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Georgia's Electronic Communications Market in 2010
Civil Georgia, Tbilisi / 11 Aug.'11 / 23:53

  • TV ad market GEL 53.85 mln in 2010;
  • More bandwidth, less revenue in mobile networks;
  • 789,000 mobile web users;
  • 300,050 fixed internet subscribers;
  • New leader on internet market;
  • Wireless fixed line phone expanding;

Revenues in Georgia's electronic communications sector was GEL 1.055 billion and broadcasters' revenues totaling GEL 76.25 million in 2010, Georgian National Communications Commission (GNCC) said in its annual report released earlier this month.

The report, which provides an overview of the country's communications market in 2010, does not give a comparison of key trends in the sector over the previous year. GNCC cited change of methodology in drawing up the new report, saying that because of those changes it would be irrelevant to make comparisons. 
 
The Commission said in an email to Civil.ge, that unlike its previous reports the recent one had been compiled in line with International Telecommunication Union (ITU) standards. One of the changes, among others, is excluding value added tax from revenue figures. 

Broadcast Media

Total revenue of broadcast media was GEL 76.25 million in 2010 with televisions making lions share of GEL 69.27 million and radio stations - GEL 6.98 million, according to the GNCC report.

Advertisement was the main source of revenue for broadcast media with TV ad market reaching GEL 53.85 million and radio ad revenues - GEL 3.84 million.

Ad revenues peaked in second quarter of 2010 for the television stations reaching GEL 20.5 million, probably caused by the local elections in May. Prices on political TV ads ahead of elections usually are increasing ten-fold on the two most-watched nationwide broadcasters Rustavi 2 and Imedi TV.

TV stations received GEL 4.4 million from sponsorship; radio stations had GEL 1.9 million from sponsorship and GEL 935,625 from donations in 2010, according to the GNCC report.

Mobile: Geocell Market Leader; More Bandwidth, Less Revenue

Number of mobile phone users grew from 3.6 million in the first quarter of 2010 to 3.98 million by end of 2010 with the penetration rate reaching 89.7%, according to the report. Number of mobile phone subscribers is defined by number of active SIM cards.

As of end-2010, Geocell was the leader with 44.3% of market share, followed by Magti with 40.3%; Russia’s VimpelCom, which entered the Georgian market in 2007 under the Beeline brand name, has increased its market share from less than 13% in early 2010 to 15.4% by the year's end.

Revenues for providing mobile phone services continued to drop in 2010 for second year in row with mobile operators’ retail revenues amounting to GEL 532 million. The report says, that revenues "declined significantly" in the fourth quarter of 2010 mainly attributed to introduction of a new excise tax for telephone communication services starting from last September.

Geocell leads in revenues too with GEL 245.28 million; followed by Magti - GEL  227.68 million and Beeline - GEL 58,85 million.

The report found that Georgians continued to increase their consumption of mobile phone services with outgoing traffic increasing 38% by the year's end against the first quarter of 2010. Geocell clients spoke more on their cell phones than subscribers of two other mobile phone operator companies.

Mobile Web

789,000 cell phone owners accessed internet from their mobile devices in the fourth quarter of 2010. Total revenue from mobile web usage reached GEL 15 million.

Magti clients were the most active mobile web users with company receiving GEL 8.9 million revenue in 2010, followed by Geocell - GEL 5.1 million and Beeline - GEL 1 million.

Fixed Internet

Number of fixed internet users increased from 238,000 in the first quarter of 2010 to 300,050 by the year's end with total revenue of the sector making GEL 80.2 million.

The figure is calculated based on number of subscribers to this service, but it is a widespread practice in Georgia when, for example a single subscription to DSL service is shared by several households.

90% of fixed internet subscribers (excluding users of CDMA/EVDO technologies) were concentrated in five largest cities: Tbilisi (176,675 subscribers), followed by Batumi (15,882); Kutaisi (Georgia's second largest city; 12,574 subscribers); Rustavi (10,873) and Poti (3,917).
 
Silknet, part of the Silk Road Group, Georgian conglomerate with business interests in transportation, telecommunications, banking and property development, has become the internet market leader with 42.6% of market share.

Caucasus Online, once a near-monopoly of the Georgian internet market, now has 31.1% of market share, followed by Magti with 14.5% and Akhali Kselebi (New Lines) with 4.7%; the rest is divided between other 26 internet providers, according to GNCC report.

Caucasus Online, however, led in terms of revenues in 2010 receiving total of GEL 32.18 million, followed by Silknet - GEL 30.14 million; Magti - GEL 5.9 million; Akhali Kselebi - GEL 4 million.

Fixed Phone Line

Users of fixed phone line, both hard-wired and wireless, increased to 1.1 million with the increase mainly coming at the expense of growth in wireless fixed line phone users. The total revenue of the sector reached GEL 121.8 million in 2010.

Silknet is a market leader in hard-wired segment with 61.83%, followed by Akhali Kselebi (New Lines) (19.6%)

Magti leads in the wireless segment with 87% of market share, followed by Silknet.

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