Growing Demand for Internet Services on Armenia’s IT Market
ARKA - What are the results of your company's activity for the last year, including the numerous campaigns of free connection to the broadband Internet?
Grytten - ADC experienced solid growth during 2008, in particular for datacom services - i.e. corporate networking for internal communications needs. ADC has established a particularly strong position within large retail organizations, financial industry and IT. Campaigns have resulted in a growing subscriber base, and strengthened ADC’s position in the market.
ARKA - What are the plans of the company for Y09, particularly, plans for the decrease of tariffs, provision of new services, and enlargement of the activity out of the republic?
Grytten - ADC will expand its network in 2009 to go outside Yerevan, primarily to the north. Network services will be launched in several new cities and towns, and will include tailored solutions for both companies and residential users.
ADC continuously revises its tariff policy and makes adjustments as appropriate to be in line with the competitive landscape. Focus is most of all on new services in new markets, such as residential services and expanded geographical coverage.
ARKA - Doesn't your company plan to build its own optic-fiber net?
Grytten - ADC has a large fiber-optic network in and around Yerevan today. As part of geographical expansion towards the north, this network will be extended.
ARKA - How do you estimate the level of access to the optic-fiber network in Armenia and the perspectives of enlargement of that line?
Grytten - ADC only uses fiber-optic technology in its backbone infrastructure. Hence, the geographical expansions described under 2,3 and 4 above will be done by use of fibre -optic cabling.
ARKA - According to your opinion, how do you like the competitive field among internet providers? What is the specific of your company in this context?
Grytten - ADC is in the forefront of network development for Internet and other communications services. The competition is strong, and this is good for all parties involved, including ADC. Currently there is a trend towards more consolidation for Internet services, and the larger companies likely take an increasing total market share at the expense of smaller network providers, this is a predictable trend seen in many other markets when the larger entities are investing quite heavily in network expansions and new services.
ARKA - What are the main problems and obstacles in this market and what are the possibilities to overcome these problems and obstacles?
Grytten - The main challenge to any telecommunication provider is the long-term commitment one has to make. Given huge investments it takes years to become profitable and for the market to grow sufficiently to ease the cash constraint the investments create. Market growth rate therefore remains the most interesting parameter to balance investment and development of new services against future profitability.
ARKA - How negative can be the consequences of the world crisis for the Internet providers in Armenia and, particularly, for ADC?
Grytten - Difficult to say right now. ADC has not experienced any noticeable change at this stage, but we have heard on the news about IT companies that are closing. In general reduced spending power is the biggest threat to continued growth and expansion. ADC will carefully monitor the situation, but we are at the same time committed to the major expansion plans for 2009 by reaching new cities and towns, as well as launching residential Internet services.