Between Damping Policy and Cartel Agreement
09 May, 2013
Between Damping Policy and Cartel Agreement
Express-pay terminals claim the damping policy practiced by Bank of Georgia (BOG), one of the leading Georgian banks, led the express-pay business to the brim of bankruptcy and ask Georgian Central Bank for help. Economic analysts believe not a bank but cartel agreement concluded by Georgian cell operators led fast-pay machines to bankruptcy.

The pay-boxes’ grievance started on April 1st, 2013 when all the three cell companies operating at Georgian market Magti, Geocell and Beeline stopped paying commissions for recharging
cell call balances through express-pay terminals or banking on-line payment system. This commission was paid by cell operators up to this past April to subsidize the developing express-pay system and raise awareness of consumers in alternative balance recharging tools, cell companies explain. And now since the said system is well-developed cell operators stop subsidizing and consumers have to pay commissions standing at 4% of the paid sum if they want instant recharging of their balances through express-pay terminals and on-line payments. Bank of Georgia (BOG) used this move as a marketing trump: it waived commissions and expanded its fast-paying machine system network including every bus-stop thus providing consumer with free-of-charge and available cell balance-recharging opportunities. As a result after a couple of weeks fast-pay machines complained they are put on the brim of bankruptcy and BOG is responsible for its marketing policy is nothing more than a damping policy aimed to oust weaker competitor off the market. Pay-box business appealed to National Bank of Georgia (NBG) for help. Economic analysts believe a cartel agreement stands behind the cell operators’ move and it is up to Georgian National Communication Commission (GNCC), the communication sector regulatory body, not to the NBG to research why all the three market players simultaneously made similar marketing move that indirectly made their service more expensive, for consumers pay more for cell calls in fact. GNCC assures the issue falls beyond its competence as it cannot interfere in the service payment conditions between companies [cell operators and express-pay business] and besides consumers can still enjoy free-of-charge recharging through cell companies’ web-pages, service centers and special balance-cards. Nevertheless economic analysts believe the free recharging opportunities are restricted for service-center networks and on-line services are underdeveloped specifically in regions. Besides, it is social responsibility of cell companies to charge consumer exactly for the service they use and not encumber them by extra commission burden.
“Did anybody prevent any other bank to do the same? Anything that does not break law and is done in favor to consumers is a good marketing move and nobody can accuse BOG for dexterously used chance,” Lia Eliava, a financial market analyst, elaborated. Nodar Chichinadze, Chairperson of Association of Young Financiers and Businessmen, wonders that neither of cell operators acted more consumer-orinted. “If there were a fair competition any of the companies might undertake say 2% of charge on themselves and not lay the 4% burden on consumer, but all made similar decision that bespeaks of cartel agreement,” he said.
NBG undertook the research to find out whether the fast-pay machines really face bankruptcy or the BOG’s marketing strategy is a dumping policy. However it also finds questionable that all three mobile operators at the same time had decided to change the policy which in reality meant the increase in the price of their services.
Other Stories
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.
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 Head Speaker List featuring Circle, and Genesis Mining when Digital Mining Leaders Convene In Tbilisi on September 21-23

Exchange Rates
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
January 2019
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 31