Most users access the Internet from home and work. Internet cafe ´s, which grew rapidly in the 2000–2005 period, currently attract fewer users. During the last two years,
the number of Wi-Fi hot spots has significantly increased, covering Yerevan’s center
and some residential areas. There is little Internet penetration outside Yerevan, mainly
because of poor infrastructure, low income, and low levels of computer literacy. The
most popular languages among Internet users are Russian, English, and Armenian. In
2005, 40 percent of Web sites visited from within Armenia were located in Russia, 30
percent were in Europe and the United States, 25 percent were local resources, and 5
percent were hosted in other countries. 7
The high cost of Internet access for some years slowed down the entry of foreign
providers into the market. 8 Over the last couple of years, the number of ISPs providing
Wi-Fi and broadband connections has been increasing, resulting in price cuts. Despite
the increased affordability, Internet access is still expensive in comparison to most
European countries. Monthly unlimited dial-up access service costs AMD 7,500 (USD
24.50) 9 in Yerevan and about USD 30 in rural areas. The cost of dial-up of Beeline,
however, is the same for rural and urban areas. If the user prefers megabyte services,
connection speeds are not dedicated and can vary from 64 Kbps to 1 Mbps, depending
on the area and time of day. 10
Regulatory enforcement against dominant market players has been problematic.
However, in July 2008, Armenia’s antitrust regulator imposed a fine on Beeline for
anticompetitive behavior. 11 In the wake of the regulator’s decision, the market has
enjoyed greater competitiveness, and Internet services have expanded.
Armenia was one of the first of the former Soviet countries to privatize its telecommunications industry. 12 In August 2007, the Russian VimpelCom 13 acquired a
majority shareholding in ArmenTel, the incumbent telecommunications operator,
and subsequently bought out the rest. In February 2008, VimpelCom registered the
operator’s license, allowing ArmenTel to use the Beeline brand on the territory of
Armenia. 14 Until 2007 the incumbent operator enjoyed a monopoly over international
connections and other services. Consequently, the liberalization of international Internet access introduced only in 2007 radically altered the Internet access market. The
cost of international connections significantly decreased, but it is still higher than in
European and some CIS markets. 15 The incumbent operator owns the main telecommunications infrastructure including the Trans-Armenian Optical System (the national
fiber-optic backbone), satellite antennas, the entire fixed telephone infrastructure
(PSTN), and most of the country’s cellular infrastructure, which covers about 85 percent of Armenia.
The telecommunications regulation authority renewed ArmenTel’s license, stripping
it of its monopoly in some telecommunications services. However, ArmenTel has
maintained its de facto monopoly of the fixed-line market. This situation may change,
as two ISPs (Arminco and Cornet) announced they would start offering fixed-line
Armenia
139
the number of Wi-Fi hot spots has significantly increased, covering Yerevan’s center
and some residential areas. There is little Internet penetration outside Yerevan, mainly
because of poor infrastructure, low income, and low levels of computer literacy. The
most popular languages among Internet users are Russian, English, and Armenian. In
2005, 40 percent of Web sites visited from within Armenia were located in Russia, 30
percent were in Europe and the United States, 25 percent were local resources, and 5
percent were hosted in other countries. 7
The high cost of Internet access for some years slowed down the entry of foreign
providers into the market. 8 Over the last couple of years, the number of ISPs providing
Wi-Fi and broadband connections has been increasing, resulting in price cuts. Despite
the increased affordability, Internet access is still expensive in comparison to most
European countries. Monthly unlimited dial-up access service costs AMD 7,500 (USD
24.50) 9 in Yerevan and about USD 30 in rural areas. The cost of dial-up of Beeline,
however, is the same for rural and urban areas. If the user prefers megabyte services,
connection speeds are not dedicated and can vary from 64 Kbps to 1 Mbps, depending
on the area and time of day. 10
Regulatory enforcement against dominant market players has been problematic.
However, in July 2008, Armenia’s antitrust regulator imposed a fine on Beeline for
anticompetitive behavior. 11 In the wake of the regulator’s decision, the market has
enjoyed greater competitiveness, and Internet services have expanded.
Armenia was one of the first of the former Soviet countries to privatize its telecommunications industry. 12 In August 2007, the Russian VimpelCom 13 acquired a
majority shareholding in ArmenTel, the incumbent telecommunications operator,
and subsequently bought out the rest. In February 2008, VimpelCom registered the
operator’s license, allowing ArmenTel to use the Beeline brand on the territory of
Armenia. 14 Until 2007 the incumbent operator enjoyed a monopoly over international
connections and other services. Consequently, the liberalization of international Internet access introduced only in 2007 radically altered the Internet access market. The
cost of international connections significantly decreased, but it is still higher than in
European and some CIS markets. 15 The incumbent operator owns the main telecommunications infrastructure including the Trans-Armenian Optical System (the national
fiber-optic backbone), satellite antennas, the entire fixed telephone infrastructure
(PSTN), and most of the country’s cellular infrastructure, which covers about 85 percent of Armenia.
The telecommunications regulation authority renewed ArmenTel’s license, stripping
it of its monopoly in some telecommunications services. However, ArmenTel has
maintained its de facto monopoly of the fixed-line market. This situation may change,
as two ISPs (Arminco and Cornet) announced they would start offering fixed-line
Armenia
139