ComCom Launches the Second Phase of Comprehensive Study of the Telecom Market

The Communications Commission has launched the second phase of the comprehensive study of the Georgian telecommunications market, one of the main parts of which is an in-depth study of corporate offers for business companies in the fixed retail market. To this end, the Commission held a working meeting involving EU experts, which was attended by representatives of MagtiCom, Silknet, Selfie Mobile, the Small and Medium Operators and MVNO Association, as well as other stakeholders. The meeting served to ensure the involvement of stakeholders in the research process from the very first stage. This phase of the study aims to determine the extent to which the existing offers are available to legal entities with non-standard requirements for fixed internet connection, as well as to assess the competitiveness of the market and determine the ways to solve the identified challenges in accordance with European practices. 

The goal of the first two phases of the comprehensive study is to make the Georgian telecommunications market more competitive, allow new players to emerge on the telecom market, facilitate the further development of small operators, and create alternative offers on the mobile and fixed markets. In addition, consumers should have the opportunity to choose and receive alternative services, which will increase competition and ensure the diversity and accessibility of services. 

The second phase of the comprehensive study also includes an analysis of the wholesale markets that were assessed as potentially requiring regulation during the first phase of the study. Specifically, these are: the wholesale market for access to communication infrastructure, and the wholesale market for IP transit (including the wholesale market for access to global internet resources). The study will determine whether there is an operator with significant market power in these markets and, if that were to be the case, an appropriate, effective and proportionate regulatory framework will be outlined. 

In addition, representatives of the Communications Commission and the research expert group held a working meeting with representatives of MagtiCom. The meeting served to monitor the tariff obligations developed by ComCom during the first phase of the comprehensive study, and specifically addressed the issue of developing a margin squeeze test methodology that ensures fair access conditions for those wishing to access the mobile and fixed networks of MagtiCom (an operator with significant market power). The purpose and need for the company’s involvement in the development of the methodology was explained in detail during the meeting. 

The team of experts is composed of qualified personnel with many years of experience in the telecommunications sector. Domagoj Jurjevic has 20 years of experience in telecom sector regulation and policy development. He has held leading positions in the Croatian telecom regulator HAKOM for 14 years, and has conducted 18 market analyses under the EU's electronic communications regulatory framework. He has participated in the process of developing and implementing the Electronic Communications Law. In addition, he was a member of the governing board and vice-chairman of the Body of European Regulators for Electronic Communications (BEREC). As for Christian Jean-Pierre Francois Marie Hosefid, he has 30 years of experience working in the Directorate-General for Competition at the European Commission. Over the years, he held the positions of Head of the Sector and Chief Expert, and was involved in the introduction of new directives and preparation of relevant guidelines for the regulatory bodies of member states. He also became Chief Expert at Cullen International. He has many years of academic and practical experience in the telecom sector in the field of research, analysis and implementation of European directives. 

Another expert involved in the study, Stanko Taskov, has 30 years of experience in IT in the field of communications. He is a technical expert and head of the IT department of the Slovenian communications regulatory authority (AKOS). In addition, he is a member of the BEREC expert group and a TAIEX expert. As for Peter Lundy, he has been working in the telecom sector for more than 30 years. He has led more than 25 projects in 40 countries on digital competitive markets, electronic communications sector policy, as well as legal, technological and regulatory reforms. He worked for many years as an economic and technical expert in the European Commission, was the leader of the EBRD team in different countries, and prepared a number of comprehensive studies in the EU member states. He also worked as an expert at Cullen International, where he carried out a project to assess the investment environment for the development of broadband infrastructure. 

The margin squeeze methodology development process will be led by Nikola Ognenovski together with the aforementioned team of experts. Mr. Ognenovski has many years of experience in the telecommunications sector, including in the development and management of telecom regulation strategy, implementation of EU directives, and development of tariff models. He spent several years working for an operator with significant market power within the Deutsche Telekom group, ensuring compliance with regulatory obligations. 

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 study is fully consistent with the telecom market analysis approaches in the European Union and is based on best European practices. Research of this magnitude has not been conducted on the Georgian telecom market before. 

The first phase of the comprehensive study was completed in 2024. It found that both the fixed and mobile communications markets were uncompetitive and stagnating, and that MagtiCom was an operator with significant power on both markets. Consequently, the Commission imposed obligations on MagtiCom to allow other companies access to its network.