IT & Communications

 Large scale foreign investments made it possible to introduce modern communications means and new types of services in Georgia telecommunications system. In 1992 only 9.8% of local telephone exchanges were equipped with new technologies. However by January 2006, 54% of 565,000 such customers enjoyed modern systems. Until 1995, the main long-distance cable and radio relay lines were equipped only with similar system, but now the number and length of fiber optic cable and modern digital radio relay lines have dramatically increased. In 1992 there were only two automatic long-distance telephone exchanges. By January 2006, five international automatic telephone exchanges were in operation. The telecommunications market in 2006 was distributed among the operators in the following way:

 

 

Fixed Communications Service

 

In 2006 fixed communication service market total income increased to 298.8 million GEL. Income growth rate on this segment substituted 18.5% and the mentioned segment rate on communication sector substituted 29.8%.

The biggest part of income from the operators carrying out their activity on this segment was received by “Georgian Entire telecommunication Company”. LTD “Akhteli” and LTD “Akhali Qselebi” hold almost 90% on this segment.

United Georgian Telecom is the market leader. It controls 75% of local fixed line networks and serves 72% of local calls. It has 350,000 fixed line subscribers (including 220,000 in Tbilisi). The company was privatized in June 2006 when the Georgian-Kazakhstan private company Black Sea Telecom Holding B.V. became 90.65% shareholder of the company for USD 90 million. Black Sea Telecom Holding B.V. and Central Asia Logistics B.V. later entered a deal, and the latter became owner of 40.65% of the company at the cost of USD 52 million. The new management of the company has indicated future plans for digitalizing their network as well as a provision of new services (DSL and CDMA), Internet, and cable TV. They are planning to provide cellular services as well by 2009-2011.

 

Mobile Communications Service

 

Increasing tendency of mobile communication service market segment continued in 2006. During 2006 total income from this segment exceeded 650 million GEL (VAT included), it was increased by 53.1% in comparison with the last year. The highest growth rate of total income from local operators on this segment was carried out in 2006. It should be mentioned that mobile communication market segment is the largest of this sector, and its rate on the whole country communication service market total income constitutes almost 65% (according data of 2006).

The mobile market penetration was 39% by the end of 2006. The GEL 650 million markets are shared by three mobile communication companies. There were two main mobile communications providers – MagtiCom and Geocell - on the market until earlier in 2007 when a new company – Mobitel - entered the market.

The mobile communications company MagtiCom Ltd., was commercially launched in September 1997. At present the company is owned by Telcell Wireless LLC and ITC LLC.

MagtiCom network covers over 97% of the populated territory of Georgia.

In March 2007 MagtiCom became the first company to contribute GEL 500. 000. 000, or, half a billion to the economy to Georgia. MagtiCom renders service to over 1.3 million subscribers by means of its two brands Magti and Bali.

The second largest mobile network company is Geocell in Georgia, which started in 1996, when Geocell became the first GSM operator in Georgia, operating on 900 MHz. The company was founded by Turkish and Georgian parties. The Georgian party was the holder of the controlling stock of the company.
After the merger of Geocell and Georgia’s third GSM operator GT Mobile, on March 27, 2001, Geocell became an authorized holder of GT Mobile (working on 1800 MHz frequency), followed by the very important introduction of the pre-paid system, Lai-Lai.

There are 510,000 landline telephones in Tbilisi. Outside of the major cities of Georgia, the majority of phone communication is done via mobile phones. Mobile phone providers Magticom and Geocell have 2,500,000 clients as of July 2007. 

LLC Mobitel launched its service in March 2007 with a “Simple” tariff rate of 0.02 GEL/min within the network, and 0.28 GEL/min for calls using other operators. Russian Vimpelcom Group (Beeline brand) is the parent company of LLC Mobitel. At present, the company’s service covers Tbilisi and Rustavi (city close to Tbilisi with a population of 120,000). The company will open its service center in Batumi (a Black Sea Port of Georgia) on May 6, 2007. At the time of this writing, Mobitel has approximately 15,000 mobile subscribers in Georgia.  

 

 

Internet Network Service

 

In the period of 2000-2006 income from internet network service market operators reached 26.15 million GEL In 2006 total income increase constituted 32% in comparison with the last year. In Georgian Electronic communication market, internet network service segment is the fastest growing segment next to mobile communication service.

By the end of 2006 there were 27.7 thousand internet users ADSL technology subscribers’ total number increased by approximately 81% in comparison with the last year.

Number of Internet Connections -- There are 3 major internet providers in Georgia; (www.caucasus.net, www.online.ge and www.sanet.ge. They make up approximately 87% of the Georgian market. (Data obtained as of July, 2007). Estimates of the number of internet users in Georgia range from 120,000 – 130,000; the Government in its Telecommunications Strategy is committed to increasing this number in the major cities and rural regions.

 

 

Postal Service

 

In the conditions of a liberalized market, the most attractive market segment for operators was the market segment of international postal service. Only one company-“Post of Georgia” LTD provided service on the internal market. In 2000-2005, the income of the post changed and is now increasing less. The part of income received from postal services was writing correspondence, postal parcel, money sending and transferring (including pensions and aids); financial service was still high in the total income, although the amount of income received from the above-mentioned services proportionally decreased year by year with the development of the banking system in the country.

 

 

 TV and Radio Broadcasting

 

In 2006 total income received from companies in the sector of TV and radio broadcasting constituted 52.2 million GEL (VAT included), and in 2006 constituted 5.2% of total income from communication market. In comparison with the last year, income from companies within this sector increased by 64.6%.