Foreign companies mostly control the telecommunications sector in Armenia: international holding companies, companies founded by other governments, and companies registered in various offshore zones.
Russian companies dominate this sector, as they do other economic sectors in Armenia.
Armenian government officials, both current and former, and their relatives own shares in the telecommunication sector. These shares are hidden within a web of offshore companies.
Companies providing internet service in Armenia also supply telephone service, both cellular and landline.
According to 2013 statistics, 46.3 percent of Armenia’s population uses the internet; 40 percent of households own a computer; and 35.6 percent of these are connected to the internet. It’s likely 2014 will show even higher usage but the statistics have yet to be published.
The following companies provide internet connection (cable) access to Armenia: ArmenTel CJSC; K-Telecom CJSC; UCOM Ltd.; GNC-Alpha Ltd.; and Armenian Datacom Company CJSC.
According to statistics provided by Armenia’s Public Services Regulatory Commission, 71 companies provide internet service inside Armenia. As of Dec. 31, 2014, the following companies were the largest in terms of traffic and subscribers: ArmenTel CJSC; Ucom Ltd.; GNC-Alpha Ltd.; K-Telecom CJSC; Orange Armenia Ltd; Web Ltd.; Aranea Ltd.; Interactive TV Ltd.; Arpinet Ltd.; and Mylan Ltd.
Data culled from the latest published reports of these companies regarding fundamental technical and economic criteria shows that ArmenTel leads the way when it comes to people using the internet by means other than their mobile phone network. The breakdown, in terms of percentage, is as follows.
ArmenTel and K-Telecom were in the top five taxpayers’ list for the past five years. Starting in 2010, Ucom soared from 664th place to 55th. The other internet service providers (ISPs) also appear in the top 1,000 list of taxpayers but not at the top.
The internet was introduced to Armenia in the early 1990s. The first web service, www.arminco.com, was established in 1993.
Dial-up internet service in Armenia was then developed by ArmenTel, which allowed customers to connect over land-line phone connections. In the mid-2000s, other operators appeared in the market and the scope of network accessibility increased.
Andranik Aleksanyan, one of the founders of Arminco, a former deputy minister of transport and communications in Armenia and currently executive director of Armenia’s Commerce and Manufacturing Chamber, says internet developed slowly in Armenia but not because of technology.
The problem, he says, were the connections and the monopoly enjoyed by ArmenTel.
“If we consider that the internet is 30 years old, it developed better in the first five years when there were no hindrances and it was a labor of love. What followed were the meddling and government-private sector monopolies that hindered development. During that period, we lagged behind certain countries. The connection problems no longer exist. Our problem today is content,” says Aleksanyan.
He believes the internet in Armenia is high-quality and relatively inexpensive. Prices listed by operators indicate that 24-hour quality internet costs 5,000-8,000 AMD (US$ 10-18) per month at speeds of 4/2 megabit per second or higher.
Aleksanyan believes that content must now be developed, especially domestically and in Armenian, and that internet in Armenia is higher-quality than that of some developed European countries.
Edik Baghdasaryan and Kristine Aghalaryan