Communication Regulatory Body Accused of Protectionism
17 January, 2013
Communication Regulatory Body Accused of Protectionism
Georgian National Communication Regulatory Commission is accused of protectionism and its activity reported to the Prosecutors’ Office for further investigation.
Association of Young Financiers and Businessmen of Georgia (AYFB), a non-governmental watchdog closely keeping an eye on the activity of Georgian National Communication Regulatory Commission (GNCC), sent a request to General prosecutors’ office of Georgia on January 12, 2013 to investigate activity of GNCC. AYFB asserts that GNCC to be created to protect fair and just competition rules at communication
market has been practicing protectionism instead and hampering to establish healthy competition climate at the market. To exemplify the illegal practice of GNCC, non-governmental experts accentuate on allegedly unfairly established inter-connection tariff rates thanks to which the Mobitel [a part of Russian-based VimpelCom Group] largely known as Beeline, one out of three cell market operators at Georgian market, enjoyed preferences and has been subsidized by the remainder two market players Magti and Geocell [a member of international cell market player TeliaSonera Group] in fact.
The inter-connection tariff is a charge that cell operators pay to each other for reaching networks of each other in order to provide thorough coverage service to subscribers. Until July of 2005, the interconnection tariffs between Magti and Geocell that were the only market players till 2007 when Beeline appeared on the screen, was 22.8 tetri. Both Magti and Geocell were quite strong redistributing market share by approximately 50 to 50% and enjoying high prices. In 2005 the interconnection tariff rate dropped to 18.8 tetri and after Beeline entered the market the figure was cut to 14.8 in May of 2008. However when the said tariff rate reduced to 8 tetri in August of 2010 it remained 14.8 to Beeline until February 1st of 2012. Otherwise, while Magti and Geocell paid 8 tetri to each other they had to pay 14.8 tetri to Beeline. The latter meantime paid 8 tetri back to its rivals for similar service. According to GNCC, the preferential tariff rate fixed for Beeline and making 6.8 difference in advantage to Magti and Geocell was introduced once Beeline was an emerging company and has no significant market share in pursuance with Georgian law that defines at least 15% of market share as the starting point to consider cell operators as players with significant market power.
However, when Beeline crossed the 15% limit in May of 2011 GNCC did not change the preferential tariff policy to it until February of 2012 when the inter-connection tariff rate was cut not to 8 fixed for Magti and Geocell [with 40.19% and 41.61% of average market share respectively by data of November of 2011] but to 11 tetri that still remains in force and Beeline still enjoys 3 tetri in preference.
“GNCC turned a blind eye in fact and granted almost a year of preferences to Beeline during which the latter enjoyed around 7 tetri difference compared to its peers,” Nodar Chichinadze, a Chairperson of AYFB, told Georgian Journal. “We consider this kind of activity of GNCC falls beyond the frameworks of law. Each operator has significant advantages at inter-connection market and therefore each should be treated equally by law. It comes out that thanks to GNCC illegal approach Magti and Geocell have been subsidizing Beeline that is forbidden by law.”
GNCC has different justification to the questioned alleged protectionist time-gap.
“To recognize a market player to be of significant power and impose related obligations to it, one of the important factors is to find out how stable is the achieved significant market share. Therefore it was essential to monitor the market and when the data attested that Mobitel LLC market share was stable only after GNCC defined it as a significant market player and imposed due obligations,” GNCC informed GJ.
AYFB even questions the 3 tetri difference as too much compared to the best world practice that fixes cap preferential difference in the interconnection tariff by sums equivalent to 0.006 tetri [in Germany], 0.7tetri [in Turkey], and 1 tetri in Belgium and Spain. UK, Romania, Slovakia, Iceland, Denmark, France, and Holland to not practice any tariff difference at all.
As GNCC explained to GJ, the law does not acknowledge any obligation on automatic equalization of inter-connection tariffs to market players once they are recognized to be significant market players.
“The cap limit of interconnection tariffs is based on individual expenses/outlays of each company. Expenses of Mobitel exceed expenses of Magti and Geocell per minute and GNCC is not authorized to charge it by tariff rate lower than its expense,” thus GNCC explained the still existing tariff-difference between Beeline and Magti/Geocell.
However both Magti and Geocell find this kind of preferential tariff rates discriminating. Magti even tried to find the truth through court and filed a lawsuit on discrimination case at civil court that settled in favor to GNCC on April 12, 2012. Magti went on to Appellation Court of Tbilisi but to no avail. The latter kept the decision of civil court in force in December of 2012.
Discouraged by Georgian court system largely acknowledged to be biased and been under governmental control, Geocell preferred to negotiate the issue through private talks with GNCC officials but to no avail, Sandro Sadaghashvili, Head of Legal Department of Geocell, said.
GNCC claims that no pretension respective Beeline’s inter-connection tariff rate has ever been submitted at GNCC, neither any proof attesting discriminating approach was presented at both GNCC and court.
