Armenian regulator qualifies Ucom’s claims as “unfounded”

The Public Services Regulatory Commission of Armenia (PSRC) issued a statement on January 9, which reads:

“The Public Services Regulatory Commission of Armenia (hereinafter the Commission) qualifies as unfounded the claims by Ucom about unequal competitive conditions for the tender for usage of 811-821 MHz and 852-862 MHz radiofrequencies.

11:42 | 08.01.19 |

Ucom announces unequal competitive conditions

Firstly, the public disclosure of the matter is surprising, given that the Commission’s decision was agreed upon with all concerned state agencies and parties after a long, comprehensive discussion and was published on www.e-draft.am and www.psrc.am. A more surprising fact is that the company attended the session where the Commission discussed the mentioned decision and presented no objections.

Secondly, the company compared this tender to the one that the Commission announced for usage of 800 MHz radiofrequencies in 2013, which is unacceptable for the following reasons:

• The starting price of AMD 6.225 billion of the Commission’s tender and the commitments it entailed were defined by an Armenian government decision on 6 June 2013 on the basis of the Commission’s offer and aimed at the transition from analogue to digital broadcasting: Armenia’s obligation to the EU and installation of LTE Advanced mobile connection. As a result, these conditions attracted only Ucom, which was just entering the market of broadband mobile internet. Ucom was announced the winner.

• During the 2013 tender, when LTE Advanced technology was not yet installed in the telecommunications market, the winning company of the tender was allowed to choose 80% of Armenian settlements which would be covered by broadband internet connection according to the results of the tender.

• Any tender held by the Commission naturally implies securing receipt of funds to the state budget of Armenia in the form of concrete payment for the resource. However, the mentioned condition was never an end in itself and was always aimed at solving the issues relevant for the sector in the given period of time. This principle also underpins the latest global regulations, which, for instance, require more flexible and stimulating policy from regulators regarding the introduction of 5G mobile technologies that need investment several times the current.

Based on the provided information and taking into account 121 problematic settlements without LTE Advanced connection (disadvantageous in terms of business, inexpediency of investment, underpopulation, difficult location and access to infrastructure) and analogous tenders held in the markets similar to Armenia (Georgia, Moldova), the starting price of the 2018 tender was set at AMD 1.5bn.

At the same time, one of the commitments of the winning company of the 2013 tender was to provide the mentioned 121 settlements with LTE Advanced technology. Fulfillment of this obligation will require investment of AMD 5.3-6.1bn, according to the estimation by Ucom.

We leave the conclusions to the public judgment and note with regret that although Ucom had the mentioned information and participated in the decision making, the company tried to make the Commission’s decision a subject of speculations through a misinformation campaign.”