Sad statistics of Armenia’s internet penetration

According to the latest data on the Armenian Statistical Service website, the population of Armenia is estimated at 3,230,300 people, although the CIA World Factbook states 2,968,586 (July 2008 est.), and the dramatic difference of 261,714 people is huge for a small country like Armenia. At any rate, considering the Armenian Statistical Service to be more up to date, I just came accross this interesting table about internet penitration in Armenia.

YEAR

Users

Population

% Pen.

GDP p.c.*

Usage Source

2000

30,000

3,002,594

0.1 %

US$ 410

ITU

2001

40,000

3,000,164

0.5 %

US$ 500

ITU

2006

161,000

2,950,060

5.5 %

US$ 1,060

ITU

2007

172,800

2,950,060

5.9 %

US$ 1,060

ITU

Naturally, if the population of Armenia is 3,230,300, and not 2,950,060, the percentage of internet penitration would make 5.3 % (not 5.9%). This is a rather sad statistics for a country, which declares IT sector as a priority. For comparison, internet penetration in Azerbaijan is 12.3%, in Georgia – 7.1%, Turkey – 22.5%, Iran – 27.5%. The proud “Silicon Valley” of USSR, that Armenia once boasted to be, is seriously lagging behind, even in the larger world scale, as can be seen from the data by Internet World Stats :World total population = 6,676,12,288, Internet total population = 1,407,724,920. Conclusion – 21.1% of global population is ONLINE!

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25 thoughts on “Sad statistics of Armenia’s internet penetration

  1. In recent days it has been pointed out to me that internet prices have plummeted with the change of ownership of ArmenTel. Beeline now offers unlimited ADSL for 12,000 drams per month which has finally brought the price down to levels found in Georgia for the past few years. It’s also possible to pay even less depending on traffic.

    Over ten years after fter the greatest telecommunications disaster Levon Ter-Petrossian as president and Robert Kocharian as prime minister forced upon Armenia, the situation might be finally normalizing.

    I hope so. It’s about time. Anyway, as I would expect prices for all kinds of Internet connection to be reduced, I would also expect the number of users to now increase significantly. Of course, I doubt it will be a perfect connection, but anyway.

    However, so far people I know who have taken the new Beeline ADSL service are not already getting proper faster access, but have also halved their previous costs for substandard dialup.

  2. However, so far people I know who have taken the new Beeline ADSL service are not already getting proper faster access, but have also halved their previous costs for substandard dialup.

    Correction:

    However, so far people I know who have taken the new Beeline ADSL service are NOT ONLY already getting proper faster access, but have also halved their previous costs for substandard dialup.

    For once, good news when it comes to Internet connection in Armenia. I’ve always been fed up as hell that ADSL cost $30-35 per month in Tbilisi when it cost significantly more here. Now that situation has changed.

    Of course, the big issue now is connection in the regions. ADSL reportedly cost $200 per month in Batumi (in 2006) and Azerbaijan has apparently prioritized Internet access in the regions (will try to find the news item).

    Hopefully Beeline can now address telecommunications and Internet throughout the entire country rather than just in Yerevan.

  3. Well, here’s the bad news re to your good news: http://www.competition.am/index.php?page=news_cases&newsID=557&lng=2

    The State Commission for the Protection of Economic Competition of the Republic of Armenia is studying the complaint of internet services providers’ companies “Web” and “Arminco”.

    The companies “Web” and “Arminco” applied to the Commission stating that in the conditions of internet access service provided by “ArmenTel” contains competition restriction issues. According to the applications, “ArmenTel” provides the Hi-Line Unlimited service of internet access “using the fixed-line telephone infrastructures which are historically belonging to the monopolist, while the other internet providers have no possibility to use”. “Web” company considers that these steps of “ArmenTel” are “aimed to gain monopoly in the sphere of internet access services as well”. At the same time, according to “Web” and “Arminco”, “ArmenTel” company refuses to provide “fixed lines” to other operators (potentially competitive service).

