Armenian News Network/Groong: 𝐓𝐞𝐥𝐞𝐜𝐨𝐦𝐦𝐮𝐧𝐢𝐜𝐚𝐭𝐢𝐨𝐧𝐬 𝐒𝐞𝐜𝐮𝐫𝐢𝐭𝐲 𝐢𝐧 𝐀𝐫𝐦𝐞𝐧𝐢𝐚 - 𝐒𝐞𝐩 𝟏𝟓, 𝟐𝟎𝟐𝟎)
Conversations on Groong
Background and formulation of the telecoms market in Armenia
Telecommunications market in Armenia started with the monopoly of the incumbent operator ArmenTel owned jointly by Greek state owned company OTE (90%) and Armenian government (10%). The sale-purchase agreement granted ArmenTel (recently rebranded to VEON) exclusive rights to provide basic telecommunications services including international Internet connectivity, mobile and fixed telephony. ArmenTel’s monopoly remained till 2005 when after a series of negotiations the monopoly on mobile communication was abolished and the second operator entered the market.
In 2007 OTE sold its shares to Vimpelcom, a Russian private company operated under Beeline trademark. Shortly after that Armenian government agreed to sell Vimplecom remained 10% of state owned shares in exchange of liberalization of all telecommunication markets. 2008 can be named as a beginning of Armenian liberal telecommunications market.
Today, Armenia has three major mobile service providers: two (VEON-Armenia and MTS-Armenia) owned by Russian businesses and one (Ucom) owned by a mixed capital of Armenian and Russian rich families. There are also three leading wireline operators: also two Russina (VEON-Armenia and GNC Alpha also known as Rostelecom) and Ucom.
One of the most recent development on Armenian telecom market has been Ucom’s intention to purchase VEON that failed due to criminal charged have been brought against one of its owners, Gurgen Khachatryan, the son of former head of state revenue service authority Gagik Khachatryan, who has been arrested and charged of misuse of state budget and money laundering. The story did not stop on this, but it is out of the today main discussion topic today.
Azerbaijan’s stake in Georgia’s Caucasus Online
Over the past few months, we’ve seen a public tussle between Georgian regulatory firms and a Azeri company called NEQSOL which acquired 49% of Caucasus Online, a Georgian telecommunications company. How does this deal affect Armenian national security given that a significant portion of Armenian internet traffic goes through Georgia (including Caucasus Online)?
National Security Issues related to telecommunications
External nation-state threats:
In general the fact of purchasing or controlling shares by the Azerbaijani company does not result in substantial threats for Armenia in terms of information security. The company would remain Georgian, be under the control of Georgian government and unless major shareholders would take a risk of illegal spying on Armenian data traffic it would affect the security of international communication of Armenian citizens and government. However, it doesn’t mean that situation will remain to be comfortable for Armenia: risks of interception of both voice and data traffic will be increased unless Armenian authorities take appropriate security measures. But, the news is a good trigger to think how Armenia may secure its connectivity with the world and what should be done to improve resilience of the country’s communications system.
What can be done to beef up quality of Armenia’s external communications access?
One of the solutions might be Armenian companies investments in trans-Georgian fiber-optic cable. Georgia has relatively (compared with other countries of the region) liberal telecommunications legislation including enforceable infrastructure sharing regulation. The first step Armenian government must do is to encourage investments in building such a cable system that both Armenian operators and Georgian businesses may benefit from.
Guest: 𝐃𝐚𝐯𝐢𝐝 𝐒𝐚𝐧𝐝𝐮𝐤𝐡𝐜𝐡𝐲𝐚𝐧 / Դավիթ Սանդուխչյան
Website: https://groong.org/podcasts/CoG-Telco-20200915.html Episode 15