PSRC to watch the market of internet services to prevent possible dumping from the part of big players

Yerevan /Mediamax/. Member of Public Service Regulatory Committee (PSRC) of Armenia Samvel Arabajyan stated that one should make a clear distinction between the markets of wholesale and retail internet.

Samvel Arabajyan said this in an interview to Mediamax, commenting on expectations on soon reduction of retail tariffs.

PSRC member reminded that there are three players in wholesale market of internet connection in Armenia: “ArmenTel” (Beeline trademark), FiberNet Communications and GNC Alfa, at that the first two of them are declared dominating in the market, and the third appeared in the market relatively recently.

“In the view of limitedness of our market, the regulator had to react to the situation with prices in the market of wholesale internet, and at the end of 2009 it made a decision on reducing tariffs for wholesale internet for approximately 9 times”, Samvel Arabajyan stated.

At the same time, according to him, in economic terms, it is wrong to assess the entire business of internet providers basing on one component only.

“It is inexpedient to expect immediate reaction to reduction of prices for international IP traffic from providers, since the share of IP traffic makes only 15-20% in formation of price for retail internet”, PSRC representative noted.

Samvel Arabajyan reminded that companies provide subscribers with free modems, and it became possible to subsidize their cost due to the difference of price for wholesale internet.

“By this, companies direct their investments to developing of infrastructure, securing affordability of internet services for the population of the country and broadening their own subscriber base”, PSRC member stated.

Samvel Arabajyan noted that the Committee will watch the market of internet services to prevent possible dumping policy from the part of big players, which may lead to cessation of investments by medium companies.

He also stressed that the Committee carries out constant monitoring of the market and controls the situation and “criticism addressed to the Committee from the part of doubtful expects, who do not differentiate between internet types and company brands, is unfair”.

Speaking about the tendencies for internet services market development in Armenia, Samvel Arabajyan stated that they expect twofold increase of international traffic consumption in 2010, which will lead to reduction of the prime cost for internet traffic on the borders of Armenia.