    The applicants expressed a request to the Commission to study the problem and take relevant measures, as well as to consider the issue of recognition of “Armentel” as a dominate company in the sphere of providing relevant services.

    In web-site panorama.am was also published articles on the given issue, which are enclosed to the study materials.
    07/05/2008

  4. Well, it’s not really “bad” news because the good news it that prices have come down, speed has increased. Meanwhile, of course it’s better if other ISPs can offer similar services although I’ve noticed that the ADSL prices from other ISPs seems to be a little higher now so to be honest, I don’t quite understand what’s happening here unless their past use of fixed lines is taken away.

    I don’t know much how ADSL works but one would imagine that alternative hi-speed cable networks should install, operate and maintain their own infrastructure. That’s how it is in the UK with the added advantage that companies can offer additional services to provide real competition to BT.

    Still, as some more forward-thinking people have said in the past, it’s time to start looking at city-wide wi-fi perhaps. Again, I’m encouraged that such connections are also available and it is possible to get them at 16,000 drams for 1 gigabyte bandwidth. However,that was from Netsys or Xter.net or somebody so perhaps they’ll have to reduce the price to match Beeline’s 12,000 unlimited.

    That would be good :-)

    Anyway, I thought the point of your post was number of Internet users and not who wants access to ArmenTel’s infrastructure? Anyway, regardless of how they do it the fact is that the Beeline services will do exactly what you hoped — increase the number of Internet users. For now that’s all I care about.

    :-)

  5. BTW: Public Radio reproduces ArmenTel/Beeline’s response to the action:

    Commenting on Mediamax request on the actions of the providers, Spokeswoman of ArmenTel Anush Begloyan stated that “the pretensions to our company are not quite clear, since many providers independently organize access to international channels of data transfer, organizing incoming traffic through satellite antennas, and only the outgoing – through ArmenTel.”

    Commenting on the statements, according to which ArmenTel does not provide dedicated lines to providers, Anush Begloyan stressed that “we provided and continue providing such an opportunity to providers.”

    “The point is that technically it is not always possible. The opportunity to use the infrastructure is very limited, and ArmenTel”tries in the first place to satisfy the needs of the final users and only then – the commercial customers,” Spokeswoman of ArmenTel stated.

    “In any case, ArmenTel”will keep to the law and we will bring arguments backing our stance only within the framework of the legislation in force,” Anush Begloyan stated.

    So, if the law is adhered to, Internet connectivity reduces in price and the number of users increases, other ADSL and Wi-Fi services have to match pricing levels already in place in Tbilisi, what’s so bad?

    Sure. that the greatest foreign investment mistake has taken so long to resolve (1997 to 2008 — 11 years!), but I hope that it is now. Finally we might have Internet prices on level with other countries in the South Caucasus.

    I’d still like to see more city-wide wi-fi hotspots. ADC apparently offer this service for businesses throughout most of the city although at time of writing it is cost-prohibitive for home users — 30,000 drams for 2 gig bandwidth.

    Of course, Arminco and Web etc investing in laying down cable networks to provide their services would also benefit all and it would be interesting if they were to then venture into areas such as fixed-line telephony or TV-on demand / cable TV services.

  6. Actually – BeeLine and VivaCell both have started investing in 3G – which will bring truly mobile and high speed internet into action. That is when we will really see increase in internet penetration.

  7. Observer- how about every time you come up with such a data you also say a word or two on why the situation is like that ;-) . So why is the number of internet users so low in Armenia? Is it the price, government control, bad quality? Could it be that people just don’t know about it? How many Armenians own a modern computer? How many own a laptop? The price 30-35$ per month seems rather high, that is just a tiny bit lower than what what we pay here in the US.

    Also, what is ADSL. I know what DSL is, but what is ADSL. A=? By the way is there a cable TV in Armenia? I think when cable companies started offering internet, the prices dropped a lot here.

