“The comprehensive study showed that Magticom enjoys significant advantages over other companies on the Georgian mobile service market in terms of financial resources, customer numbers and infrastructural capabilities. It is unlikely that these circumstances will change in the near future, that Magticom’s market share will fall below the 40% threshold established by the Georgian legislation for operators with significant market power, or that other operators will reach the said threshold. We therefore concluded that Magticom is an operator with significant market power.” This assessment was delivered by the EU experts who were involved in preparing the comprehensive study. Results of the comprehensive study were presented by ComCom member Ekaterine Imedadze and the head of the EU group of experts, Domagoj Jurjevic. The event was also attended by the other EU experts participating in the study – Christian Jean-Pierre Francois Marie Hosefid, Stanko Taskov and Peter Lundy. 

During the meeting, participants presented the circumstances based on which the experts deemed Magticom to be an operator with significant market power. According to them, the mobile service retail market analysis showed that the market is stagnating, as evidenced by the market shares of mobile network operators remaining unchanged over a period of 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%). 

Furthermore, according to the comprehensive study, Magticom’s status as an operator with significant market 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. 

Magticom’s average revenue per user (ARPU) 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. 

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. 

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.