“The fixed internet retail market is quite uncompetitive, which is damaging for Georgian consumers. The wholesale market is therefore in need of ex-ante regulation,” stated Domagoj Jurjevic, head of the EU expert group that carried out the comprehensive study of the fixed broadband market commissioned by ComCom. 

According to Mr. Jurjevic, both the mobile and fixed broadband markets have been studied in accordance with the EU market analysis methodology and best practices, but the findings were based specifically on data obtained from the Georgian telecom market. The EU expert further noted that most Georgian consumers use low-speed internet due to the lack of competition on the market, and that the wholesale market requires ex-ante regulation. The research also established that Magticom is an operator with significant market power and ought to be subject to regulation in order to develop competition on the retail market. 

“Prior to conducting the analysis of the fixed market, we collected information about the network coverage of all operators according to different technologies. Based on the EU market analysis methodology, we identified the fibre-optic broadband services market and concluded that the retail market is quite uncompetitive, which is damaging for Georgian consumers. Regarding the accessibility and quality of services, we should highlight the fact that most Georgian consumers use low-speed internet, which we believe is related to the lack of competition on the market. We therefore conducted an analysis of the wholesale market and concluded that there is a need for ex-ante regulation. Based on the available data, we also established that Magticom is an operator with significant market power. 

Regarding the regulatory obligations, based on the information available to us, we have tried to differentiate the obligations according to different conditions. We divided Georgian settlements into three groups. Settlements in the first cluster require full regulation, the second cluster requires relatively light regulation, while the third cluster requires light regulation. According to the analysis, only 9 settlements fell into the third cluster, where there is a competitive environment and all conditions of competition are met. In other Georgian settlements, there is a need to establish certain regulations that will help develop competition in the retail market. 

It is important to note that the Communications Commission will monitor the development of competition. If the competitive environment changes in any of the settlements during the monitoring period and the 3 criteria set by us are met, those settlements will be freed from regulation. This is a dynamic process that we believe will help improve competition on the market,” Domagoj, Jurjevic stated.