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Reduction of prices for Internet-communication should be clearly
motivated and not differentiated
Arminfo
2008-05-05 15:47:00
Since October 1, 2007, ArmenTel Company has been officially deprived of
the monopoly for Internet-communication networks in Armenia. However,
it did not affect the alignment in the branch, as the Company preserved
the telephone network ownership, therefore, an opportunity of rendering
DSL-communication. Naturally, it made the Internet-providers operating
in the country dependent, as ArmenTel, which preserved the monopoly in
fact, did not loose the freedom of optional management of prices for
traffic being realized by providers. On April 18, ArmenTel, appearing
now under the Beeline trademark, announced of the reduction of prices
for Internet-traffic ` from 400,000 drams to 30 per 1 megabit. However
it does not concern the providers, which will be supplied Internet at
the previous price. At ArmInfo's request, Director General of one of
the Armenian leading providers, `Arminco' Company, Grigory Sagyan
commented on the situation.
- Mr. Sagyan, how do you treat reduction of prices for
Internet-communication?
- A cut in prices for Internet is a positive phenomenon. I think that a
budget Internet promotes the population integration into the world
information network and, thus, contributes to increasing of the general
educational and cultural level. However, any fall in prices should be
clearly motivated and not differentiated. The present price fall per
Megabit/sec from 1.2 mln drams to 30 thsd drams bypassed the providers,
that may make it possible to draw some conclusions regarding the plans
of the Internet-communication market management in the country.
Noteworthy, ArmenTel does not render services at 30,000 drams to
another operators but forces them to buy the service at 1.2 mln drams.
The matter here concerns not falling in prices but the tariff policy,
as a result of fulfillment of which the competitive operators
(providers) of ArmenTel are fully withdrawn from the market.
- How did the situation originate under which one company was permitted
to control the price mechanisms in the telecommunications market of the
whole country?
- The point is that ArmenTel has got a confidence that if it is not a
monopolist, it is enabled to conduct an autonomous price policy.
However, a term `dominating position in the market' is used today
instead of the term «monopoly», as ArmenTel owns a network of
communication, which is led to every apartment ` it is about 250,000
telephone lines in Yerevan. This dominating position envisages
regulation of the cost of services being rendered by network. The
regulation today is carried out by two organizations, al least ` Public
Services Regulatory Commission and Economic Competition Protection
Commission.
- Thus, the monopoly, either legal or factual, does not contribute to
development of the telecommunications branch, does it?
- This is testified by the examples of the past. ArmenTel preserved the
monopoly for cellular communication till 2005, and the users had to pay
$200 for telephone cards in the black market to get communication, the
quality of which entirely depended on the operator's will. Elimination
of the monopoly and appearance of a competitive company increased both
the quantity and the quality of mobile communication. Let everyone
decide how much the parallels with the present situation may be drawn
here. Perhaps, it will succeed to withdraw all the competitors from the
market within several months due to the price differentiation,.
However, just after that we shall face an absolute «lawlessness», as it
was before the market demonopolization.
- Will the appeal to the relevant governmental bodies on market
regulation be of help under these conditions?
- Under the developed conditions, this is the only possible solution.
Thus, we are going to apply to RA Public Services Regulatory Commission
the next few days, to consider the created 00situation and make an
adequate decision for the healthy market atmosphere.
Thank you for the interview
motivated and not differentiated
Arminfo
2008-05-05 15:47:00
Since October 1, 2007, ArmenTel Company has been officially deprived of
the monopoly for Internet-communication networks in Armenia. However,
it did not affect the alignment in the branch, as the Company preserved
the telephone network ownership, therefore, an opportunity of rendering
DSL-communication. Naturally, it made the Internet-providers operating
in the country dependent, as ArmenTel, which preserved the monopoly in
fact, did not loose the freedom of optional management of prices for
traffic being realized by providers. On April 18, ArmenTel, appearing
now under the Beeline trademark, announced of the reduction of prices
for Internet-traffic ` from 400,000 drams to 30 per 1 megabit. However
it does not concern the providers, which will be supplied Internet at
the previous price. At ArmInfo's request, Director General of one of
the Armenian leading providers, `Arminco' Company, Grigory Sagyan
commented on the situation.
- Mr. Sagyan, how do you treat reduction of prices for
Internet-communication?
- A cut in prices for Internet is a positive phenomenon. I think that a
budget Internet promotes the population integration into the world
information network and, thus, contributes to increasing of the general
educational and cultural level. However, any fall in prices should be
clearly motivated and not differentiated. The present price fall per
Megabit/sec from 1.2 mln drams to 30 thsd drams bypassed the providers,
that may make it possible to draw some conclusions regarding the plans
of the Internet-communication market management in the country.
Noteworthy, ArmenTel does not render services at 30,000 drams to
another operators but forces them to buy the service at 1.2 mln drams.
The matter here concerns not falling in prices but the tariff policy,
as a result of fulfillment of which the competitive operators
(providers) of ArmenTel are fully withdrawn from the market.
- How did the situation originate under which one company was permitted
to control the price mechanisms in the telecommunications market of the
whole country?
- The point is that ArmenTel has got a confidence that if it is not a
monopolist, it is enabled to conduct an autonomous price policy.
However, a term `dominating position in the market' is used today
instead of the term «monopoly», as ArmenTel owns a network of
communication, which is led to every apartment ` it is about 250,000
telephone lines in Yerevan. This dominating position envisages
regulation of the cost of services being rendered by network. The
regulation today is carried out by two organizations, al least ` Public
Services Regulatory Commission and Economic Competition Protection
Commission.
- Thus, the monopoly, either legal or factual, does not contribute to
development of the telecommunications branch, does it?
- This is testified by the examples of the past. ArmenTel preserved the
monopoly for cellular communication till 2005, and the users had to pay
$200 for telephone cards in the black market to get communication, the
quality of which entirely depended on the operator's will. Elimination
of the monopoly and appearance of a competitive company increased both
the quantity and the quality of mobile communication. Let everyone
decide how much the parallels with the present situation may be drawn
here. Perhaps, it will succeed to withdraw all the competitors from the
market within several months due to the price differentiation,.
However, just after that we shall face an absolute «lawlessness», as it
was before the market demonopolization.
- Will the appeal to the relevant governmental bodies on market
regulation be of help under these conditions?
- Under the developed conditions, this is the only possible solution.
Thus, we are going to apply to RA Public Services Regulatory Commission
the next few days, to consider the created 00situation and make an
adequate decision for the healthy market atmosphere.
Thank you for the interview