9 Companies Accuse Magti, Silknet of "Oligopoly Deal"

A number of Georgian companies operating in the telecommunications market released a statement regarding the "oligopoly agreement” between two telecommunication giants Silknet and Magticom.

The statement reads that parallel announcements made by the two companies about increasing the tariffs for their clients indicate that they made a deal in advance, aimed at “expelling small companies from the market.”

The statement reads that the radical tariff change will result in the closure of 30 small and medium companies and leave about 1,000 people unemployed.

“This agreement is aimed against the business. It is actually damaging for both subscribers and other operators operating on the market and represents a cartel deal among major players in the market. This agreement is a gross violation of the law that goes beyond fair and competitive business frames and puts at risk all other small and medium-sized telecommunication companies,” the statement reads.

Georgian companies have addressed the relevant committees: the Ministry of Economy and Sustainable Development, Office of Public Defender, the Competition Agency, Business Ombudsman and non-governmental organizations, asking for their interest in the case.

A week ago it was announced that the service tariff for subscribers of Geocell, Silknet, and Magticom will be increased. Magti’s renewed tariff will be launched from February 18, and Geocell and Silknet from March 1.

They say that they will offer better services and increased Internet volume to subscribers.

The Georgian National Communications Commission stated in response that there are no preconditions or grounds for increasing the tariff for telecommunication services to subscribers.

The Commission stated it was looking into the issue on the basis of the statement made by Magticom and Silknet.

By Thea Morrison