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Georgia's Electronic Communications Market in 2011
Civil Georgia, Tbilisi / 3 Jun.'12 / 22:02

Revenues in Georgia's electronic communications sector was GEL 952 million in 2011, down from GEL 1.055 billion a year earlier and broadcasters' revenues increasing to GEL 88.22 million in 2011, according to draft of annual report by Georgian National Communications Commission (GNCC).

Broadcasters

Total revenues of broadcasters increased 17% year-on-year, reaching GEL 88.22 million in 2011. Unlike previous reports, the new one does not provide a breakdown of revenues separately for televisions and radio stations.

Advertisement was the main source of revenue for broadcasters reaching GEL 60.69 million in 2011, up from GEL 57.69 million in 2010. How this amount was divided between TV and radio is not provided in GNCC’s recent report; but according to previous report, in 2010 up to 93.4% of GEL 57.69 million ad revenues went to TV broadcasters with radio stations receiving 6.6%.

Other sources of revenue for broadcasters in 2011 were sponsorship with 12.6% share and donations making only 1.2%. 16.7% of revenues were received by broadcasters from sources like rental fees, classified ads, providing various services and airing paid TV programs, according to GNCC report.

Cable Operators

Number of subscribers to cable networks (some of them started providing IPTV services), which carry television channels to households, increased from 135,369 in early 2011 to 171,641 by end-2011 with revenues of cable operator companies increasing to GEL 21.8 million.

There are many small cable operators across the country, but three companies take the largest share of the market – Silknet with 43,027 subscribers as of end-2011, followed by Super TV (formerly Ayety TV) and GNN (operating mainly in Saburtalo district of Tbilisi) with 37,936 and 19,140 subscribers, respectively, according to GNCC report.

Mobile Phone Operators

Number of mobile phone subscriptions in Georgia grew from 3.98 million in end-2010 to 4.43 million by the end of 2011 with penetration rate increasing from 89.7% to 99.1% in the same period, according to the report.

Number of mobile phone subscribers is defined by number of active SIM cards.

According to GNCC’s report in the last quarter of 2011 mobile phone operator company Geocell was the leader with 41.7% market share, followed by MagtiCom – 37.9% and Beeline –20.4%.

Silknet, part of the Silk Road Group, Georgian conglomerate with business interests in transportation, telecommunications, banking and property development, entered the market in December, 2011 and by the year’s end it had 1,782 mobile phone subscribers.

In February, 2011 Georgia launched mobile number portability, allowing users to retain their number even if they switch operators.

According to GNCC report, Geocell was the biggest winner from portability in 2011 with net gain of 12,079 subscriptions, followed by Beeline – 3,435. MagtiCom saw net loss of 15,517 subscriptions as a result of mobile number portability last year, according to the report.

Mobile operators’ retail revenues decreased to GEL 441 million in 2011 from GEL 532 million a year earlier (excluding value added tax and excise tax). Average revenue per user also declined from about GEL 10.15 per month in last quarter of 2010 to about GEL 8-9 in 2011. Decline is attributed to trend of reducing services fees because of “significant increase in competition” between the mobile phone operators, according to the report.

Last year Georgians continued to increase their consumption of mobile phone services with outgoing traffic increasing 58% y/y to 5.2 billion minutes.

Internet was accessed from 1.2 million SIM cards by the end of 2011, a 50% increase over the previous year, according to the report.
 
Internet

Number of subscribers to internet service (among them DSL, fiber optic, EVDO, WiMax, WiFi, CDMA 1x and dial-up technologies) providers increased from 307,277 in 2010 to 403,370 in 2011, according to figures available in GNCC report.

DSL remains the most common technology for Internet access across Georgia (204,074 subscribers with half of them in capital Tbilisi; in Batumi and Kutaisi 10% each and Rustavi – 4%), followed by fiber (125,686 – now available only in Tbilisi and Rustavi).

Silknet is a leader with number of subscribers to its DSL technology with 76% market share, followed by Akhali Kselebi (New Lines) – 11%. Caucasus Online has most of the subscribers to fiber internet connection service with 76% of market share, followed by Silknet – 15%.

Fixed Phone Line

For the first time number of wireless fixed phone line subscribers surpassed those of subscribed to hard-wired telephones with 731,637 to 590,845.

MagtiCom is a leader in wireless segment further increasing its market share to 90.9% in 2011 with Silknet having 8.9%, according to the report. The latter, however, is a market leader in hard-wired segment with 62.7%, followed by Akhali Kselebi – 20%; Akhteli – 11.5% and Central Georgian Communications Co. Ltd – 4%.

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