexible and offered services for more convenient conditions. Thanks to the support of Ameriabank, we have managed to transfer from the category of small to the medium-sized business. Through crediting us many times, the bank gave us the chance to grow, to develop end improve our activity.
As a result, we have created and developed the net and started launching the IP-television, the only one in the region. The unique character of the last product is that a client having a BOX will be able to join the Internet even through an old TV-set. Communication in social networks, currency exchange rates, weather, information and video portals, Skype, books and games have been already integrated in our Arpinet IPTV box. The box functions at Android system, it is made in the “all inclusive” format. If a client makes a one year contract with us, the box is given to him free of charge.
To succeed, the company should have competitive privileges. What is special about your company?
Here is the formula of our company: “speed-quality-price”. We offer not only high-speed Internet, which does not lag behind the Internet offered by other companies, but also have permanent contact with our clients provided by the Call Center working in 24/7 regime. And an absolutely free of charge service is one of the main privileges of our company. The policy of our business is orientation on a client. We have many different marketing actions for clients which have been using services of “Arpinet” for more than a year. We have a bonus system for permanent clients, which supposes increasing of the Internet speed, offering new services for lower tariffs, etc.
As we know, business cannot stand still. You should expand the spectrum of Internet services and increase the customer base to be able to compete. Have you got any specific plans?
You see, the material condition in rural communities leaves much to be desired. So, not all villagers can afford Russian-language digital TV channels. We are planning to provide all villages of Armavir province not only with high-speed Internet (up to 1 GBIT/sec), but also with IP television. We were granted the relevant license in 2013. By the way, we will also be able to implement the project due to Ameriabank’s loan the company is going to receive in spring 2014.
There are cases when a company specializing in some activities is also engaged in related activities. What about your company?
We are also engaged in related activities. These are stores of computer facilities. If a customer buys a computer, a notebook or a tablet and concludes an agreement with us for a year, we provide him/her with 3-month free Internet, and if the customer concludes the agreement for a month, we provide him/her with 1-month free Internet.
Our online store does work yet, but we are planning to open it in 2014. We have 6 offices not only providing Internet services but also selling computers. As soon as the online store is launched, the customers will be able to choose the goods and receive them immediately with delivery home. Moreover, the delivery will most likely be free.
At the moment we are developing one more product of ours – an online cinema - www.arm-tube.am. By the way, it is probably the only video hosting in Armenia, i.e. it is connected to the .am zone, and if there is some Internet failure in Armenia, the user will be able to continue watching the films. In addition, we are going to set up our cash servers at various providers, which will accelerate the operation of our video hosting even more and will ensure stability. It should be noted that this is the only operating product, within which we try to cooperate with the film producers. The ice has broken up. There are already some examples such as Poker.am and Jubilee Visitor. One can watch the films free of charge with commercials or on a paid basis without commercials. Payments are made through the local Idram and ArCa systems or international MasterCard, Visa, PayPal, WebMoney and other systems.
Many citizens of Armenia are becoming labor migrants due to the hard economic condition of the country. One of the advanced methods of communication between the relatives is software for video and audio calls (e.g. Skype). So, there is a category of people who need Internet for these purposes only.
You are absolutely right. We have recently conducted a survey and revealed the category of people who use Internet for that purpose only. And now we are working at creation of such an inexpensive product.
As far as I know, you provide symmetrical Internet and IP television to individuals and legal entities. What shares have they got in the total customer base?
Individuals are the major part of the consumers.
Everybody knows that wages and prices in towns differ from those in villages.
Active measures are currently being taken to provide the rural communities with fiber-optical Internet. So, in rural communities, where Internet connection is ensured through a fiber-optical cable, the prices are similar to those in towns. However, there are provinces where Internet connection is ensured through wireless modems only, and the price is much higher there, but we retain the price policy the same.
There are a lot of methods of competition ranging from simple dumping to various twists and turns. What tools do you use to maintain the competitiveness of your products?
As regards competition, I would say that we are dead against dumping. Therefore, our minimum tariff is 6,000 AMD. We compete only by enhancing the quality of the Internet and the service.
Have you got an opportunity to reduce the prices?
The Internet price is not formed by us. It depends on the price at which Internet is imported to Armenia. If it drops, consequently, we’ll reduce the tariffs, too. But now we try retaining the prices at the same level and the return on business ratio is 10-15%.
Aren’t there any Internet failures through your fault? What does the company do to prevent it?
In 2011 a fiber-optical cable was for the first time laid in Etchmiadzin along the railroad. GNC Alfa CJSC considerably contributed to that. In 2012 we launched the second line along the Yerevan-Etchmiadzin highway. As a result, we got a chance to reduce the risks of blackouts. However, it is impossible to have no failure or troubles at all, because we deal with equipment. For these particular cases our agreement has a provision saying that our company compensates for the lack of Internet within 2 and more days in a month by providing free Internet days.