Concern over mobile tariffs in Georgia

On February 2 the Young Financers and Businessman Association (AFBA) announced the results of a study it has made into the Georgian cellular communication system. The study incorporated material from the Informa Telecoms and Media and World Development Indicators Database.

AFBA stated that Georgia has the third highest comparative mobile communications tariffs in the world's 186 countries and the highest among post-Soviet states. Such developed and democratic states as the United Kingdom, France, Japan, Canada and others have less expensive mobile tariffs. These figures are worked out on the basis of how much a special service package of 2,952 minutes, 600 SMS and 12 MMS, spread among different networks and fixed lines in the same proportion, costs. The price of this service in Georgia is USD 621, but in Denmark it is only 142 dollars. Based on the same data the prices of cellular communication services have fallen 21% overall in recent times but in Georgia they have remained stable.

AFBA suggests that one of the main reasons of this present unacceptable situation is the 'ineffectiveness' of the Georgian National Communications Commission (GNCC), which encourages the unjust tariff policies of cellphone companies rather than discouraging them. AFBA says that the GNCC is wholly financed by the giant companies on the Georgian cellular market and may well be frightened of acting against the companies in any way. From this it concludes that the cellular communication companies in Georgia make the decisions profitable for themselves, not their customers. Furthermore the activities of the mobile service providers are not transparent. At present there are three companies on the Georgian cellular market, Magticom with 46.5% of it, Geocell with 44% and Beeline with the remainder.

AFBA has appealed to President Saakashvili to address three main points. Firstly, the GNCC should conduct itself properly and try to eradicate such unjust mobile tariffs: in particular, it should end the practice of calls from mobiles to fixed lines being more expensive than the contrary. Secondly, mobile service providers should voluntarily abandon their unfair pricing structures, make their activities transparent and inform the public who their real founders and shareholders are. Thirdly, the GNCC should make the companies adopt flexible tariff policies, offering different tariffs for particular days and hours. AFBA says that if these steps are taken customers’ rights will be protected and prices will fall.

Georgian cellphone companies do not agree with the conclusions of the study and state that a reduction in tariffs is not expected. "Beeline subscribers can use 2, 5 and 9 tetri tariffs. Three years ago the company presented a tariff plan unique at that time in Georgia, which enabled subscribers to choose their relevant tariff in six different directions, like calls abroad, favourite number and so on. The study was based on the fixed tariff when it was done, 28 tetri, but tariffs have reduced recently so the research does not show the real picture. Beeline will not play a significant role in tariff regulation in the future, as it has only a 10 % market share,” Teona Baghdavadze, a Beeline representative has stated.

Magticom has said, "We are represented by two brands, Magti and Bali, and Bali’s tariffs are different from Magti’s, being significantly cheaper, so talking about fixed tariffs is very difficult because there are many kinds of discounts for customers. This study cannot be accurate as only one fixed tariff was taken into consideration. As for future tariffs, I can say that based on the significant growth in prices in many directions in Georgia over the past ten years the fixed tariff should be 60 tetri now, but the company is taking the Georgian people’s present conditions into consideration and keeping it at 28 tetri,” Magti representative Irakli Lobjanidze told the Georgian media.