Telecom Armenia: New Strategy, New Network and New Horizons

ArmInfo. The only good news for our public at the end of last year was perhaps the announcement by brothers Alexander and Hayk Yesayan about the appearance of a national telecom operator on the market.

This became possible after the Yesayans, as founders of the new 'Team' telecommunications company, acquired 100% of the shares of VEON Armenia, after which the latter was renamed Telecom Armenia. Giving a big press conference on the occasion of the completion of the transaction, the Yesayan brothers stressed the importance of establishment of an exclusively Armenian telecom operator, as this particularly will allow leaving profits and dividends within the country and directing them to the development and implementation of new ambitious projects.

The next important announcement from the brothers was the news of the start of these projects - the construction of the most advanced fiber-optic network in the region - Next Generation Network. “Today we are leaping into the next century with a new fiber optic network that will be one of the best in the world. This is a completely new quality of services, and the capabilities of this network seem to have no limits,” stated the owners of Telecom Armenia.

ArmInfo correspondent spoke with Hayk Yesayan, General Director of Telecom Armenia, to find out the current opportunities being discussed and the priorities of the national telecom operator.

  Telecom Armenia entered the year 2021 with a remarkable statement on the start of construction of the most advanced fiber-optic network -Next Generation Network (NGN). I would like you to explain to the public in details what advantages does this network have and what problems can it solve in our domestic telecom?

To begin with, telecommunication services and equipment are constantly being improved, so they always need to be re-equipped. And all the companies working in the field of telecom make large investments for this purpose annually. Why NGN? Well, because this is really a new generation network, with new logic, which allows very fast retrofitting based on a fiber-optic communication channel. Each subscriber will receive the so-called dark fiber from his/her apartment to the company's data center. Whereas, today, almost all large networks have branched fiber-optic channels, in particular, GPON (Gigabit Passive Optical Network). The NGN makes it possible to carry out rapid transformations and re-equipping active equipment even in the future. For example, if the old disk telephones first worked with the copper network, then they were replaced by push-button and radio telephones, now it is already video communication and 4K content. NGN is just beginning with this, and there is much more yet to come ... it's hard to predict, we are unable to look so far ahead.

From a qualitative point of view, this is undoubtedly an increase in the quality of services, their availability, including during accidents. And at the same time, this is a complete replacement of the copper network with fiber optic, which will reduce latency and increase speed. Thus, having dark fiber, we will be able to reach almost unlimited speed. At the same time, we see that in the upcoming 25-30 years, this network will not need to be re-equipped, it may require certain changes in the equipment line, which will be done very quickly.

That is, if the copper network has served for about 100 years, we are building a network, the service life of which will be even longer.

How long will it take to cover Yerevan with a new network? In February, you announced the start of construction work in the administrative district of Davitashen.

Probably, we will complete the work in Yerevan in 2 years, if not earlier. We plan to gradually move to other cities. But I am sure that Yerevan will become one of the first capitals in the world to be fully covered by this new generation network.

In which countries do TC companies already work with the NGN network? Why have you decided that Armenia needs a network with this particular technology?

To be honest, it is difficult to track which TC companies and in what geographical limits are building such networks, but recently Google announced pilot projects for the implementation of this network in several cities. That is, there is no such example for dark fibers to fully cover entire cities. Because the launch of this technology is a rather laborious process that requires large financial resources. But we are taking this step because we are confident that the development of telecom is one of the foundations of the economic development of our country. The speed of development of other businesses and processes also depends on telecommunications. I am sure that the new network will stimulate the entire industry, that is, new technologies, new IT companies, new jobs, etc. will appear on the market.

 What new services do you mean?

For example, there are banking sector subscribers in the corporate segment who, for security reasons, want ATMs to be completely connected by dark fibers, thereby eliminating the need to connect active equipment. After all, the more the latter, the more opportunities for hacker attacks. The number of nodes is proportional to the growth of problems. Therefore, this network, including appropriate for state facilities of strategic importance, as it significantly increases the level of security. When these opportunities become known to the wider public, especially corporate clients, it will significantly improve the position of our country.

Recently, information security issues in our country have become more than relevant

These issues are always relevant. There is no system in the world that cannot be hacked. The only question here is time. To what extent the information received at that time will be relevant. And in the new network, we reduce the number of nodes and its vulnerability, allowing us to more safely solve emerging problems.

