“Magticom holds a dominant position on the fixed fibre-optic internet market in terms of the number of customers and infrastructure, which allows it to operate independently from customers and competitors. It is therefore an operator with significant market power, and this will not change without ex-ante maket regulation.” These were the findings of the EU experts involved in the comprehensive study of the fixed broadband market, which was commissioned by ComCom. According to the experts, the given challenge can only be overcome by imposing the appropriate obligations on Magticom and instructing the company to open the market and allow other operators access to its own network. The results of the study were presented to the public by ComCom member Ekaterine Imedadze today.

One of the indicators of Magticom’s significant market power is the fact that out of the 952,000 fibre-optic internet users in Georgia, more than half (53%) are Magticom customers, followed by Silknet’s (32%), Akhali Kselebi (7%) and Skytel (2%), while the total share of other operators is 6%. It is also worth noting that Magticom’s fibre-optic network covers by far the most settlements in Georgia (602), while Silknet is only represented in 71 settlements, Skytel in 212 (Skytel mainly operates in small settlements), and Akhali Kselebi in 14. The research also established that Magticom is the sole supplier of fibre-optic internet in 392 settlements. Skytel is the sole supplier in 104 settlements, while Silknet is the sole supplier only in 2 settlements. According to the EU experts, these figures underscore Magticom’s significant market power.

The research established that last year Magticom collected the most revenues for fixed fibre-optic broadband services from natural person customers (GEL 146 million), which exceeded Silknet’s revenues by 76%, Akhali Kselebi’s by 1055%, and Skytel’s by 4092%. In terms of average revenue per user (ARPU), Magticom also holds the leading position (GEL 24.54), followed by Silknet (GEL 23.05), Skytel (GEL 20.13) and Akhali Kselebi (GEL 17.37).

Notably, the comprehensive study also found that in 544 out of the 994 Georgian settlements that are connected to the fixed fibre-optic internet network (accounting for 60% of the country’s population), Magticom’s market share exceeds 40%. In comparison, Silknet’s market share only exceeds 40% in 31 settlements that cover 15% of the total population. According to the experts, Magticom’s dominant position is also highlighted by the fact that unlike its competitors, it has a nationwide fixed network with an 88.6% coverage. The network coverage figures of the other operators are: 57.2% for Silknet, 4.9% for Akhali Kselebi, and 3.5% for Skytel. With regards to combined services (TV, landline and mobile phone services together with the internet), Magticom’s market share is 53.5%, followed by Silknet (38.3%), Akhali Kselebi (8%) and Skytel (0.2%).

The EU experts deemed Magticom to be an operator with significant power on the fixed broadband market and noted that without ex-ante regulation, over the next three years Magticom’s market share is unlikely to drop below the 40% threshold that determines its status as an operator with significant market power under Georgian law. 

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 comprehensive study was conducted over two years. Research of this magnitude has not been conducted on the Georgian telecom market before. The study conducted by the EU experts was also revised by the experts of TAIEX (EU Technical Assistance and Information Exchange Tool).