Yerevan /Mediamax/. The interview of iCON Communications CEO Adam Kablanian to Mediamax News Agency## and Banks.am portal

The presentation of iCON Communications, a new internet-provider, which will start providing high-speed wireless broadband Internet access by WiMAX technologies from the beginning of 2009, took place in Yerevan on October 20. Starting January, 2009, the company will begin providing its services in the center of Yerevan and in April - in the whole territory of the capital city. In 2009-2010 the services will be available all over Armenia. iCON Communications is setting up WiMAX infrastructure jointly with Alcatel-Lucent and Siemens Companies. The investment capital of the Company makes about $10mln.

- iCON Communications is a purely Armenian Company, and not the subsidiary enterprise of a foreign company. Due to what did you manage to attract investments at the volume of $10mln and start cooperation with international companies, such as Alcatel-Lucent and Siemens? Is the information on the Company share-holders available?

- We secured such amount of investment due to having a clear vision, a solid business plan, an experienced team and a clear strategy of how we are going to provide fast, reliable and affordable internet in Armenia.

We tended to find an investor, who understands this business, and our major investor owns similar operations in a number of countries. We will be announcing the name of this company shortly.

- You noted that iCON Communications will not be the most inexpensive provider in Armenia, but it will provide for complete equivalence of price and quality. Does this mean that connecting to your wireless WiMAX network may cost more than ADSL of similar quality?

- As we are totally focused on delivering fast, reliable and affordable internet, the price to value equation is at the heart of our operating philosophy. We have developed a range of service plans that we feel will meet the needs of all of our target market segments.

You have asked the question in a very correct way: “will our service cost more than ADSL of similar quality” - in fact, I can assure you that if we offer service similar to the quality of ADSL in Armenia today, ours will be cheaper, because we don’t feel that there is a balanced price to value equation in the country today.

Today the advertising of ADSL offers you 256 kbps speed. I have such a connection at home, and I’m lucky if I really get at least 50 kbps.

On the other hand, since we will be delivering fast and reliable, world class service internet, and those qualities don’t exist (in large part) in Armenia today, our tariffs might be more expensive because our quality will be superior to current offerings.

- Cornet-AM Company loudly made itself known October 21. It launched WiMAX network in Yerevan and 18 Armenian towns. The Company claims to occupy the position of the “national operator of Armenia”. What will your advantage be in competing with Cornet-AM?

- We view as our competitor not only Cornet-AM, but all the internet-providers of Armenia from Dial-up to WiMAX.

We believe we will have significant advantage in terms of the number of base stations we will be deploying. With WiMAX you can put 2 base stations and cover all of Yerevan, but with large numbers of users the connection speed will be very slow, and will become slower as the number of subscribers increases.

So when you deploy base stations you have 2 things: first you have to provide signal coverage, second – you need to provide capacity. We are building enough capacity for the next three years now. It is in our plans that the more and more internet users will be connected to our network, we will add capacity. So, we’re building capacity ahead of demand. That way, people can again get fast and reliable internet. We are confident that we will have the most robust network in Yerevan, and then in the rest of the country.

We also intend to gain the leadership by world-class customer service. Another advantage is our seasoned management team all with significant international executive management experience.

- Cornet-AM plans to use its network to provide complex services. What are your plans? What may your customer hope to be offered aside from broadband internet? Do you plan providing specialized services to corporate customers?

- As mentioned in our press conference last week, we plan to offer Virtual Private Network (VPN) and VoIP services to our customers. In addition, we are preparing other value-added services that we will announce as part of our commercial launch. In short, we plan to become our corporate customers’ preferred partner for all mission-critical internet-based services.

- Do you plan developing fixed connection services or providing your customers other types of convergent services?

- We have already announced that our services will include Voice over IP (VoIP). We are constantly reviewing market needs and technological developments to identify other high-value services that we can offer to our consumer and corporate customers.

We will announce the acquisition of our own number capacity in the next 2-3 months.

Removing the need for a fixed connection is really one of the biggest advantages in deploying WiMAX, because there are lots of areas without fixed lines in Yerevan and outside it.

WiMAX has advantage that we can connect people in hours, avoiding bureaucratic process, which can last months.

- During the presentation of iCON you spoke a little about bad quality of internet connection in Armenia. Please, tell the reasons of such condition.

- There are several reasons. One is that the level of internet use in Armenia is lower than in the rest of the world, so, the majority of providers are local companies without the proper amount of investment. First they try to generate income and only then add capacity or bring new technologies.

The second reason was the monopolistic situation with Armentel at the time, which prohibited healthy competition to emerge. Regulatory body undoubtedly has played a significant role and I’m happy to see here a positive trend, which favors more rapid and better development of the whole communication market.

- What is your assessment of Armenia’s telecommunications market in general? Can we consider it free given that all providers enter international lines through Fibernet and ArmenTel?

- I don’t think that Armenian telecommunication market is completely free, as there is still some kind of monopolistic behavior. Internet costs in Armenia are 5-10 times higher than global averages, a comparison that holds even when compared to other countries in the region, such as Georgia. One of the main factors behind this significant price differential is the price that international line providers charge to ISPs such as us for access to the International gateway.

There are only few exceptions, as in the case of Fibernet, because they’re not competing with us. When you have both network operator and internet service provider in the same organization, as in case of ArmenTel, which is both a network operator and an ISP provider, there is some kind of monopolistic behavior. We are very encouraged by the commitment and actions of the regulator’s office, which puts a lot of pressure on Armentel to make it more competitive.

I am confident, that over time, we will succeed in bringing the price to value equation to be consistent with global norms. Besides, I know that soon Armenia will have a third network operator, who will come and extend their line to the south and to the north. I know there are people, who are making such investment.

- According to you, what can the government of Armenia do to assist the development of broadband internet in the country?

- I think the biggest thing that the government has already done is the establishment of the regulatory body, which opened the market for competition. The focus should now shift to making internet access and internet-based education, medicine, government services and private enterprise a top objective for growth of the country.

We are ready to work with our ISP partners, NGOs, international organizations to help the government of Armenia achieve these objectives.

Special attention should be paid to the education system, bringing computers and computer literacy to the schools. Any program that government can do for the education system will really help and ensure the strategic importance of Armenia to the rest of the world.