A world-famous subsidiary of France Telecom will be chosen to become Armenia’s third phone mobile phone operator after submitting the highest bid for a relevant government license, officials said on Monday.
The French telecom giant’s wireless division Orange was one of the three foreign companies short-listed in late August in an international tender for the right to launch and operate another mobile phone network in the country. A government commission administering the tender disclosed their bids in the presence of journalists.
It turned out that Orange is ready to pay 51.5 million euros ($72 million) for the license, well above the government’s minimum asking price of 10 million euros. The two other bidders, Tele2 AB of Sweden and the British-Irish group CEO Blackrock Communications, offered 45.6 million and 31.7 million euros respectively.
“We state that the highest bid was submitted by the France Telecom/Orange company,” said Andranik Manukian, the commission’s chairman. “According to our procedures set by the government, the commission will decide the winner within three days.”
Transport and Communications Minister Gurgen Sargsian made clear that the outcome of the bidding is a forgone conclusion. “The only document on the basis of which that decision can be made is the one-page bid that specifies the price offered by a bidder for the license,” he told reporters. “So the price is the only criterion [for choosing the winner,] and you’ve just heard it.”
Sargsian said Orange will formally receive the license in early December and could launch its network as early as next summer. “One can presume that they could start providing services within six months,” he said.
Orange is Europe’s second largest mobile phone company, boasting tens of millions of cellphone subscribers in France, Britain, Belgium, Portugal, Germany, Italy, and Eastern Europe. Its desire to expand into Armenia came as a surprise given the small size of the local market for telecommunication services.
The Armenian government decided last year to further liberalize the sector despite a dramatic increase in mobile phone use in the country that followed the abolition in late 2004 of the ArmenTel national telecom company’s monopoly on the wireless service. The government says the launch of a third network will make the service even more accessible and affordable for Armenians.