Orange is leaving Armenia

The sale of Orange Armenia telecommunication operator as a separate legal entity to Ucom will officially be announced on July 22. The French company's representatives will officially announce it at tomorrow's press conference.   

 

According to ArmInfo, Ucom, which indirectly belongs to Finance Minister Gagik Khachatryan, one of the biggest oligarchs of Armenia, will temporarily gain ownership of the Orange Armenia brand.   

 

To recall, founded in 2007, Ucom has dominant positions on the Armenian market of IP television. About a year ago, the company was granted a license for providing mobile communication services (011 code registered).  

 

Independent market observers think that the French company's withdrawal from Armenia will deliver a strong blow to the country's investment position, because by the specialists' data Orange Armenia 

was not in favorable competitive conditions and its profitability left much to be desired.     

 

According to the Ranking of Retail and Service Outlets of Armenia by the Agency of Rating Marketing Information (ArmInfo), at the yearend of 2013 the loss of Orange Armenia totaled 3.8 billion AMD, and the accumulated loss - 12.4 billion AMD. At the yearend of 2013, the ROI and ROE of Orange Armenia amounted to negative 8% and negative 10%, respectively. As regards Ucom, its net profit at the yearend of 2013 amounted to 884.2 million AMD (almost 7-fold year- over-year growth (from the negative level). At the same time, Ucom's ROI and ROE made up 3.4% and 5.4%, respectively. Orange Armenia has been operating on the Armenian market since 5 November 2005, and Ucom was founded in 2007.