Upon the conclusion of comprehensive study of the fixed internet market commissioned by ComCom, EU experts deemed Magticom to be an operator with significant market power in terms of the number of customers, revenues and infrastructure.  The experts concluded that in order to improve the uncompetitive environment on the market, the Communications Commission must impose specific obligations on Magticom to remove market entry barriers and create more favourable conditions for the customers. 

One such obligation is providing other operators with access to its own network against the payment of a fee, allowing the operators to enter the market or expand their network without large-scale investment and provide more effective competition to the large operators.

The second obligation recommended by the experts is the tariff regulation obligation, which sets an upper limit for the network access fee. More specifically, in accordance with the internationally recognised LRIC methodology, the Commission must determine a fair maximum network access fee, which will prevent the operator with significant market power from setting unfair tariffs for interested companies. 

In addition, the EU experts concluded that Magticom should assume the obligations of transparency and non-discrimination. This implies Magticom having to publish an invitation offer with detailed technical and commercial terms, providing the interested operators information about the terms of network access. The non-discrimination element implies that Magticom must offer all operators non-discriminatory terms with a cost-oriented fee, to ensure that the interested operators will be able to conduct their activities on commercially attractive terms. 

Another obligation recommended by the EU experts will require Magticom to present a separate breakdown of costs, which will allow the Commission to monitor operations and ensure that the operator does not force a competitor out of the market through cross-subsidisation, which involves lowering the price of one product at the expense of other services.

To ensure that the obligations recommended for the operator with significant market power are proportionate and fair, the EU experts grouped Georgian settlements according to competitiveness and determined different obligations for Magticom for each group. Specifically, the research found out that 981 of the 994 settlements connected to the fixed fibre-optic broadband network have an extremely uncompetitive environment. Therefore, the experts deemed all five obligations listed above to be necessary for these settlements. Four settlements were evaluated as locations prone to effective competition, with the experts recommending relatively light obligations in these areas (the establishment of an upper threshold for the access fee only in the central part of the network). For the 9 settlements with a competitive environment, the experts recommended minimal regulation (only the obligation to provide access). 

By imposing the aforementioned obligations, the Commission will facilitate the establishment of new players on the market, strengthening of the existing players, and creation of a competitive environment, which will allow Georgian consumers to benefit from diverse and favourable terms like their European counterparts. 

The practice of regulating access to fixed internet is employed by many European countries, including Belgium, Germany, Croatia, Italy, Spain, Norway, Denmark and others. 

The results of the study were presented by the Communications Commission today. 

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).