May 30, 2024 16:57

Domagoj Jurjevic: Georgian Mobile Market Research was Based on Best EU Practices and Found the Market to be Uncompetitive and in Need of Regulation

“We found that there is a lack of competition on the Georgian mobile service market. This is due to the presence of a dominant company in the shape of Magticom. Based on the market analysis, we developed obligations that ComCom ought to impose on Magticom in order to remove market entry barriers for new players.” This statement was made by the head of the expert group participating in the comprehensive research of the mobile services market commissioned by the Communications Commission, Domagoj Jurjevic, during the research presentation held by ComCom. 

Domagoj Jurjevic stated that the Georgian mobile communications market research was carried out by experts based on best EU practices. According to him, the research also established that the uncompetitive environment indicates market failure, the main indicators of which are the lack of innovative technologies, the high profitability rate (EBITDA margin) of operators, and the growing revenues. The expert also noted that there is only one mobile virtual network operator (MVNO) operating on the Georgian market, at a time when there are several similar companies in European countries, which means lower barriers and less regulation. 

During the meeting, the expert also focussed on the ways to eliminate and solve the problems of competition on the Georgian market. According to him, this means imposing access obligations on Magticom, whereby the operator with significant market power must grant access to its own infrastructure to all interested companies: “According to the study, the interested operators should be able to access Magticom's infrastructure and use the network against the payment of the appropriate fee. Thus, it will become a source of additional income for the operator with significant market power. At the same time, it will enhance competition on the market which, in turn, will improve the quality of the service provided to the customer and reduce the prices,” the EU expert stated.

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