Interview of Acting Director of Telcell payment system Aram Azatyan to Mediamax and Banks.am portal##

- Telcell payment system was the first in Armenia to implement a network of self-service terminals on payment reception. What was the main business-motivation for entering the undeveloped market?

- The motivation and the main goal of each business is gaining profit. The experience of “terminal” business development in the territory of CIS states showed that it is promising, and this became a push for the entry to the Armenian market.

At the initial stage, people felt cautious about the terminals, they did not pay large sums, however, as a result of our team’s hard work, today we can argue that the Armenian consumer has gladly accepted and mastered the new way of payment for services.

- Soon your company will mark its first jubilee - the 1st anniversary since the start of work. Would you, please, present the dynamics of Telcell system development in the course of this year - the growth of terminal numbers, expansion of the geographic presence, the dynamics of payment turnover growth, expansion of its assortment?

- Indeed, exactly a year ago, the first work transaction was realized addressed to VivaCell operator. Already by the end of 2007, 197 payment terminals in Yerevan and Gyumri were successfully functioning in our system.

The turnover of the payment system in the IV quarter of 2007 exceeded 300mln drams. In 2008, we concentrated our efforts on the increase of the number of payment receiving points and the expansion of the service assortment, which could be paid for. By the beginning of the third quarter of 2008, the number of payment receiving points exceeded 300, and our terminals appeared in Sevan, Artashat, Vanadzor and Etchmiadzin.

Today, the users of our system have the opportunity to pay for services of over 18 operators and providers, as well as make payments for public services.

- What is the strategy of the company’s regional expansion? How are your terminals “perceived” in the regions, far from the capital?

- In the course of this year, the privileges of paying for services through payment terminals of our company were appreciated not only by the residents of Yerevan, but also other towns of Armenia. We plan to continue expanding our presence in the regions and the minimum-program for our company is the presence in all regional centers of the country without exception.

- What types of services cover the most part of the payments today?

- Most part of the payments falls on the share of payments for services of mobile operators, and this is quite natural. Today the level of mobile connection penetration in Armenia is quite high, and according to the assessments of certain specialists, already makes about 80%.

- Head of “Norvik” Credit Organization stated in his interview to our agency that their customers from now on can repay their credits with the use of Telcell system. According to you, how prospective is the direction of cooperation with banking and credit organizations?

- On June 25, an agreement was signed between our company and “Norvik” UCO CJSC, within the framework of which the customers of the given organization gained the opportunity to repay their credits with the use of the payment terminals of our company.

Today credit organizations function in conditions of serious competition, people have become more hard-to-please and besides attractive financial services, they require modern and convenient service. And here they have two ways. They can either expand the branch network and the number of the personnel, or they can connect to our system with its ramified terminal network. The leadership of “Norvik” chose the second path, and I am sure that other participants of the market will also do that. We consider cooperation with banks and credit organizations as one of the most promising directions and we hope to see their interest for our “products”.

- What is your assessment of the signals from the payment market players: does the partnership mood prevail or the more competitive one? What niche does the company intend to occupy in this market?

- It is natural that certain participants of the market have seen us as a competitor, but nevertheless, many have seen us as a partner. We will continue building partnership relations with all participants of the market, and these are not just words. And already in a few days, we will present our offer for cooperation to the main players. The specialists of our company have elaborated and implemented a system of payment reception through cash units of banks departments and branches. The organization of payment reception with the use of Telcell payment system will give the banks an opportunity to significantly expand the spectrum of provided services, which will allow not only increasing the loyalty of the customers concerning the bank, but also expand the customer base.

- It is difficult for the uninformed to understand how the reception of the payment and the practically instant replenishment of this or that account of the payer are realized. Would you, please, briefly and without complex technical terms describe the given process?

- Let us try to describe the process by the example of mobile connection operators. After the customer enters his/her telephone number at the terminal, and puts in the necessary sum, the system includes the sum in the entered data and sends the information to the server of our company. The processing center of Telcell processes in real time mode the given information and connects to the payment gateways of the operators. The billing center of the operator includes the paid amount in the account of the payer. The user receives an SMS-notification that his/her account is already replenished by the mentioned sum. The whole operation takes a few minutes.

- In the course of the past year competitors appeared for you. Are there corrections in the strategy of your company expected in this connection?

- The strategy of our company is the preservation of a leading position in the market of payment reception by means of providing more quality and convenient service for the users of terminals. The competition in the market will only contribute to the improvement of the quality of provided services, from which, our payers will benefit in the first place.

- The government and the regulating body, that is the Central Bank, take up consequent steps on limiting the circulation of cash, aiming at struggling against shadow economy. Can this fact have serious influence on your business?

- No. The reduction of cash circulation is quite a complex and long process. Moreover, we already now consider a few projects on organizing non-cash payment reception.

- What are the goals that Telcell plans to achieve by the end of the year?

- We plan to triple the monthly turnover, increase the number of terminals up till 500 and connect 7 new operators to the system.

Seizing the opportunity, I want to thank all the users of the payment terminals and inform that, in connection with the first anniversary of successful work in the market, Telcell Company has prepared a nice surprise, about which everyone will learn in September.