Business
Posted: 2 weeks ago

ComCom Considers Granting "Magti" Significant Market Power Status with New Regulations

The Communications Commission of Georgia is considering designating "Magti" as an operator with significant market power. If granted, this status would allow the Commission to impose new regulations on "Magti," which, according to Commission member Ekaterine Imadedze, would improve competition in the market. The proposed regulations include the admission of virtual operators and other measures to be defined for "Magti."

On June 6, the Communications Commission will discuss a study on the Georgian communications market and the potential granting of significant market power status to "Magti."

On February 22, 2024, the Commission established a methodology for identifying entities with significant market power. According to this methodology, a company can be granted this status if it holds a market share exceeding 40%.

As of 2024, "Magti" has 2,273,178 subscribers, representing 41.5% of the mobile communication market. In the first quarter of 2024, the company generated 95.3 million GEL in revenue, accounting for 48% of the total mobile communication market revenue. Therefore, "Magti" meets the criteria for significant market power based on both subscriber numbers and retail revenues.

Ekaterine Imadedze asserts that "Magti's" actions currently harm consumer interests and that the operator wields significant market power, influencing the entire communications market with its tariff decisions.

"When 'Magti' increased its prices, the other two operators followed suit. This is a clear indicator that competition in the market is unhealthy, as the behavior of the market leader is being replicated. This limits competition and reduces consumer choice. Additionally, last year's fifth-generation Internet license auctions saw participation from only one operator, 'Selfie,'" Imadedze stated.

Consequently, Imadedze emphasized that "Magti" is an operator with significant market power and that the market would stagnate without the introduction of regulations. She proposed three types of obligations for such operators:

  1. Admission of a virtual operator, with transparent admission conditions and a cost-oriented tariff.
  2. National roaming, allowing operators with less coverage to access regions where their services are insufficient, for a fee.
  3. Co-location, permitting the rental of specific network elements, thus benefiting both large operators and those with less technical capability by allowing the rental of technical capacity.

The Communications Commission presented an analysis of the mobile communications market prepared by European experts, who also identified "Magticom" as an operator with significant market power. The study revealed market stagnation, with mobile network operators' market shares remaining unchanged over the last five years. During this period, the total number of subscribers increased by 10%, and revenue grew by 45%. Despite this, "Magticom" has maintained its position as the market leader, holding 41% of subscribers and 49% of revenues in 2022 and 2023.

These findings highlight the need for regulatory interventions to promote healthy competition and consumer choice in the Georgian communications market.