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Russia’s Rostelecom Preparing to Buy Armenia’s GNC-Alfa and Ucom

Russian telecommunications provider Rostelecom intends to acquire 75% minus 1 share of Armenian telecommunications operator GNC-Alfa, and possibly also internet service provider Ucom, which will provide the Russian company with 13% of the Armenian market of broadband internet access.

“Traffic from the Persian Gulf to Europe is moving in a very promising direction. Part of the route goes through Armenia and the purchase of the local backbone operator will strengthen Rostelecom’s position,” said a source close to the telecommunications provider.

The broadband market volume in Armenia in 2011 is estimated at nearly $40 million. GNC-Alfa’s share in the market is about 2%.

According to the source, that Rostelecom might also purchase major ISP Ucom (which ensures 11% of Armenia’s broadband market, has 19,500 subscribers and its revenue in 2011 was forecast at $5.3 million) in the future is not ruled out.

GNC-Alfa owns a 1.5km-long fiber-optic network passing along the Armenia-Iran gas pipeline and is considered the largest independent player in the local market. In 2011, according to preliminary data, its revenue was $12 million.