IT & Communications
Large scale foreign investments made it possible to introduce modern communication means and new types of services on Georgia’s telecommunications market. 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. Over the past few years the telecommunications market and its share in the country’s Gross Domestic Product have grown rapidly.
Fixed Communications Service
From year 2000 to 2007 the numbers of fixed line users have increased by 12.6% and by the end of 2007 it equaled to 556 thousand customers. In 2007 fixed communication service income amounted to 328,800 million GEL and equaled to as much as 29,5% of the total telecommunication sector.
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
The tendency of growth in mobile communications service sphere has been maintained in 2007. In 2007 the revenues collected from this sector of economy exceeded GEL 704 million (including VAT). It should be noted that mobile communications sector enjoys highest growth rate and its share in the entire market makes almost 63%.
Number of active subscribers of mobile communications network reached a record high making 2,600,000 in 2007. Even in 2003 the number exceeded that of subscribers of local telephone operators.
Monthly revenues from the mobile communications service per person made GEL 57.74 in 2000 while in 2007 it climbed to GEL 217
Internet Network Service
In 2000-2007 revenues of the operators working in the Internet providing increased from GEL 3.7 million to GEL 42.5 million. In 2006 growth of revenues compared to a previous year’s figures reached 62.5%.
After mobile communications the Internet service is steadily growing segment in the market of the electronic communications. In 2007 number of the consumers using the ADSL modem technology was still increasing and by the end of the year it went beyond 41,000.
“Caucasus Online”- the leading Georgian internet provider plans to implement a new Fiber Internet Project – Gelink. (Gigabit Ethernet link) The Gelink project is built on FTTH (fiber to the home) concept and it allows the user to receive 1Gb/sec. Once the project has been implemented it will become possible to exploit the full potential of the internal communication resources and develop advance internet connection.
TV and Radio Broadcasting
In 2007 the companies operating in TV and radio broadcasting field collected GEL 80 million revenues in total which made 7.2% of the entire communications market.
Before 2002 this segment of electronic communications was not particularly attractive due to a small size of commercial advertising market and low growth of development. Since 2003 the segment has expanded sharply.
Investment Opportunities
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