Orange Armenia (OA) CEO Francis Gilbert has told the press in Armenia that while his company is negotiating with internet and cable TV provider Ucom regarding the latter’s purchase of 100% of OA stock, OA will continue to operate under its own name for at least another twelve months.
So why has Orange Armenia, a subsidiary of the Orange Group (formerly France Telecom), suddenly decided to sell its shares?
Analysts point to the following two reasons. When Orange Armenia entered the market in 2009 there were already two well entrenched players – ArmenTel (Beeline) and VivaCell MTS (K-Telecom). While OA tried to increase its subscriber base through a variety of marketing schemes, it never seriously threatened its two main rivals.
As of March 31, 2015, VivaCell had 2.116 million subscribers, Beeline had 790,327, and Orange Armenia had 497,733.
OA was also operating at a loss. The other two were profitable.
Despite OA’s shaky financial situation, the company made it to the list of Armenia’s top 1,000 taxpayers.
According to the most recent published figures, during the first quarter of this year OA paid 861.9 million AMD (US$1.8 million) in tax, making it the 30th largest taxpayer in Armenia.
According to the Ministry of Finance’s data base, OA paid the greatest amount in quarterly tax in the 1st quarter of 2010 – 1.659 billion ($3.452 million).
Over the past five years ArmenTel and K-Telecom have consistently ranked in the top five taxpayers in Armenia.
In 2013, K-Telecom paid 30.1 billion AMD in tax and 28.891 billion last year.
In 2013, ArmenTel paid 15.475 billion AMD in 2013 and 16.490 billion last year.