IT Landscape in Armenia
Internet Service Providers:
At present there are at least four major Internet Service Providers (ISPs) operating in Armenia. The largest of these is Arminco, a joint venture with MCI (USA) with an estimated 3,000 current subscribers (business and residential). Armenian Computer Center (ACC) is the second provider that has focused on business and government customers and is experiencing rapid growth. Yerevan Institute of Physics is the third major ISP.
The following provides the basic information on the two largest ISPs:
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Arminco-Global Telecommunications
Arminco is perhaps the largest ISP in Armenia. The company provides a full-spectrum of Internet-related services to include E-mail, Web Hosting and Hosting of customer-specific servers. It has Points of Presence in several locations throughout Armenia at Yerevan, Qyumry, Vanadzdan, Echmiadzin, Stepanakezt, and Sisian. Efforts are underway to also put a POP in Armavin and Gavar. The company has 35 employees.
Arminco has art present 3,000 subscribers, with 1,500 new subscribers added in the past year. Annual revenue this last year is placed at US$ 600,000. Internet pricing for access in US$ 50/month for unlimited use any time of the day, and US$ 20/month for unlimited use between 8 p.m. and 8 a.m.
Arminco acquires its bulk Internet access through ArmenTel, and at present has the equivalent to a T-1 total capacity (1.544 Mbps). Arminco’s total capacity is acquired through a dual-route approach where their outroute is via leased line through ArmenTel, and their inroute is via a receive-only Very Small Aperature Terminal (VSAT). With this dual-route approach their monthly international access costs are running US$ 30,000. For comparison, if the entire T-1 capacity were acquired via ArmenTel the total monthly connectivity costs would be on the order of US$ 45,000/month. It should be noted that a full T-1 link to the Internet in the U.S. this would be less than US$ 2,000/month).
Clearly Arminco is being successful and experiencing growth, however the current charges it must pay ArmenTel for Internet access are simply excessive and the result of monopoly pricing (e.g., monopoly profit maximization behavior). Growth in the Internet use within Armenia would likely expand even faster with cost-based pricing. In addition, there is some risk to even sustaining the current growth levels as ArmenTel appears to be considering implementing local call metering. The result of such an action would be to increase Internet access even more than the present levels, thus lowering use.
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Armenian Computer
Center
Armenian Computer Center is
considered by many to be the second largest with a special focus on providing
access to the various Ministries within the Government of Armenia and
businesses. For the most part these
customers are connected via leased from ArmenTel. Once this capacity is in place, then Armenian Computer Center
provides the Internet connectivity anywhere from 19.2 Kbps (US$ 720/month) to
256 Kbps (US$ 9,600/month)
In addition, Armenian Computer
Center will be offering a ‘181’ access number throughout all of Armenian for
accessing the Internet without paying any long-distance charges.
This is a feature promised by ArmenTel, but as yet not available.
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Other ISPs
Estimated on the number of ISPs
operating in Armenia vary from 3-5 to as many as 30. The general consensus is that there are less than 10 that
have any significant customer base.