Competitive Market with Permanently Growing Prices?!
Georgia’s internet market has been completely disoriented. Two main players Caucasus Online and Silknet grow service prices every year referring to accelerated speed, consumer interests and economic developments. There are tens of internet providers in Georgia, but only Caucasus Online and Silknet control over 60% market ratio. Thus, these two companies dictate the market conditions. Increased tariffs raised protests among subscribers, but in vain. Frequently, these companies refer to consumer interests and demands to substantiate increased tariffs. In reality, they have never followed the consumer interests and they increase service tariffs on the existing packages without introduction of any alternative packages. They even do not enable the subscribers to maintain the existing tariff and service conditions instead of increased prices and speed.
Caucasus Online Grows Tariffs after Silknet
Currently, Caucasus Online and Silknet have created, in practice, a bipolar market and naturally, their appetite grows and they have been increasing service tariffs on internet and TV packages.
Last year Caucasus Online increased service tariffs by 5-7 GEL referring to a growth in connection speed. Then Silknet grew tariffs on March 4 on both optical and DSL internet services and TV packages, as well as combined packages of TV and internet services. Prices rose by 6-10 GEL on all packages. The company substantiated the decision by the argument the service quality had been improved and the connection speed had been accelerated.
“Internet connection speed in basis packages for optical and DSL internet grows by 100% to 200%. At the same time, internet and TV service tariffs change and Silknet prices have practically equaled to the market price. Prior to this decision the company had managed to keep quite low tariffs for a long period. But now we have decided to equal prices”, Ilia Enuqashvili, a director for the strategic development department, noted that time and added the connection speed had increased because of consumer demands.
After Silknet increased tariffs, the company could lose subscribers, who were expected to move to Caucasus Online, but, surprisingly, contrary to competition principles, Caucasus Online also spread information on a growth in prices.
Prices for optical-fiber internet services in Caucasus Online are as follows: 10mb/sc – 25 GEL, 30mb.sc – 35 GEL, 50mb.sc – 45 GEL and 100mb/sc – 100 GEL.
Starting March 23 the new tariffs are as follows: Optimal – 10mb/sc – 27 GEL, Express 30mb/sc – 37 GEL, Extreme – 50mb/sc – 50 GEL, Infinite – 100mb/sc – 100 GEL. DSL technology – 3mb/sc Maxi 8mb/sc – 70 GEL./
Prices of internet services to corporate bodies are beyond all logics.
We have already talked about prices for the individual sector. Now we will make focus on high tariffs set to the corporate sector. The information is published on the website: http://caucasusoffline.com
1. Caucasus Online’s internet speed and prices:
6mb/sc local and 0.73mb/sc global (1pc) – 55 GEL
8mb/sc local and 1mb/sc global – 75 GEL
10mb/sc local and 2mb/sc global – 145 GEL
Global=average price of local
10mb/sc- 1500-2000 GEL
50mb/sc – 5000 GEL
100mb/sc- 8000 GEL
2. Silknet internet speed and prices:
10mb/sc global/local guaranteed speed – 800 GEL
20mb/sc glob al/local guaranteed speed – 1600 GEL
50mb/sc global/local guaranteed speed – 4 000 GEL
100mb/sc global/local guaranteed speed – 8000 GEL
1gb/sc global/local guaranteed speed – 70 000 GEL
3. DeltaCom speed and prices:
10mb/sc global/20mb/sc local – 1450 GEL
20mb/sc global – 2700 GEL
50mb/sc global – 6 000 GEL
100mb/sc global – 12 000 GEL
As reported, the price of 10mb/sc internet service for individuals makes up 100 GEL, while the price is 8 000 GEL for the corporate sector. The difference is catastrophic. As to revenues from the individual and corporate sectors:
Individual sector in 2014 – 218 915 subscribers and 43 557 251 GEL revenues
Corporate Sector – 12 917 subscribers and 18 103 539 GEL revenues
2. Caucasus Online
Individual Sector in 2014 – 155 126 subscribers and 43 401 832 GEL revenues
Corporate Sector – 6 379 GEL and 13 086 938 GEL revenues.
This is a good sample to prove the Georgian National Communications Commission (GNCC) should intervene in the heaviest situation on the market.
Prices on Internet Packages is one of the Highest in Developing Countries
Samples of various developed countries show there are one of the highest internet prices in Georgia.
Below we indicate samples of several countries, including major part of them are developed countries, to more evidently appraise the current situation in Georgia.
Prices are indicated due to the connection speed that is provided by operators on the Georgian internet market. The chart does not contain samples of Armenia and Azerbaijan, because Georgia carries out internet re-exports from these countries.
The table demonstrates internet service tariffs are one of the highest worldwide in Georgia. Moreover, these prices continue growing. Therefore, GNCC should pay due regard to these circumstances and put an end to the current disorders on the internet market.