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Georgia - Telecoms, Mobile, Broadband and Forecasts

Attention: There is an updated edition available for this report.

The Georgia - Telecoms, Mobile, Broadband and Forecasts report includes all BuddeComm research data and analysis on this country. Covering trends and developments in telecommunications, mobile, internet, broadband, infrastructure and regulation.

Although the 2008 ‘war’ was a major setback and serious tensions with Russia remain, Georgia continues to grow with its strong telecom sector a special feature.

As Georgia worked to rebuild both its economy and its society after the collapse of the Soviet Union, the appalling state of its telecommunications infrastructure hindered the rebuilding process. Post-communism, the much needed upgrades and development of the state-owned telecom networks did not take place, keeping telephone penetration low for a decade or so.

As the overall Georgian economy became healthier, not surprisingly, so too did the country’s telecom sector. With rising telecom revenues, there was a corresponding and significant increase in investment in infrastructure. Notably, the share of telecommunications in the country’s GDP had reached 6.1% by 2005, this compared with 3.7% in 2000. Between 2000 and 2004, total investments in the telecom sector amounted to approximately US$383 million.

The mobile segment of the market in particular has been booming. In the five years to end-2009, mobile penetration in the country had increased around fivefold to reach 91%. MagtiCom was awarded Georgia’s first 3G licence in 2005. Then, in a significant move in 2006, the regulator awarded another 3G licence, followed by a third later in the same year.

The year 2003 proved to be a political turning point for Georgia with the so-called Rose Revolution seeing a reforming administration take control of government; at the same time, the influence of the telecom sector on the potential development of the country’s other economic sectors was starting to increase dramatically. Since 2003, telecommunications has become one of the fastest growing sectors in the Georgian economy.

In its annual report published in July 2008 the Georgian National Communications Commission (GNCC), the country’s telecom regulator, noted that sales in the country’s electronic communications market (telecoms, TV and radio) had reached GEL1.1 billion (US$784 million) in 2007, up 10% year-on-year. The sector accounted for 6.6% of Georgia’s total GDP, down from 7.5% in 2006. Mobile operators earned 63.3% of overall telecom service revenues, ahead of fixed-line operators with 29.5% and TV and radio broadcasters with 7.2%.

This had been the pattern for some time. In 2004, the telecom market share had been dominated by the mobile operators (63%), followed by local operators (19%), international operators (8%), radio and TV companies (5%) and Internet service providers (4%). Between 2002 and 2004, total revenues of local operators increased by 75.6%; international operators by 68.8%; mobile phone operators by 153.4%; Internet providers by 231.1% and radio and TV operators 84.4%.

Mobile communication systems have become increasingly important for Georgia since the fixed-line networks in many places (particularly in rural and remote areas) remained outdated and a mobile phone represented the only means of communication, especially as mobile coverage has been provided for virtually the whole of Georgia.

There is evidence of a high level of Internet usage in Georgia with an estimated user penetration of just over 30% by end-2009. However, Internet subscriptions are badly lagging behind the user numbers; the ratio of Internet users to Internet subscribers was around 8 to 1 into 2010. At the same time, fixed broadband Internet has achieved a considerable market presence, comprising some 90% of all Internet subscriptions.

Positive regulatory developments in the country have included the establishment of an independent regulator for the telecom sector in 2000 and the ongoing privatisation of fixed-line operators, Sakartvelos Telekomi and Sakartvelos Elektrokavshiri. Competition had arrived for all segments of the telecoms market, including fixed-line voice services. Georgia had more than 270 licensed and operational service providers and network operators.

