Cell Service Tariff Indirectly Increased
25 April, 2013
Cell Service Tariff  Indirectly Increased
Cell service tariffs increased indirectly by about 4% after all three cell operators of Georgia stopped paying commissions to express-pay terminals and banks for prompt recharging of consumer’s balance.
Since April 1, 2013 subscribers of Magti, Geocell and Beeline, three cell companies operating in Georgia, have to pay commissions if they want to recharge their cell call balance instantly through express-pay terminals or banking on-line payment system. This commission was paid by cell operators up to this April to subsidize
the developing express-pay system and raise awareness of consumers in alternative balance recharging tools.
“But now we think the system is well-developed and we stop subsidizing it and consumer should pay the charge fixed by express-pay terminals if they want instant recharging of their balances,” Irma Tskitishvili, PR Manager of Geocell, said in the interview to Georgian Journal. Beeline agrees. Magti made no comment. But part of economic analysts think this unanimous decision of operators smells of the cartel agreement for all the three companies made similar decision simultaneously suggesting equal charging cap rate of 4%. This means that each express-pay terminal can define the commission rate independently within 4% however all express-pay terminals charge by the cap 4% that translates into 4 tetri per paid GEL1. Only two banks Bank of Georgia and Liberty Bank exempted clients from the charge. The remainder banks fixed 4%. Free of charge alternative recharging are also available at the cell operators service centers, through their web-pages and special cards. Nevertheless, economic analysts think the free of charge balance recharging opportunities are restricted for service-center networks and on-line service are underdeveloped specifically in regions. And the free of charge proposal of two banks may be a trick to attract clients for a while and then the service will become payable. As a result the tariff on cell calls is indirectly increased.
“The thing that all the three cell operators simultaneously took similar decision and sums paid for recharging balance is similar bespeaks of apparent cartel agreement,” Ditrikh Muller, a co-founder of Georgian Investment Group, said. “Where are the competition and fair market rules? Even one operator might have fixed different commissions say 2% if it is a fair game. At any rate this expense is up to the operator companies to cover, otherwise it is an indirect tariff-increase for consumer pays by 4% above the tariffs fixed for the service of cell operators and what for? This is a robbery.”
Nodar Chichinadze, Chairperson of Young Financiers and Businessmen, agrees. Irakli Lekvinadze, an economic analyst, finds nothing unusual that consumers pays for express-pay-terminals service inasmuch as cell operators find no more reasonable to pay 4% of their profit to cover these expenses. Chichinadze counters that the decision to lay express-pay service charge on consumers is unethical.
“Of course nobody can oblige cell operator to pay commissions but it is social responsibility of companies to make their service as available as possible. Now consumer pays more and gets less service,” he elaborates.
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