The significant power of Magticom on the fixed internet market was a topic of discussion at the ComCom meeting that reviewed the results of the comprehensive study. According to the research analysis, the company holds a dominant position on the fibre-optic internet market in terms of customer numbers and revenues alike. Along with the representatives of telecom operators, the hearing was attended by stakeholders. The Commission will rule on the results of the comprehensive study on 8 August 2024.

During the hearing, the Communications Commission discussed the results of the fixed internet market analysis conducted with EU experts, according to which Magticom is an operator with significant market power and must be subject to obligation to allow other interested operators to access its network.

According to the Commission and the EU experts involved in the research, Magticom’s significant advantage is highlighted by the following factors:

One of the indicators of Magticom’s significant market power is the fact that out of the 952,000 fibre-optic internet users in Georgia, more than half (53%) are Magticom customers, followed by Silknet’s (32%), Akhali Kselebi (7%) and Skytel (2%), while the total share of other operators is 6%. It is also worth noting that Magticom’s fibre-optic network covers by far the most settlements in Georgia (602), while Silknet is only represented in 71 settlements, Skytel in 212 (Skytel mainly operates in small settlements), and Akhali Kselebi in 14. The research also established that Magticom is the sole supplier of fibre-optic internet in 392 settlements. Skytel is the sole supplier in 104 settlements, while Silknet is the sole supplier only in 2 settlements.

The research established that last year Magticom collected the most revenues for fixed fibre-optic broadband services from natural person customers (GEL 146 million), which exceeded Silknet’s revenues by 76%, Akhali Kselebi’s by 1055%, and Skytel’s by 4092%. In terms of average revenue per user (ARPU), Magticom also holds the leading position (GEL 24.54), followed by Silknet (GEL 23.05), Skytel (GEL 20.13) and Akhali Kselebi (GEL 17.37).

Notably, the comprehensive study also found that in 544 out of the 994 Georgian settlements that are connected to the fixed fibre-optic internet network (accounting for 60% of the country’s population), Magticom’s market share exceeds 40%. In comparison, Silknet’s market share only exceeds 40% in 31 settlements that cover 15% of the total population. According to the experts, Magticom’s dominant position is also highlighted by the fact that unlike its competitors, it has a nationwide fixed network with an 88.6% coverage. The network coverage figures of the other operators are: 57.2% for Silknet, 4.9% for Akhali Kselebi, and 3.5% for Skytel. With regards to combined services (TV, landline and mobile phone services together with the internet), Magticom’s market share is 53.5%, followed by Silknet (38.3%), Akhali Kselebi (8%) and Skytel (0.2%).

In light of the above, the EU experts deemed Magticom to be an operator with significant power on the fixed broadband market and noted that without ex-ante regulation, over the next three years Magticom’s market share is unlikely to drop below the 40% threshold that determines its status as an operator with significant market power under Georgian law.

In 2022, the Communications Commission, together with the experts of the European Union, with the funding of the European Union and within the framework of the assistance for the implementation of the Association Agreement between the European Union and Georgia (“AA Facility II”), started working on the comprehensive research project on the Georgian telecom market. The project serves to enhance competition on the Georgian telecommunications market, bring the regulatory framework of Georgia closer to the European framework in accordance with the obligations under the Association Agreement, as well as provide diverse, high-quality and affordable services for consumers. The comprehensive study was conducted over two years. Research of this magnitude has not been conducted on the Georgian telecom market before. The study conducted by the EU experts was also revised by the experts of TAIEX (EU Technical Assistance and Information Exchange Tool).

Based on the comprehensive study of the mobile services market, the Communications Commission decided on 25 July 2024 to declare Magticom an operator with significant market power, and outlined three different access obligations for them in order to rectify the uncompetitive situation on the market.