The Communications Commission will suspend regulation of tariffs on the mobile service market, giving mobile operators back the flexibility in setting the rates. Suspension of tariff control will give the mobile service providers the opportunity to quickly respond to economic challenges during the pandemic, conduct investment and implement new technologies to continuously provide customers with high-quality services. 

The new mechanism, which came into effect as a result of changes to the Law of Georgia on Competition, allows sectoralregulators to use the Law on Competition and related legal acts when examining potential violations of competition rules in regulated areas of the economy. The Commission is currently conducting public administrative proceedings to this end. 

Following and based on this decision, the Communications Commission will be able to use the mechanisms stipulated in the Law of Georgia on Competition to act against any attempts by service providers to abuse their dominant position in the respective market segment, including any attempts to limit services to the detriment of customers. 

Thus, despite suspending the regulation of tariffs, the Communications Commission as the sectoral regulator retains the authority to examine any attempts by companies to abuse their dominant position and restrict customer interests. In case such violations are confirmed, the Commission will proceed to respond in accordance with the legislation. 

Today’s ruling by the Commission was based on the appeal by MagtiCom, Silknet and Beeline to suspend tariff controls on the mobile retail service market. The operators cited the pandemic-related economic circumstances, including inflation and a challenging investment environment, as the basis for their request. Increased demand on telecommunications services during the pandemic placed a significant pressure on the network, requiring additional operational and capital investment. The pandemic reduced the demand on certain services such as roaming, as well as affected the paying capacity of consumers. The companies pointed out that the aforementioned economic factors also had a negative impact on investment and implementation of new technologies such as 5G networks. 

Against the background of current trends, development of the 5G network has assumed critical significance both in Georgia and the rest of the world. The Communications Commission is planning to hold a 5G network auction. To this end, it has already implemented measures such as allocating frequencies, calculating the starting price and establishing other conditions for the auction. Companies are facing the challenge of attracting investment to cover the significant costs associated with the development of the 5G network. 

One of the prerequisites for the suspension of retail tariff control in European countries was for major companies to grant network access to mobile virtual network operators and help develop the MVNO market segment. Provision of access to virtual operators helped liberalise the EU telecommunications market and improve its competitive environment. Ultimately, this resulted in customers benefitting from liberal tariffs on mobile retail services. 

It should be noted that MagtiCom, Silknet and Beeline have expressed their willingness to provide mobile virtual network operators with access to their networks. 

Based on the above, the Commission discussed the issue of providing tariff flexibility for mobile operators and ruled that in order to ensure stability and development of the telecom industry, attract investment and overcome the pandemic-related economic challenges, the tariffs on mobile retail services should be deregulated.