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Armenia’s government receives 20% share in mobile operator company

26 January 2024
An MTS Armenia office exterior. Image via Civilnet.

The owner of one of Armenia’s largest mobile operators, MTS Armenia, has announced that it will give the government 20% of its shares at no cost. The decision comes after the government approved the sale of the operator’s shares to Fedilco Group Limited, having previously blocked the move. 

The mobile operator stated that the move was being made in light of the ‘strategic importance’ of the network for Armenia. However, commentators noted that this was the third such transfer of shares from a major company to take place since 2021, and raised warnings regarding the Armenian government’s attitude to companies operating within the country. 

MTS Armenia previously belonged to Aramayo Investments Limited, a company registered in Cyprus but owned by the Russia-based MTS group. The company sold its shares to the Cyprus-registered Fedilco Group Limited on Wednesday, with the sale including MTS Armenia’s subsidiary, the MobiDream payment system. 

The operator’s statement noted that the new shareholder company was owned by Zhe Zhang and Konstantin Sokolov, whom the press release described as ‘professional investors with a diverse background in telecommunications, finance, energy, investment, and asset management’. 

A spokesperson for the Russia-based MTS mobile operator, MTS Armenia’s parent company, told Interfax that the deal was part of the Russia-based group’s ‘transformation strategy’. 

‘If there are favourable offers, MTS will sell non-core assets or assets with limited potential for growth in value, and direct the proceeds to the development of its key ecosystem business in Russia’, they said. 

However, MTS applied to obtain 100% of its Armenian wing from Aramayo Investments in August 2023, but was rejected by Armenia’s Public Service Regulatory Commission (PSRC).


This marks the third instance since 2021 that large companies have transferred shares to the Armenian government for free. In October 2021, Geopromining offered the government 15% of the Zangezur Copper Molybdenum Combine. On 18 January 2024, Armenia’s government accepted a 12.5% share of Lydian Armenia, greenlighting the operation of the contested Amulsar gold mine.

A risk to national security, or a trusted collaborator?

Reports that MTS Armenia’s shares might be sold began to circulate in late 2022. 

In April 2023, Armenia’s Public Service Regulatory Commission (PSRC) rejected an application submitted in January for the transfer of 100% of MTS Armenia's shares owned by Aramayo Investments Limited to Fedilco Group Limited. 

The application was rejected on the grounds that the transaction ‘harms or may harm national security and state interests’, based on an assessment by Armenia’s Ministry of High-tech Industry in collaboration with ‘interested bodies’, likely including Armenia’s National Security Service (NSS). 

However, in November of the same year, the same bodies approved the sale, with the Ministry stating that it had ‘no objections’ and the NSS that it had no comments. 

Following Thursday’s announcement, Armenian commentators raised concerns that the transfer of the share to the government might affect the country’s attractiveness to foreign investors. 

‘At first glance, we, the citizens (the state), become owners of large assets, which is gratifying, but serious reputational risks arise from the point of view of the country's investment attractiveness’, wrote economist Haykaz Fanyan. ‘Any major investor considering the possibility of entering Armenia will undoubtedly take these circumstances into account, and since such transactions are usually accompanied by 0% transparency, the assumptions will become more “hardened” ’.

Fanyan also warned that Armenia might be moving towards ‘state capitalism’. 

‘I remembered how in the 2000s the Russian population was rejoicing that the authorities were taking back from oligarchs the strategic assets privatised for pennies in the 90s, hopefully the parallels will be limited to that’, wrote Fanyan. 

According to Cyprus’ State Register of Companies, Fedilco was registered in April 2022. Hetq reported that two companies also registered in Cyprus, Nofal Holdings Limited and Ortasano Investments Limited, hold 75% and 25% shares in the company, with the ultimate owner of both companies, via Wimthed Limited, being Andreas Ourris. 

All four companies were registered in 2022, with almost no information available about them aside from press relating to MTS Armenia. 

Read in Georgian on On.ge.


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