Free time offered as part of internet dispute

United Telecom Georgia (UTG) has given a week’s free time to Georgia’s biggest internet provider, Caucasus Online, to help it cover arrears it owes, or at least help start negotiations about this issue.

United Telecom Georgia says that Caucasus Online is obliged to repay about GEL 3 million it once borrowed from UTG to develop its channels and apparatus. United Telecom is threatening that if Caucasus Online doesn’t cover this amount, it will not be allowed to use UTG portals, and thus be severely restricted in its service. A spokesperson for Caucasus Online, Eka Machitidze, has told The Messenger however that official documents alleging these debts were received only on October 10. “We cannot deny that Caucasus Online owes United Telecom some money, but the amount we owe is eight times less than UTG is demanding,” Machitidze added.

Caucasus Online has asked for a special document to be drawn up between the two companies, with the involvement of Government ministers. It says that it will pay the sum actually owed when this document is signed, implying that if the companies sit down together with ministerial input all parties will agree that Caucasus Online’s version of the sum owed is correct.

Caucasus Online is a merger of three internet providers, Caucasus Network, Sanet and Georgia Online. These three market leaders united under the common name in 2006 and the merged company now serves the overwhelming majority, about 90%, of the country’s internet subscribers. United Telecom is the leading provider of the telecommunication services in Georgia, providing a telephone network, backbone network and underground communication facilities.

The relation between UTG and all Georgian internet providers has been strained since June 2005, when United Telecom announced out of the blue that it would offer its own internet service. UTG also demanded that the internet providers pay a higher monthly fee for using UTG facilities to offer their internet services. The companies that later united as Caucasus Online, irritated by this demand, refused to pay the higher fee and began a protest campaign against it. Eventually the fee increase was rescinded but the disagreement between the companies has remained.

Caucasus Online is about to complete a new FTTH (fibre to the home) project called Gelink, which involves an optical connection to the internet. Machitidze doubts that United Telecom is asking for money because it is offended by this innovation, as Gelink is an absolutely new system which doesn’t depend on the telephone line of a provider.