Interview of the General Director of “ArmenTel” Company Oleg Bliznyuk to Mediamax Agency and Banks.am portal

- “ArmenTel” Company ceased being a monopolist in the telecommunications market of Armenia on October 1. What does this mean for the Company and for the market as a whole? I remember you said that “universal happiness will not start on October 1”.

- Firstly, the decision on liberalization of the market only was made on October 1 of 2007. The procedure itself is still subject to discussion: corresponding political and economic levers have to be elaborated yet.

As to my vision, the liberalization of the market does not mean that if someone wants to provide services, he goes and receives a license and starts providing those services at home or in the basement. In practice, the very notion of “service” consists of many components, starting from the quality and up to, for example, international commitments in the sphere of internet and the international connection.

I am not at all against appearance of new providers, I am simply against low-quality services. See, if people do not buy from us a channel with the corresponding transmission line capacity, the final quality of their services, naturally, will suffer, but the completely unjustified references, according to which “ArmenTel” is the one to be blamed, will continue appearing.

Another question appears as well: how are those companies going to pay the taxes? Will the situation, which was in the past, remain, or will everything become official? Various kinds of abuse are possible here.

So, indeed, “great happiness”, of course, will not take place. I believe that in the course of time, only a few companies will remain in the market, which will really carry out transparent work and will provide quality services.

I believe that it will become possible talking about real liberalization of the market only in a few years. The regulator, to give its due, has done volume work, but I still have the impression that we are running ahead of the locomotive.

What concerns “ArmenTel”, we, of course, know how we will act. We will surely defend our economic interests, at that obeying the Armenian laws.

Liberalization will not have negative influence on our customers. Renouncement of monopoly did not cause our Company major consequences. Yes, we can lose a part of our international and inter-town traffic, but we are ready for that and we are ready to compete. The most important is that the competition is fair and honest.

- Can we assume that the purchase of 80% of “VivaCell” shares by MTS will make your competition more predictable and civilized, since “VimpelCom” and MTS have been for a long time competing in Russia?

- I do not think that MTS will make any notable changes in the work of “VivaCell” before the spring of 2008. MTS is a high-tech and advanced company, and they will undoubtedly try to implement the culture of high technologies in Armenia.

We know what to expect from MTS, we are competing in many markets, and this competition is of civilized nature. We realize that there will be no abrupt changes in Armenia, capable of collapsing the market or harm any of the companies.

- More than a year has passed from the moment of acquisition of “ArmenTel” by “VimpelCom” Company. What achievements have been made in the course of this year, and what, on the contrary, you did not manage to do?

- First of all, we realized then that much time and many efforts would be needed to understand what was going on in the company, since a certain part of information at the moment of purchase was unavailable for us. In the course of a year, we had to pay much attention to the organizational issues. Let’s say, we planned to prepare a basis this year for advancing in future – to settle the things with billing, the fixed connection, construction of new basic stations.

A very important fact is to settle the matters with the people, who work here, to solve the issue of social guarantees of the employees. Professional examination of employees has never been realized here. Of course, it took us much time to understand everything and to establish order.

It took certain amount of time for the implementation of special procedures in “ArmenTel”, which existed in “VimpelCom” and which correspond to the international accounting standards. Of course, it is difficult working with old procedures and simultaneously implementing the new ones. The shift of the billing system was accompanied with technical costs, which are inevitable in such cases, since we implemented a completely new version, which is not used even in Russia yet.

Having analyzed the existing equipment of the mobile connection, we realized that we could not work with it. Despite the fact that the equipment was relatively new, it did not support many new functions, necessary, in particular, for the implementation of 3G. As a result, there was a decision made on changing the whole equipment, and this, of course, took us much time.

I consider this year a successful one for the Company, since we put an important start for the future, carried out huge amount of rough work, which is not visible beyond the borders of the Company.

- Will the technical modernization that you mentioned lead to the extension of the coverage zone of “ArmenTel” mobile network?

- By the end of 2007 376 basic stations will function in the “ArmenTel”’s network. As a result, even today we have almost reached parity with the competitor, concerning the coverage part. When we purchased the company, the coverage made 65% of the populated territory of Armenia. Today the mobile network of “ArmenTel” covers over 90% of the populated territory of the country. We continue installing basic equipment and weendtend to conclude the work, planned for this year, by mid-December.

- So, you consider that the correlation, which exists today in the mobile connection market of Armenia – 65% of “VivaCell” subscribers and 35% of “ArmenTel”– will still change?

- Of course, the picture will change and we work for that. We are not going to accept the situation, when “VivaCell” became the leader of the market in the course of two years. We use the potential, the knowledge and the financial opportunities of “VimpelCom” Group to change the situation.

You know, it is possible to build a wonderful network, but if no one knows about it, the old stereotypes will function. Unfortunately, those stereotypes still exist, although “ArmenTel” is the national property of Armenia irrespective of who the owner of the Company is. We stand face to face with our subscribers and we worry very much, when we are informed that someone was rude with the customer in the service office. We have even launched a “helpline” for the people to inform us timely on violation of their rights. I assure that if you call this number and say the name of the employee of “ArmenTel”, who was rude and unjust to you, and the results of the check prove that, we will say good-bye to such an employee.

We have set for ourselves the task to become the best service company in Armenia. We have all the necessary components for that - the experience of “VimpelCom”, technical opportunities, good people, who want to work and who think about the Company.

- Lately, the leaders of Armenian companies, irrespective of their sphere of work, in increasing frequency raise the problem of lack of qualified personnel. Does “ArmenTel” come across this problem? If we talk about the high and middle level managers, is it better to train them within the company or invite from abroad?

- The problem of invited specialists is not that acute for purchased companies. I believe that the invited managers are necessary for the first 2-3 years to implement certain business-processes and implant corporate culture. But for the most part, the personnel should be the local one – Armenians should work in an Armenian company.

There is the problem of shift of generations. We have a project called “HR Reserve” in “VimpelCom”, the essence of which is that each top-manager brings up people to a certain degree, since those people, sooner or later, will come to substitute him. We will implement this scheme in “ArmenTel” as well.

- In summer of 2007, you put into commercial exploitation the service of broadband internet with the use of ADSL technology. How demanded it proved itself and can we assume that in the course of time “ArmenTel” will develop this type of services under an independent brand?

- There is a specail group established in the Company, which works to develop this direction. It is yet quite cumbersome for the subscriber to connect to this service and we strive to facilitate the process as much as possible. I believe that in the beginning of 2008, serious changes will take place, which will concern both the prices and the types of the services provided.

- Returning to the issue of stereotypes, certain part of the society has negative emotions for the very name of “ArmenTel”, which is conditioned by the “Greek past” of the Company. On the other hand, you repeatedly stated that you do not consider the change of the brand justified before securing high quality of services. How can this dilemma be solved?

- My personal attitude towards “ArmenTel” brand is very positive. It is another question that very serious mistakes were made in the past. I believe that we will not renounce the “ArmenTel” brand concerning the fixed connection.

What concerns the court examination with the Armenian “Bi Line” Company, I think that soon this contingency will be solved and we will have an opportunity to present mobile connection services under our brand in Armenia. But my strict stance is that we should fundamentally improve the service, the quality of services and the attitude towards the subscribers before that. We do not want to position the existing negative attitude to the new brand.