    […] Over ten years after fter the greatest telecommunications disaster Levon Ter-Petrossian as president and Robert Kocharian as prime minister forced upon Armenia, the situation might be finally normalizing. […]

    Could you guys also set the record straight by clarifying what exactly happened back then? My memory is that they sold ArmenTel to an American company at a very low price and Americans sold it to a Greek company at a significantly higher price, and then the Greeks had a very hard time making profit. I think Greeks also were either forced by law to change the archaic soviet time cables or they did it by themselves and that significantly raised the prices. Well, more insight would be highly appreciated.

  8. ADSL is a form of DSL. It’s a way of getting high speed internet through the regular phone lines. The technical details are perhaps not important.

    As for the price, here is a more accurate comparison to the US prices.
    The unlimited ADSL for 12000 AMD/month is at 256kbps which is 3 times slower than the $20/month DSL plan AT&T gives (in certain areas the same plan is as low as $10/month), 6 times slower than the $25/month plan, 24 times slower than Comcast’s $40/month plan.
    Beeline’s 1024kbps plan goes for 30000 AMD/month, and is still slower than almost all the US plans I mentioned above.

    In my understanding the biggest problem with ArmenTel was its monopoly, guaranteed by their contract. The sale of the company at a very low price was a lost to the country, but it was only a one time loss, and wasn’t responsible for the continued terrible quality of service.
    I believe the monopoly is to be blamed for most of the problems. The effect is perhaps most vivid in the mobile business. As soon as VivaCell entered the market, prices went down drastically, and to this day keep going down. The biggest drop was seen in the price of SIM cards. Whereas before, the official price was 14000AMD, and it required registering and waiting in line for a year or more, and the price in the black market exceeded $200, in some cases almost $300, after, the price went down to 200AMD (you can buy a 1000AMD SIM card, and it will come with 800AMD worth of calling time), and they are available everywhere.

  9. sam63,

    thanks.

    […] 24 times slower than Comcast’s $40/month plan. […]

    This is some news. So you think it is the price that is accountable for the low number of internet users? From what you said it could easily be that the quality is just terrible.

    I find it hard to believe that 94% of Armenians of Armenia cannot pay 30-35$ per month for the internet. I mean is the life really that bad in Armenia? I bet that so called “elite” already constitutes 5.9% of the population. What is the average monthly or annual salary in Armenia?

    Observer- do you have a data indicating the number of the families that have internet?
    Is there also a data for cell phone users? It would be nice to have some kind of comparison with something else.

    Also, is there a data indicating the most visited sites? It would be nice to know what the 5.9% of the population likes to do in the internet. For instance, what percent of the population uses the internet for educational purposes, for news, and etc.

  10. now that internet is going to be more and more affordable, i for one welcome this better-late-than-never development with open arms. not to change the subject, grigor, but 30-35$ a month is cigarette money. ;)

  11. the internet in Armenia is non-existent, that’s clear.

    I have a question regarding the number of population – does the number given here it coincide with the numbers which were given with regard to presidential elections?

  12. Grigor,

    It’s both the price and quality. Or more like price/quality. Very high speed internet (i.e. what’s standard here in the US) is also available, but at astronomical prices. And by astronomical I do mean astronomical.

    If I remember correctly, the average monthly salary is about 70,000AMD for the public and 85,000AMD for the private sectors (those with more accurate data, please correct me, if I am wrong). This salary definitely doesn’t leave any room for internet expenses.

    I believe the price is not the only reason for the low penetration of the internet. Most of the people have absolutely no motive to connect. What’s the primary use of the internet in the US? I have never looked up any statistics, but my guess is it’s mostly e-mailing, social networking, shopping, looking up information – what’s the address of a certain store, or the phone number of some company, directions to a place, etc (the only statistics I know, is that more than 90% of the online traffic is actually used for file sharing). Most of these services either don’t exist in Armenia, or are just starting to come to existence, and the public definitely hasn’t adapted to using the internet for these purposes. Even file sharing is not a possibility with the speed of internet available there.

