Cell operators vs. Media Pro
24 February, 2011
Cell operators vs. Media Pro

Cell companies who used to enjoy unfairly high retail tariffs for at least ten years, sue the portable numbers operator for unfair charging system imposed on cell operators for number porting service.
Portable number system became operational in Georgia for cell operators starting February 15, 2010 to cut retail tariffs down, improve service and boost fair competition.
According to Georgian National Communication Commission, (GNCC), portable number system installation requires a pretty EUR 5 million at the first phase but the

cost is supposed to wane gradually as the demand for portable numbers hits its peak during the first year of introduction of new system and slumps almost five-fold later as the European practice shows.
To cover expenses portable operator Media Pro, that won the tender last year, charges cell operators by 38 eurocent per cell number they have irrespective whether or not they are active.
All the three cell operators assure introduction of portable number is a positive move and wait for inflow of new subscribers thanks to new preferential tariff products they have already offered the market. According to Sandro Sadaghashvili, Head of Legal department at Geocell, portable numbers are in great demand, more than thousands appealed for Geocell service and only 300 quit within a week since the system started operation. Magti and Beeline, a Russian-based Mobitel branded company, also assure demand for their service is big but did not disclose exact figures.
However cell operators disprove the porting tariff imposed by Media Pro as not expense-oriented. Besides they hate the charging system covering all numbers and suggest charging ported numbers alone will be fairer.
It is an open secret that cell operators reserve number bands to insure broader choice for their consumer.  Geocell and Magti, the key cell market players redistributing the subscribers market by 46% and 42% respectively have about 10-10 million numbers apiece [based on GNCC source] while only  about 1.2-1.5 million is in actual use. Now to keep spare numbers they have to pay roughly EUR 3- 4 million per year to Media Pro.
GNCC advises companies to return spare numbers to escape extra payments and promises to make numbers available later free of charge without tenders and auctions.
To escape extra payments Beeline [that takes the remaining 13% of subscribers market] has already returned 3.7 million numbers out of the previously owned 5 million to the GNCC. It now runs only active numbers making 1.3 million and is supposed to pay about EUR 500 thousand commensurately this year.
Magti and Geocell do not hurry. According to Sadaghashvili, Geocell does not rule out to return numbers but only after the GNCC provides with detailed rules on number return and delivery that lacks clarification at the moment. Magti expects the court to settle the issue.
The thing is Magti and Geocell have already raised a lawsuit against Media Pro to scrutinize whether or not the 38 eurocent tariff rate is well-reasoned, and to charge porting numbers alone. 
Beeline prefers to negotiate with GNCC to make Media Pro go on the required concessions. According to Khatia Kurashvili, GNCC spokesperson, representatives of all companies including cell operators and fixed lines, were in the tender commission that chose Media Pro for the service terms it proposed.
“Media Pro proposed either to  pay the entire EUR 5 million at once or to redistribute it through 38 eurocent tariffs and companies chose the latter,” she told Georgian Journal.
Magti says there was no talk of 38 eurocent when this issue was under vision and these details were disclosed later. Sadaghashvili of Geocell says the tender was held within too restricted deadlines, things were too hastened because cell operators had only 6 months to adopt portable number system actually [when in other countries at least 18 months are given for that] and they could not solve all issues.
“The law stipulates that the tariff must be oriented on financial expenses and be transparent, but when we asked Media Pro to provide with financial calculations backing the tariff they had no calculations. “We do not know what expenses it consists of as yet,” they said.  This is a tariff copied from other countries in fact,” Sadaghashvili said.

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