In one of your interviews, you mentioned that the NGN will be able to satisfy the needs of not only Telecom Armenia, but also other communication operators in Armenia. What exactly did you mean?

We have always worked with each other. But the capabilities of this network are so great that all telecom operators will have the opportunity to reach a new level of work. In particular, we plan to have corporate packages for this segment so that our partners can calculate and consider the benefits of our offer. Let me remind you that the construction of such network requires very large financial resources, which, moreover, must be increased annually. If I am not mistaken, in our country there are about 170-180 small companies, which have Internet services providing license. The fact is that large networks are not being built in small settlements that would cover the entire territory, and today this is a big strategic problem that should be addressed.

What amounts are we talking about? What investments did the implementation of this network require?

I would not like to talk about the cost of the project at this stage. But on average, operators in Armenia invest $ 50 million in the network within three years.

Let's talk about the company's new strategy, how do you see the development of Telecom Armenia in the short and long term? What else can we expect this year?

I can’t name the exact timeframe, but we will rebrand and work under the TEAM brand. And our strategy is this, first of all, we want to build a large infrastructure network that will allow us to provide numerous services of various types, from payment and settlement to the Internet and TV, through which we intend to reach qualitatively new levels. In addition, today we receive a lot of services from abroad. That is, foreign engineers work instead of ours.

Why?

Let's avoid considering this fact either positively or negatively. This was the company's strategy, as it was an international group. Now we are working on changes, which is good from an economic point of view, since due to the increase in the volume of work at the local level, new jobs are being created. And we, by the way, are the only telecommunications company in Armenia, where the growth in the number of employees is registered, about 15%, and in our case it is 200-250 work places. I am sure that all this will give its positive results within 1-2 years.

And what about the development of the startup ecosystem, which Beeline previously did within the Beeline Startup Incubator? Does the new strategy envisage it?

You know, time will tell how startups will develop. But the foundation that we create, yes, is the environment where startup ideas can be realized.  First of all, it is necessary to have an appropriate environment, in which startups can grow. Why is it so difficult for startups to develop in our country? The same idea may develop in Silicon Valley and fail here. This is solely due to the lack of an appropriate environment. As a telecommunications company, we see it as a network. But time will tell. We are now focused on this idea, and we think we have chosen the right direction.

And what about transit services? What are the prospects in this direction?

Beeline has provided transit services before. Today we have major partners in the region, and over the past 4-5 months the volume of transit Internet services and the volume of personal Internet use have increased several times. That is, we are seriously growing in this direction. In the future, we plan to develop business data centers as well. There are companies not engaged in ITC, and from a financial point of view, it is unprofitable for them to build their own data centers to meet their own needs. But if there is a large data center that gives you everything you need, you can buy services there, easier and faster, it’s ideal for the startups. Thus, we want to build a network and data centers, within which cloud services will develop. Because the environment I was talking about is exactly this chain - network-data-center-clouds.

And in conclusion, I cannot but ask you in general about the telecommunications field in Armenia. How do you assess the market situation? What trends are relevant today?

Telecom is a well-developed sector in Armenia. From 4G coverage to fiber-optic network, we are quite ahead. In addition, our specificity lies in the fact that we are a small country and we can change something faster. Whereas, for example, Russia, Germany, due to their size and market volumes, cannot afford such things. At the same time, the market size remains the main problem for us, because with a population of about 3 million people, we have a problem with paying capacity. The average service basket is quite small. Prepaid mobile subscribers pay only 1.5-2 thousand drams a month to telecom operators, the average cost of home Internet services is 4-5 thousand drams. It is difficult with such a basket volume and population amount.

There is a lot of talk today about 5G. What do you think about this?

All three telecom operators in Armenia can work with 4G without any problems. If someone tells me why we need 5G, I will be happy to build this network (smiles – ed. note). Why should we pay for what we don't need? The advantages of the 5G network are used in large industrial enterprises, today we do not need this. This is a pointless waste of money, which, among other things, will affect the increase in operating costs. In my opinion, 4G fully meets the market requirements, there are no problems with the speed either. But if there is a need for 5G, I think all three operators are ready.

Thank you for the interview.