    There definitely are improvements. E.g. HSBC will (soon) start offering online banking services to its customers. Social networking seems to be getting somewhat popular: lot’s of people I know are starting to appear on the russian site Odnoklassniki.ru.

    As for cell phone usage, already past summer, and perhaps earlier, VivaCell was claiming more than 1 million subscribers, and ArmenTel about half that number. These numbers could be close to reality. Almost everyone I know back there has a cell phone. The only person I can think of, that for sure doesn’t have one, is one of my cousins who’s in 6th grade. And these are regular, working class people: I don’t know any people in the elite.

  13. Grigor,

    Average monthly salary in Armenia is 75-80,000 AMD according to the same old Armenian Statistical Service. Even with the most affordable dial-up connection, getting online for more then 4 hours per day would usually cost 8-10,000 AMD, which is around 10% of average monthly salary here.

  14. Grigor – there are now around 1,600,000 mobile subscribers in Armenia – 50% of population is mobile!

  15. Thanks guys for clarifying the situations.

    I would suppose that if Armenian TV is as bad as some claimed in this blog then internet would be a very good alternative source for news, and therefore, I would suppose that many would want to to get connected. But I guess my suppositions aren’t correct.

    Observer- what a difference huh, 50% of the population is mobile while only 6% is online. I wounder why 50% of that small country needs to be mobile. When I lived there and I had to talk with someone I usually walked to the place. Anyway. Is this because the ordinary phone lines are more expansive?

    So I guess the conclusion is, as AH pointed out, that people don’t have internet because they smoke. I suppose though that this is the male population. At any rate, the situation isn’t as depressing as it seemed at the beginning. If as sem63 pointed out, there isn’t much happening online in their lives then why bother especially because they can spend that money on cigarettes.

  16. […]I have never looked up any statistics, but my guess is it’s mostly e-mailing, social networking, shopping, looking up information – what’s the address of a certain store, or the phone number of some company, directions to a place, etc (the only statistics I know, is that more than 90% of the online traffic is actually used for file sharing). […]

    For me internet has always been a way to boycott TV + stuff that I do for my work. So I guess I was assuming that it must be that a lot of Americans do that. I was also under this impression because here in Berkeley the local newspapers have started various survival programs and there has been even a talk that journalism as a profession might soon disappear. Now I don’t know if this will happen, but their point was that blogs are too powerful and offer much more personal news then the newspapers. Also, online news is so widely spread that living in the East one can read western online newspaper with no extra cost. But looking at sites like NYT, I doubt that their fears were real. Perhaps paper versions of the same newspapers will soon disappear which will cause decline in the demand of professional journalists. By the way guys have you seen this new amazon thing called Kindler. I guess books are disappearing as well.

  17. I ran the data. According to the CRRC DI:

    smoking (# of cigarettes smoked per week) is correlated with Internet skill: .000 (not statisically significant), (i.e. there is no relationship)
    smoking (# of cigarettes smoked per week) is correlated with Internet connection ownership: -.08, but not statistically significant (i.e. there is no relationship)

    So, there is no relationship between smoking and Internet in Armenia.

    Obviously.

    If you’re curious there ARE a lot of things that are significantly related to Internet. But Observer can tell you that later.

  18. My point was not that there is a correlation. just a point about what people are willing to spend money on or not. A pack a day is about the cost of a monthly internet connection.

    So…give up smoking and get online!!

  19. Me too. Sadly, many spend a substantial amount of their money on…cigarettes.

  20. Pingback: Armenia & the South Caucasus | The Caucasian Knot » Blog Archive » Good News for the Internet in Armenia

  21. I suspect internet use will now follow the same progression as cell phone use. Applications in Armenia will increase as the penetration increases.

    By the way 50% cell phone penetration is still lower than in some small countries where it has reached higher than 100%. In any event there is a convergence happening between wireless, hi-speed, etc.

    And AH is right – there is far too much money spent on cigarettes in Armenia.

  22. People can spend their money as they please – but then they shouldn’t complain about not having money for other things nor should they expect society to pay when they inevitably require medical care.

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