On the basis of the comprehensive study of the mobile communications market commissioned by ComCom, EU experts found that LLC Magticom is an operator with significant market power. Thus, to improve competition on the mobile services market and create diverse choices for the consumers, the company must be subject to specific obligations, particularly to allow other interested companies access to its infrastructure and thereby open up the market. 

Analysis of the mobile service retail market found that it has been stagnating due to the market share of the operators remaining virtually unchanged for the past 5 years. During this time, the total number of subscribers increased by 10%, while revenues increased by 45%. Against this background, in 2022 and 2023 Magticom continued to lead the market in terms of both the share of mobile subscribers (41%) and revenues (49%). Magticom’s average revenue per user in 2022 was GEL 14, followed by Silknet (GEL 12) and Cellfie mobile (GEL 8). In 2022, a new mobile virtual network operator entered the market in the shape of Hallo, whose ARPU was GEL 8.5. 

Furthermore, according to the comprehensive study, Magticom’s status as an operator with significant power is underscored by the fact that the company generated 51% of total mobile internet traffic in Georgia in 2022, while its closest competitors Silknet and Cellfie Mobile accounted for 30% and 19% of the traffic, respectively. It is worth noting that mobile internet consumption increased by 592% over the last 5 years. Throughout this time, Magticom maintained its position as market leader. As of 2022, Magticom’s network traffic was 69% higher than Silknet’s, and 178% higher than Cellfie Mobile’s. More specifically, Magticom transmitted 232 petabytes in internet traffic, ahead of Silknet (137 petabytes) and Cellfie Mobile (83 petabytes). The experts therefore concluded that Magticom enjoyed significant advantage over its competitors on the mobile access wholesale market. 

The study also established that in 2019-2022, Magticom invested significantly more in infrastructure than its competitors. For example, Magticom accounted for 58.6% of new base stations during this period, followed by Silknet (35.4%) and Cellfie Mobile (6.1%). Magticom also spent twice more on equipment than Silknet and Cellfie, which once again points to the company’s great power and potential. 

In light of the above, EU experts believe that Magticom enjoys considerable advantage on the market and is an operator with significant market power (SMP), as it is far ahead its competitors in terms of financial resources, user numbers and infrastructure. Based on the recent trends, the experts also do not expect Magticom’s market share to drop below the 40% SMP threshold set by the Georgian legislation, or Silknet and Cellfie Mobile to reach the 40% threshold in terms of revenues or user numbers. 

In 2022, ComCom launched a comprehensive telecom market study as part of the EU-funded Association Agreement Facility project. The study involved EU experts and was designed to enhance competition on the Georgian telecom market, provide consumers with diverse and affordable high-quality services, and bring the Georgian regulatory framework closer to the EU framework in accordance with the country’s obligations under the Association Agreement.