Contact
Tbilisi 0144,
50/18 Ketevan Tsamebuli Ave/ Bochorma Str., 0144, Tbilisi
Tel/Fax: +995 32 2921667
E-mail: post@comcom.ge
Phone number
+995 32 2921667
ComCom Begins Studying the Case of Magticom Potentially Abusing its Dominant Position
The Communications Commission has begun studying and investigating the case of Magticom potentially abusing its dominant position by increasing internet prices.
The issue concerns Magticom's decision to increase the price of mobile internet packages from 1 June, and the price of fixed internet from 1 August.
More specifically, Magticom raised the price of the one-week unlimited mobile internet package by 11% (from GEL 9 to GEL 10), and the price of the one-month unlimited mobile internet package by 9% (from GEL 32 to GEL 35). According to the latest data available to the Communications Commission, the one-week unlimited mobile internet package is activated 499,000 times per month, while the one-month unlimited package is activated 144,000 times per month. Thus, if the company maintains this number of activations of the packages in question, it will increase its monthly revenue by a total of GEL 931,000.
In the case of fixed internet, Magticom decided to increase the service tariff for subscribers using 50 Mbps fixed internet or the Internet + IPTV service by GEL 3 GEL from 1 August. According to the Commission’s estimates, the changes have affected approximately 456,000 subscribers, which will increase Magticom's monthly revenue by GEL 1.37 million if it retains those subscribers. The change has resulted in an 8% increase in the price of separate internet packages in Tbilisi and a 10% increase in the regions, while the price of combined offers increased by 4% to 9%.
The increase in prices for mobile and fixed internet packages has led to a growth in the number of consumers contacting the Communications Commission. In order to protect the interests of consumers, the Commission has made an initial assessment, which raises reasonable suspicion of a possible violation of Article 6 (abuse of dominant position) of the Law of Georgia on Competition.
Specifically, according to the legislation, a company’s dominant position is determined by taking into account its market share, as well as the market shares of its competitors, barriers to entry, barriers to expansion of production, buyer market power, accessibility, network effects, and other factors determining market power. Abuse of a dominant position includes, among other things, setting unfair prices or unfair trading conditions, restricting production, markets or technological development to the detriment of the interests of consumers, as well as imposing different conditions on identical transactions for partners and placing them in a non-competitive position.
The actions taken by Magticom have created the perception that the company may have imposed unfair tariffs and abused its dominant position. Therefore, the Communications Commission has launched an investigation into the case in order to examine the possible violation of the Law of Georgia on Competition.
