Quality-oriented Silknet and Subscribers Discontent with Growth in Prices
Starting March 4 Silknet will increase service tariffs on both optical and DSL internet connection and TV services, as well as on consolidated TV and internet services. Tariffs will grow on services of all quality and price categories. Moreover, Region and Mini packages will be removed and the company will provide services under the Standard package terms. Prices on various packages of Internet and TV services will rise, consequently, by 6 GEL to 10 GEL.
The price of the Silk Optic minimum package with 5 megabyte/second speed was 20 GEL. Starting March 4 the speed will be doubled and the price of 10 megabyte/second in a new package will be 26 GEL. As to prices of other packages, the price of 12-25 megabyte package will be 40 GEL instead of 27-30 GEL, while 4-megabyte package will cost 50 GEL instead of previous 40 GEL.
Previously, the price of DSL internet with 1 and 2 megabyte connection speed was 18 GEL, but now the speed will increase to 3 megabytes and the price will rise to 24 GEL. Subscribers will pay 45 GEL for 6 megabyte connection, while previously the package offered 3-4 megabyte connection for 37-45 GEL.
The price of SilkTV package with Movie, Sports, Plus, Hobby and Children categories will rise by 5 GEL to 10 GEL. The price of HD and 18+ packages will increase by 10 GEL to 15 GEL.
Increased tariffs are related to improved quality. The subscribers will receive higher-level services for higher tariffs, the company management says.
“Internet connection speed will increase. HD content will be enhanced in SilkTV. Thus, price increased because of improved service quality”, Teona Tsereteli, Silknet PR Service head, said.
Indeed, the improved quality is important, but the subscribers’ opinion should be also taken into account. The company decision would be supposedly acceptable if subscribers could choose between the old and new quality and tariffs. Even more so, tariffs rise on all services and the consumers cannot make choice. Subscribers have to either endure the new reality or move to other operator and this latter case is related to additional expenditures. Contrary to the subscribers, Silknet assures subscribers need improved quality and the service tariffs should equalize to the market prices. In reality, Silknet prices are 3 GEL to 5 GEL higher compared to competitor Caucasus Online prices.
In general, the current situation on the Georgian internet market is another issue for discussions. Only two major operators work on the market and instead of lowering prices, they permanently increase services. The Georgian national communications commission (GNCC) has introduced the same conclusion after research and analysis of the sub-segment of the market for accession to internet global resources. GNCC has named JSC Silknet and LLC Caucasus Online as major market players. According to the Georgian law on electronic communications, GNCC has imposed the following specific obligations: transparency of information, forbidding discrimination, tariff regulation (top margin per megabyte is 32 GEL) and separate registration of expenditures and revenues. But the market realities make these obligations and even the top margin nonworking and it would be better the regulator interfere more in the current situation.
Anyway, starting March 4 Silknet subscribers will have to pay increased tariffs despite they want or not to receive improved quality at the expense of increased prices. The company decision has brought negative reaction from the subscribers. According to the information of GuriaNews news agency, the subscribers assert Silknet permanently violates the agreement terms and the internet connection speed is lower compared to the respective tariffs. Because of this factor in only Chokhatauri both private and corporate subscribers ceased contracts with Silknet. Similar cases were registered in other regions too.
We should wait for the future developments to see whether increased tariffs are acceptable for Silknet subscribers and whether this decision has increased the number of Caucasus Online subscribers.
Finally, we publish Silknet’s current and new tariffs that will come in force on March 4.