Georgian cell market swindles
25 November, 2010
Georgian cell market swindles

Geocell, one of the key cell market players of Georgia, is fined by GEL 90 thousand for violation of consumer rights.  The punished company agrees to pay the penalty although it finds the sanction unfair and plans to file a lawsuit against the cell market regulatory body.
Georgian National Communication Commission (GNCC) fined Geocell on November 19, 2010 for breaking the regulation on Service Provision to Electronic Communication Sector and Protection of Consumer Rights. Starting 2007 the law in question obliges

all cell market operators to round off the cell call duration by a second precision. However, Geocell practiced the call round-off by a 5-second precision for Lai-Lai product consumers that violated their rights.
Magti GSM, another key cell market player of Georgia, discovered the illegal practice of its competitor and submitted a complaint on Geocell in this past August.   GNCC double-checked the information and proved the fact of violation of consumers’ rights. The regulatory body obliged Geocell on September 3, 2010 to stop violation of consumers’ rights and establish 1-second-based-round-off system so that consumers could pay exactly for the time they actually used.
As GNCC explained to Georgian Journal, if Lai-Lai subscriber talks for 11 seconds for instance, the call duration is rounded-off to 15 seconds and a subscriber pays for 15 seconds that leads to extra charging.
However, Geocell did not stop the unfair round-off system. And GNCC fined the disobedient company by GEL 90 thousand on November 19, 2010. If Geocell still resists stopping unfair charging, it may face GEL 250 thousand for repeated violation. 
As Sandro Sadaghashvili, Legal Expert of Geocell, informed GJ, they are going to obey and pay the fine but they feel innocent as far as they never hid that they used 5-second rounding system for Lai-Lai cell-calls. And that the law on protection of consumers’ rights lays ground to it.
“The fact that we were charging Lai-Lai cell-calls by 5-second precision was no secret; it was put on our official web-site in description of Lai-Lai tariff system starting 2007. The thing is that the law lays ground to double interpretation. It does not include clear stipulation that calls should be rounded by 1-second precision. It just says that the round-off must be implemented based on second-precision but does not elaborate by how many seconds. We obey to the GNCC punishment and will pay the penalty but do not rule out to file a complaint against this penalty decision at court,” Sadaghashvili elaborated.
According to Khatia Kurashvili, a spokesperson of GNCC, GNCC did not monitor the execution of demand on round-off system because they never supposed that companies could divert the rule that was quite clearly stipulating that the round-off should be based on one-second precision.
Sadaghashvili assures that the detailed information on round-off system was put in annual financial reports of Geocell submitted at GNCC each year and the regulatory body could easily discover it. “However GNCC discovered this fact only after Magti submitted a claim this past August,” he said.
Magti also got a warning in September along with Geocell for violation consumers’ rights. Starting August of 23, 2010 Magti introduced a new allegedly preferential tariff-system largely advertized as a “staggering sale in cell tariffs”. In its TV ad-rolls Magti has been touting that its new  tariff on calls within Magti network was 5 tetri per minute and the tariff fixed for outgoing calls [with other cell operators] stood at 18 tetri per minute. The older tariff was 28.8 tetri per minute on all calls. However after accurate calculation GNCC came to conclusion that call tariffs rather increased than decreased to Magti subscribers thanks to sophisticated scheme charging subscribers by 10 tetri instantly as the call started. Magti charged calls by the “staggeringly low” tariffs only after a second however the ad-rolls did not include a word on this instant charge by 10 tetri. As a result Magti subscribers thought that they were paying 4.8 tetri per 1- second call for instance, while in fact they were paying 10.83 tetri as GNCC calculated.  
“All in all the “great sale on cell calls” advertised by Magti covers 51.6% of calls implemented within its network and 19.05% of outgoing calls,” Kurashvili explains. “And after introduction new tariff system calls to Magti subscribers became more expensive to 48.4% of calls through internal network and to 80.95% of outgoing calls.”
Geocell and Magti having been operating at Georgian market for about 13 years make 43% and -46% of Georgian cell market respectively. The remainder 11% is made by Beeline, a part of the Russian-based VimpelCom Group, which entered Georgian market in 2005. Based on this statistics it comes out that rights of about 90% of Georgian cell subscribers were violated.  Therefore on September 3, 2010 [when GNCC warned Geocell to stop unfair round-off] GNCC obliged Magti to stop advertising of “great sale” and provide consumers’ with due information otherwise it faced a penalty of GEL 90 thousand.  However Magti obeyed the GNCC decision thus escaped the fine the Geocell faces to pay now.

