Armenia’s telecoms regulator, the Public Services Regulatory Commission (PSRC), yesterday approved, without conditions, the proposed takeover of domestic mobile operator Orange Armenia by local internet service provider (ISP) UCOM.
As previously reported by CommsUpdate, on 22 July French behemoth Orange Group entered into talks to sell 100% of its Armenian mobile unit to UCOM, confirming that the decision to offload the unit formed part of its Essentials2020 plan, which will see it divesting non-viable businesses and focusing instead on providing its core user base with high-quality mobile and converged (fixed) services. According to audited financial statements, in FY2014 Orange Armenia sustained losses totalling AMD4 billion (USD8.4 million), on top of losses of AMD3.85 billion in FY2013. Following the talks, Orange Group announced earlier this month the signing of an agreement with UCOM to sell the underperforming unit. No financial details of the deal have been disclosed, although it is known that Orange has spent upwards of USD350 million in the venture – including its mobile licence.
Gevorg Gevorgyan, chief of the PSRC’s division in charge of communications, said that the decision to approve the takeover is ‘beneficial to the company’s employees and clients’. UCOM was established in 2009 and has built up a fibre-to-the-home (FTTH) network with more than 75,000 residential customers. The union with Orange Armenia will create a new converged player which is able to offer a range of fixed and mobile services. The cellco launched on 5 November 2009 and today provides a range of 3G/3.5G voice and data services over a network which covers more than 97% of the Armenian population. It had 639,000 customers at the end of June 2015 and employs approximately 500 people. Upon completion of the deal, Orange Armenia will continue providing mobile telecommunication services, preserving its licence and infrastructure.