Market highlights:

Coming into 2010 mobile penetration in Georgia had moved past 91%, having increased more than fivefold over the previous 5 years;
Despite a faltering economy, the mobile market has continued to grow at an annual rate of close to 20%;
Georgia’s telecom regulator having awarded three 3G mobile licences, by early 2010 two of the operators, Geocell and MagtiCom, were claiming a total of one million 3G subscribers between them;
3G subscribers had claimed 25% of the total mobile subscriber base in just a few years; The development of the fixed-line network in Georgia has effectively stalled, with zero growth and a system that is still well short of 100% digital target;
Although the interest in Internet in Georgia is high, this segment of the market also continues to lag in terms of subscriptions;
With Internet user penetration running at around 30% by early 2010, subscriber penetration was below 4%;
Broadband Internet development has also been slow, but the good news was that broadband constitutes the bulk of the access subscriptions;
Georgia’s ongoing tension with its neighbour Russia is providing considerable uncertainty for the country and its future direction of its development;
In 2009 the World Bank ranked Georgia as the 15th easiest economy in the world in which to do business (up from 21st in 2008).Georgia - key telecom parameters - 2009 - 2010 Category20092010 (e)

Fixed-line services:
Total number of subscribers620,000650,000
Annual growth1%5%
Fixed-line penetration (population)14%15%

Total number of subscribers176,500240,000
Annual growth77%36%
Internet subscriber penetration (population)4%5%

Mobile services:
Total number of subscribers (million)3.94.5
Annual growth19%15%
Mobile penetration (population)91%100%
(Source: BuddeComm)

This report provides an overview of the trends and developments in the telecommunications markets in Georgia. Subjects covered include:

Key statistics;

Market and industry overviews;
Major operators (mobile and fixed) Regulatory environment;
Mobile market;
Internet market, including broadband;
Telecom market subscriber forecasts for selective years to 2018.

  • Executive summary
    • Table Georgia - key telecom parameters - 2009 - 2010
  • Key statistics
    • Table Country statistics Georgia - 2009
    • Table Telecom revenue and investment statistics - 2007
    • Table Telephone network statistics - 2009
    • Table Internet user statistics - 2009
    • Table Mobile statistics - 2009
    • Table National telecommunications authority
    • Country overview
  • Telecommunications market
    • Overview of Georgia's telecom market
  • Regulatory environment
    • Regulatory authority
      • The Georgian National Communications Commission (GNCC)
    • Privatisation
    • Regulatory developments
      • Subscriber Number Portability
      • Cooperation with Azerbaijan
      • Licensing and auctions
      • Illegal operations
      • Restrictions on Internet access
      • Collocation areas
  • Fixed network operators in Georgia
    • United Telecom (formerly Sakartvelos Elektrokavshiri)
    • NewNet Telecommunications (Akhali Kselebi Ltd)
    • Telecom Georgia (Sakartvelos Telekomi)
    • Egrisi
    • Georgian Railway Telecom
  • Telecommunications infrastructure
    • National telecom network
      • Table Fixed lines in service and teledensity - 1995 - 2011
      • Table Fixed-line operators - subscribers and market share - 2008
      • Wireless Local Loop (WLL)
    • International infrastructure
  • Internet market
    • Overview
      • Table Internet users and penetration rate - 1996 - 2011
      • Table Internet subscribers - 2001 - 2011
      • Table Internet bandwidth capacity - 2001 - 2009
    • August 2008 conflict and possible cyber warfare
    • ISP market
      • Georgia Online
      • Caucasus Online
      • SaNet
  • Broadband market
    • Overview
      • Table Broadband subscribers - 2001 - 2010
    • WiMAX
      • Warid Telecom Georgia
      • VTel Georgia
      • MagtiCom
  • Mobile communications
    • Overview of Georgia's mobile market
      • Table Mobile subscribers and penetration rate - 1995 - 2011
      • Table Mobile operators, subscribers and annual change - 2009
      • Table Mobile operators - subscribers and market share - 2009
      • Impact of the conflict with Russia
    • Regulatory issues
      • Third Generation (3G) mobile
      • Spectrum auctions
      • 3G network launches
        • Table 3G mobile subscribers and market share - 2008 - 2010
        • Table 3G mobile operators and subscribers - 2009
    • Major mobile operators
      • Geocell
      • MagtiCom
      • Mobitel
      • Aquafon
  • Forecasts
    • Overview
    • Forecasts - fixed-line market - 2015; 2020
      • Table Forecast fixed line subscribers - 2015; 2020
    • Forecasts - Internet services - 2015; 2020
      • Table Forecast Internet subscribers - 2015; 2020
    • Forecasts - mobile market - 2015; 2020
      • Table Forecast mobile subscribers - 2015; 2020
    • Notes on forecasting

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