Other Stories
Georgian citizens are granted the right to work in France
The French Embassy in Georgia made remarks on granting Georgian citizens the right to work in France
The New York Times: Bitcoin declines but Georgia still bet on it
The New York Times has recently published an article about reasons, challenges and causes of generating Bitcoin in the former Soviet country Georgia.
EU to allocate € 13 billion for Eastern Partnership countries, including Georgia
The European Union together with the World Bank plans to allocate investment worth € 13 billion for infrastructure projects in the Eastern Partnership countries.
Anaklia Port and its importance for Georgia
In 2016, Anaklia Development Consortium was authorized to launch the construction of Anaklia Port.
Cryptocurrency mining threatens electrical network in Abkhazia
In the breakaway region of Akbhazia rampant cryptocurrency mining is threatening the shaky electrical network, reports an article of the news portal EuroNet.
Caucasus Wine University to be opened in Gurjaani
In the Kakheti region a new viticulture campus of the Caucasus University is in the process of planning.
Photos describing life of the poorest in Georgia
Fight with poverty should be among top priorities of every government in every country.
Training farmers to rescue the organic hazelnut production in Georgia
Even drizzling rain and unpleasant gusts of wind can’t prevent the farmers from coming and participating in the agricultural training.
Bleak times for organic farmers in Georgia – but there is hope
Organic hazelnut production is a delicate plant in Georgia that has emerged just a couple of years ago. Various pests, among them the Asian stink bug Parosana, trouble hazelnut farmers and menace their livelihood – even before their businesses could really take off.
Hybrid car imports are going through the roof in Georgia
Thanks to their fuel economy, the popularity of hybrid cars is increasing in Georgia, where fuel affordability is low and prices for fuel are unstable.
The New Year offer from MAQRO Construction - Apartments with unbelievable discounts and the parking spaces for FREE!
Location, green yard, spaces for various needs, experience of the construction company and parking space are the main important criteria for potential buyers of apartments.
Interview with the co-founder of Kiwi Vegan Café – the first vegan place in Tbilisi
Behind the Kiwi Vegan Café stands a group of activists who wants to raise Georgian’s awareness for animal rights and welfare.
Biblusi opens first shop for tourists - Georgian
The largest book shop in Georgia Biblusi opens the first shop specially designated to the needs and interests of tourists and named it Georgian.
Georgia improves by five ranks in the Prosperity Index
In the overall Prosperity Index rankings, Georgia has climbed by 5 positions from 85 to 80 when compared to last year. As such, Georgia is the best performing country in the CIS zone.
The future is bright for electric cars in Georgia
The numerous hybrid cars in the streets of Tbilisi cannot be overlooked. Entrepreneur Sulkhan Gvalia calls them “pagers”, referring to the predecessor of mobile phones.
Georgia’s fight against the big tiny enemy – Asian Parosana
It’s a tiny creature, but the harm it did to the Georgian agriculture sector was and still is immense.
New cable route: from Kobi to Gudauri in 15 minutes
On the 15th of December, cable transport is scheduled to be opened connecting Kobi and Gudauri.
Tourist boom in Gudauri – majority of hotels are booked by foreigners
Gudauri is among the most popular winter resorts in Georgia.
Medical tourism increases in Georgia
In the last 9 months, Georgia was visited by 19 500 foreigners for medical and recovery purposes.
Doing business in Georgia has become easier than in America
According to the Doing Business 2019 report published by the World Bank, Georgia ranked 6th among 190 countries in terms of simplicity of doing business. This was an improvement over two ranks compared to last year.
Problems that foreigners frequently face in Georgia
The importance of Georgia as a tourism hub is growing year after year.
Tbilisi TV Broadcasting Tower – Better than the Eiffel Tower?
It is planned to renovate the Tbilisi TV Broadcasting Tower, one of the landmarks in the capital.
Georgian Fusion Menu by The Biltmore Hotel Tbilisi
5,895,914 international visitors have visited Georgia between January and August of 2018. Compared to the previous year the number has increased by 12.2 per cent.
Advertising of gambling and lucrative games may become banned in Georgia
Advertising of gambling and lucrative games may become banned in Georgia. Those who violate the new rule would be fined GEL 10 000.
Lebanese café-lounge Beirut opens in Tbilisi
What is necessary to organize an unforgettable event? – Fun, emotions, lots of surprises, good music and delicious menu.
GEL Exchange Rate
Other Stories
Recently Toyota rolled out Global Campaign under this slogan that reflects the Olympic and Paralympic Spirit of Encouragement,
A couple from Switzerland combines Swiss tradition and technology with Georgian products. Their cheese is made in the Georgian mountains and sold in local stores and hotels.
It has been more than five years since the residents of Lilo village, near Tbilisi, cannot open their windows.
63 000 GEL was received by the Georgian Agro Export Group which is just a small part of the European Neighbourhood Programme for Agricultural and Rural development.
Georgian entrepreneur Guka Tavberidze, who runs his own business in the UK and does it quite well, has been invited by BBC
The grand opening of 7-star The Biltmore Hotel Tbilisi took place in Georgia’s capital on July 31.
DUSHETI, Georgia – The Georgian government and the World Bank will allocate USD 5.6 million (12 million GEL) to fund
A new Georgian clothing brand named Person has emerged in Georgian market.
Georgia is in the midst of an economic maelstrom, Euronews reports.
Situation at Georgia’s mineral water market is interesting: over the last year, the volume of export has grown by 56 percent. According to “GeoStat”, over $114 million worth of mineral water was sold
GEL Exchange