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ComCom: Access Obligations Have Been Imposed on Magticom in Order to Improve Competition on the Telecom Market
According to the 2024 Activity Report of the Communications Commission, last year ComCom concluded the holistic study of the fixed and mobile services markets together with EU experts. The results showed that the retail market of fixed and mobile services is stagnant and uncompetitive, while the relevant wholesale markets require regulatory intervention. The research also identified Magticom as an operator with significant market power on the fixed and mobile network access markets, leading to the imposition of corresponding obligations on the operator.
More specifically, the experts found that Magticom enjoys considerable advantage on the market, as it is far ahead of its competitors both in terms of financial resources, infrastructure, and subscriber numbers.
The market shares of mobile network operators have remained unchanged for the past 5 years. During the same period, the total number of subscribers increased by only 10% in both 2022 and 2023, while revenues increased by 45% and 58% respectively. For the past 5 years, Magticom has consistently maintained its position as the market leader. As of 2023, Magticom accounted for 41% of the mobile market subscribers and 49% of the revenues. According to the data for 2022, Magticom also generated 50% of the total mobile data traffic in Georgia, compared to 30% for Silknet and 20% for Cellfie Mobile. The distribution of traffic by company remained almost unchanged in the following years: in 2023, 48% of the traffic was generated by Magticom, 33% by Silknet, and 19% by Cellfie Mobile; in 2024, 47% of the traffic was generated by Magticom, 34% by Silknet, and 18% by Cellfie Mobile.
Taking into account these and other important parameters, it was determined that without the implementation of regulatory mechanisms, the uncompetitive and restrictive environment on the market could not be rectified. Given that ComCom's goal was to remove market barriers, attract new players, improve competition and create more favourable conditions for consumers, the Commission took into account the recommendation of the EU experts regarding access obligations.
The report states that ComCom imposed national roaming, co-location and MVNO access obligations on Magticom on the mobile services market, based on which, the operator must allow companies access to its network and infrastructure at cost-oriented tariffs.
As for the fixed markets, here the Commission imposed additional obligations of tariff regulation, transparency, non-discrimination and cost breakdown on the operator with significant market power. The access obligation will allow other operators to use Magticom’s network infrastructure, establish themselves on the market, create alternative offers, and provide diverse choices for the consumers. The other obligations will ensure that Magticom offers fair tariffs, acts in a non-discriminatory manner, and does not force its competitors out of the market through price changes.
The 2024 Activity Report also highlights that the Communications Commission, in collaboration with EU experts, started working on the holistic study of the Georgian telecom market in 2022 and completed it in 2024. The EU-funded project was implemented within the framework of the Facility for the Implementation of the Association Agreement between the European Union and Georgia (AA Facility II). Research of this scale had not been carried out on the Georgian telecom market before. The research conducted by the EU experts was revised by the experts from TAIEX (EU Technical Assistance and Information Exchange Tool).
Stakeholder engagement was ensured at all stages of research, both in form of public consultations held during the official proceedings, and the preliminary research results shared before the commencement of the proceedings.
