Georgia - Telecoms, Mobile, Broadband and Forecasts
Georgia's mobile broadband sector growth supported by late-2014 spectrum award for LTE services
Georgia is continuing to build itself into a modern economy while at the same time it confronts a series of major challenges. One of the biggest problems is the troubled times it has been having with its neighbour Russia. The country has also had to cope with the severe setback suffered in 2009 following the onset of the Global Financial Crisis. With the overall economy progressively becoming healthier again, it is not surprising that the country's telecom sector has rebounded. At the same time, rising telecom revenues have seen a corresponding and significant increase in investment in infrastructure. Despite obvious and ongoing positive news for the telecom sector, there remains much to be done.
The year 2003 proved to be both a political and economic 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. The share of telecommunications in the country's GDP had reached around 7%, a significant increase over levels achieved in the not too distant past.
The mobile segment of the market in particular has been booming. Coming into 2014, mobile penetration had reached 120%, subscriber penetration having increased tenfold in nine years since 2003. Georgia awarded three 3G licences in 2005/2006. Mobile communication systems have become increasingly important for Georgia since the fixed-line networks in many parts of the country remained outdated (particularly in rural and remote areas) and the mobile network represented the only means of communication, especially as mobile coverage has now been provided for virtually the whole of Georgia.
An encouraging feature of the telecom market in Georgia is the high level of internet usage; there was an estimated user penetration of over 50% into 2014. However, internet subscriptions have been lagging somewhat behind the user numbers in relative terms. Nevertheless the gap is being bridged quickly, with fixed broadband internet having achieved considerable market presence in the last few years. Broadband comprises some 85% of all fixed internet subscriptions.
Even before the Rose Revolution in 2003 and the reforms that took place following that, positive regulatory developments had already commenced. These reforms included the establishment of an independent telecom regulator, the Georgian National Communications Commission (GNCC) in 2000. Although the privatisation of fixed-line operators Sakartvelos Telekomi and Sakartvelos Elektrokavshiri was commenced in 2001, the process suffered multiple delays. Sakartvelos Elektrokavshiri was finally privatised in 2006, having changed its name to United Telecom. Sakartvelos Telekomi was also eventually privatised changing its name to Georgia Telecom. Competition had arrived for all segments of the telecoms market, including for fixed-line voice services. Georgia has more than 320 licensed and operational service providers and network operators.
In the meantime Georgia's ongoing tension with Russia continues to provide a level of uncertainty for the country and the future direction of its social and economic development. Despite this the economic outlook continues to be positive. In a telling report considering the timing, the World Bank ranked Georgia in 2009 as the 15th easiest economy in the world in which to do business (up from 21st in 2008). By 2013 the country had improved even further, holding 8th place in that year's World Bank survey.
By early 2015 mobile penetration in Georgia had approached 128%, subscriber penetration having increased tenfold over the previous nine years;
Despite signs of a faltering economy, the mobile market continues to grow, although the annual rate of growth has moderated and become more unpredictable;
Since Georgia's telecom regulator awarded three 3G mobile licences in 2005/2006 there has been a strong uptake of new generation subscriptions. The 3G subscriber base accounted for more than half of all mobile subscribers by early 2015;
The introduction by the regulator of mobile number portability seen a significant and increasing movement of subscribers in the market place in the first three years of operation;
Despite a somewhat erratic growth pattern, the fixed-line network in Georgia had reached a fixed teledensity of 24% in early 2014; however this was down from 31% in mid-2012;
Although the interest in internet in Georgia is clearly high, subscription numbers remain modest;
With internet user penetration running at an estimated 50% by end-2013, fixed internet subscriber penetration was a relatively low 11%;
Mobile broadband offers an effective means of accessing the internet. The auction of spectrum to Mobitel in December 2014 obliges the operator to provide 90% population coverage with mobile broadband services by 2020.
Georgia Key telecom parameters 2012 - 2014
Category | 2012 | 2013 (e) | 2014 (e)
Total number of fixed-line subscribers | 1,276,000 | 1,100,000 | 1,100,000
Total number of fixed internet subscribers | 475,000 | 550,000 | 600,000
Total number of mobile subscribers (million) | 4.7 million | 5.3 million | 5.9 million
This report provides an overview of the trends and developments in the telecommunications markets in Georgia.
Subjects covered include:
Market and industry overviews;
Major operators (mobile and fixed);
Internet market, including broadband;
Telecom market subscriber scenario forecasts for years 2015 and 2020.
Data in this report is the latest available at the time of preparation and may not be for the current year.