Georgia - Telecoms, Mobile, Broadband and Forecasts

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have become increasingly important for Georgia since the fixed-line networks in many parts of the country remained outdated (particularly in rural and remote areas) and the mobile network represented the only means of communication, especially as mobile coverage has now been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.

Market highlights:

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
(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 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.

1. Executive summary
2. Key statistics
3. Country overview
3.1 Background
3.2 Economy
4. Telecommunications market
4.1 Overview of Georgia's telecom market
4.2 Forecasts
5. Regulatory environment
5.1 Regulatory authority
5.1.1 The Georgian National Communications Commission (GNCC)
5.2 Privatisation
5.3 Regulatory developments
5.3.1 Mobile Number Portability (MNP)
5.3.2 Georgia's membership of regional regulatory association
5.3.3 Changes made to numbering
5.3.4 Subscriber number portability (SNP)
5.3.5 Cooperation with Azerbaijan
5.3.6 Licensing and auctions background information
5.3.7 Illegal operations
5.3.8 Restrictions on internet access
5.3.9 Colocation areas
5.3.10 Satellite broadcasting
6. Fixed network operators in Georgia
6.1 United Telecom (formerly Sakartvelos Elektrokavshiri)
6.2 Telecom Georgia (Sakartvelos Telekomi)
6.3 NewNet Telecommunications (Akhali Kselebi Ltd)
6.4 Egrisi
6.5 Georgian Railway Telecom (GRT)
7. Telecommunications Infrastructure
7.1 National telecom network
7.1.1 Wireless local loop (WLL)
7.2 Forecasts fixed-line subscribers 2015; 2020
7.3 International infrastructure
8. Internet market
8.1 Overview
8.2 Internet statistics
8.3 Forecasts internet subscribers 2015; 2020
8.4 August 2008 conflict and possible cyber warfare
8.5 ISP market
8.5.1 Overview
8.5.2 Internet service providers
9. Broadband market
9.1 Overview
9.1.1 Broadband performance
9.1.2 Broadband statistics
9.2 WiMAX
9.2.1 Warid Telecom Georgia
9.2.2 VTel Georgia
9.2.3 MagtiCom
9.3 Mobile broadband
10. Mobile communications
10.1 Overview of Georgia's mobile market
10.2 Mobile statistics
10.3 Forecasts mobile subscribers 2015; 2020
10.4 Regulatory issues in the mobile market
10.4.1 Georgia's unrecognised operators
10.4.2 Regulatory fines
10.4.3 Frequency auctions
10.5 Third Generation (3G) mobile
10.5.1 Background and licensing
10.5.2 3G mobile statistics
10.6 4G / Long Term Evolution (LTE)
11. Major mobile operators
11.1 Overview
11.2 Geocell
11.3 MagtiCom
11.4 Mobitel (Beeline)
12. Broadcasting market
12.1 Overview
13. Notes on forecasting
14. Related reports
Table 1 Country statistics Georgia 2014
Table 2 Telecom revenue and investment statistics 2011
Table 3 Telephone network statistics 2013
Table 4 Internet user statistics 2013
Table 5 Mobile statistics 2013
Table 6 National telecommunications authority
Table 7 Georgia's GDP real growth rate 2006 - 2015
Table 8 - Georgia Key telecom parameters 2012 2014
Table 9 Mobile number portability - transactions 2011 - 2013
Table 10 Ported numbers gains v. losses - by operator January 2013
Table 11 Historic - Fixed lines in service, annual change and penetration 1995 - 2004
Table 12 Fixed lines in service, annual change and penetration 2005 - 2015
Table 13 Fixed subscribers by technology type March 2013
Table 14 Forecast fixed line subscribers 2015; 2020
Table 15 Historic - Internet users and penetration rate 1996 - 2004
Table 16 Internet users and penetration rate 2005 - 2014
Table 17 Fixed-line internet subscribers and penetration 2001 - 2015
Table 18 Fixed-line broadband subscribers 2001 - 2015
Table 19 Household internet penetration 2005 - 2014
Table 20 Internet bandwidth capacity 2001 - 2013
Table 21 Forecast fixed internet subscribers 2015; 2020
Table 22 Fixed broadband subscribers 2001 - 2013
Table 23 Fixed broadband subscribers by technology type March 2013
Table 24 Fixed broadband subscribers and households 2013
Table 25 DSL subscribers 2008 - 2013
Table 26 FttH subscribers 2010 2013
Table 27 WiMAX subscribers 2010 2013
Table 28 Active mobile broadband subscribers and penetration 2010 - 2015
Table 29 Mobile subscribers and penetration rate 1999 - 2014
Table 30 Mobile subscribers and penetration rate 2005 - 2015
Table 31 Mobile operators, subscribers and annual change 2013
Table 32 Mobile operators subscribers and market share 2013
Table 33 Forecast mobile subscribers 2015; 2020
Table 34 3G mobile subscribers and market share 2008 - 2012
Table 35 3G mobile operators and subscribers 2009
Table 36 Geocell subscribers 2002 - 2012
Table 37 MagtiCom subscribers 2007 - 2013
Table 38 Mobitel total mobile subscribers 2007 - 2013
Table 39 Mobitel mobile broadband subscribers 2011 - 2013
Table 40 Mobitel blended ARPU 2009 - 2013
Table 41 Key broadcasting statistics 2013
Chart 1 - Georgias GDP real growth rate - 2006 2015
Chart 2 - Key telecom parameters - 2012 2014
Chart 3 - Fixed lines in service, annual change and penetration - 2005 2015
Chart 4 - Fixed subscribers by technology type - March 2013
Chart 5 Fixed and mobile subscribers in Georgia 2000 - 2014
Chart 6 - Internet users, annual change and penetration rate - 2005 2014
Chart 7 - Fixed broadband subscribers - 2006 2013
Chart 8 - Mobile subscribers and penetration rate - 2005 2015
Chart 9 Mobile operators market share 2013
Chart 10 - 3G mobile subscribers market share - 2008 2012
Exhibit 1 GNCC's definition of colocation'
Exhibit 2 United Telecom's Tbilisi network infrastructure

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