“I completely agree with the AYFB claim that we have been discriminated and subsidizing Beeline however based on our own experience of unfairly lost legal cases we did not join Magti at court this time and preferred to find some agreement within GNCC [in private negotiations] itself but all efforts appeared futile. Now we have new and more decisive management and I do not rule out to go to court as far as we find the GNCC methodology of defining this interconnection tariff subjective and incorrect,” Sadaghashvili elaborated.
If this time court settles in favor to plaintiff companies GNCC may face financial liabilities to compensate losses to discriminated cell operators as far as it was responsible for defining the law and Beeline just pursued the law. Beeline makes no comments as of yet.
Chichinadze assures the inter-connection tariffs are just a part of illegal practice GNCC has been exercising for years and more revelations are in store.
Print
Other Stories
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.
Georgia second among the fastest growing tourist destinations in Europe
Georgia is among the fastest growing tourist destinations in Europe. The data is published by the UN World Tourism Organization.
Bitmain launches world digital mining summit in Tbilisi, Georgia
Bitmain CEO Jihan Wu and Roger Ver, CEO of Bitcoin.com Head Speaker List featuring Circle, DEX.top and Genesis Mining when Digital Mining Leaders Convene In Tbilisi on September 21-23
GAZELLE FINANCE GEORGIA AND TBC BANK HELP THE WESTERN REGIONAL CENTER OF MODERN MEDICAL TECHNOLOGIES EXPAND ACCESS TO QUALITY HEALTHCARE SERVICES IN KUTAISI, GEORGIA
TBC Bank and Gazelle Finance have teamed-up to support Medical City, a leading healthcare provider in the western region of Georgia to launch the Western Regional Center Of Modern Medical Technologies.
Equivalent to buried treasure – resources that are underused in Georgia
For 2018 the IMF Commission has forecast an annual economic growth for the Georgian economy of about 5,5%.
Does the quality of Georgian wine increase and how the export affects it
If we look at the data collected about modern Georgian wine, we will find out that the Georgian wines produced between 2015-2017 are much better in terms of their quality and Oenologic features rather than the wines produced between 2009-2011.
Japan simplifies the visa requirements for Georgian citizens
Diplomatic and economic relations between Georgia and Japan are now moving to a new phase. Recently Japan has decided to simplify the visa requirements for Georgian citizens.
M&S (Marks and Spencer) and H&M collections to be produced in Georgia
Garments manufacturer MGMTEX will start production of the M&S and H&M trendy collections from this September.
The World Digital Mining Summit to be held in Georgia
The summit is scheduled to take place between 21st-23rd September in the Hualing Hotel, Tbilisi, Georgia.
Galt and Taggart - Tourism Boom Continues in Georgia
Tourism has become one of the key drivers for the Georgian economy. Galt and Taggart has recently published research about the Georgian tourism sector in the first half of 2018.
"The worst dream for Putin is that Russians want to live in Georgia"
This year, visitors to the Adjara region would notice that there is a boom in construction in and around Batumi.
Underground gas storage facility to be built in Georgia
KfW, a German government-owned development bank signed a EUR 150 million promotional loan with the state-owned Georgian Oil and Gas Corporation (GOGC) for the construction of the first underground gas storage facility in Georgia.
New gambling rules for Georgia
Georgian lawmakers are preparing a new draft law relating to online-casinos and gambling that will seek to curb gambling addiction in Georgia.
How expensive is it to visit Georgia?
The Georgian Lari (GEL) is the official currency of Georgia and is the only legal means of payment in the entire territory of Georgia.
Trade with the EU and the Commonwealth of Independent States (CIS) has grown significantly
Trade with the EU and the CIS has grown by 26% and 33.5 % respectively, says GeoStat, the Georgian National Statistics Office.
The unemployment rate decreases in Georgia
The unemployment rate decreased in Georgia by 1,9% and amounted to 12.1% in the 2nd quarter of 2018 compared with the previous quarter,
Memorandum of Understanding to be signed between Georgia and Malaysia
According to the Georgian Ambassador to Malaysia Nikoloz Apkhazava, Georgia plans to sign a Memorandum of Understanding (MoU) with Malaysia.
“Blauenstein Georgia” due to expand in Georgia
“Blauenstein Georgia” is planning to open more shops in Georgia. It is an agriculture company that sells meat products, meat and convenience food.
The amount of Direct Foreign Investment rises in Georgia
According to the information of the National Statistics Office of Georgia, the amount of direct foreign investment in Georgia has risen
It’s going to get  harder for foreigners to get residence permit in Georgia
It’s going to get harder for foreigners to get permit of residence in Georgia.
PHOTO OF THE DAY
Exchange Rates
GEL Exchange Rate
Convertor
07.11.2018
08.11.2018
USD
1
USD
2.7524
2.7656
EUR
1
EUR
3.1386
3.1766
GBP
1
GBP
3.5864
3.6390
RUB
100
RUB
4.1712
4.1953
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
USD
1
USD
2.7524
EUR
1
EUR
3.1386
GBP
1
GBP
3.5864
RUB
100
RUB
4.1712
November 2018
Mon Tue Wed Thu Fri Sat Sun
1 2 3 4
5 6 7 8 9 10 11
12 13 14 15 16 17 18
19 20 21 22 23 24 25
26 27 28 29 30