No Fear in Beeline-Caucasus Online Case, Say Authorities

At the beginning of the year it was announced that Beeline would acquire a part of Caucasus Online, resulting in concern among the general population. The companies have since confirmed that there are no talks about one company’s complete absorption by another. Recently, Prime Minister of Georgia, Giorgi Kvirikashvili, also commented on the situation regarding the future of the two companies.

While at the Davos World Economic Forum, the Georgian Prime Minister stated that he does not see any misgivings in Beeline’s future acquisition of part of Caucasus Online. “That does not refer to the selling of the backbone infrastructure; Caucasus Online is going to sell only its domestic distribution network. I am sure that the process will be maximally transparent and in the near future the issue will be resolved,” said PM Kvirikashvili.

Russian mobile operator Beeline and Georgian internet provider Caucasus Online filed a joint application to the Georgian National Communications Commission (GNCC) on November 15, 2015, according to which Beeline became the provider of cable television, the Internet and the telephone network by Caucasus Online. Beeline, which has operated in Georgia since 2007 and became one of the leaders on the market, aims to expand their service and quality of service following the sale. However, Caucasus Online will remain the backbone network, including the owner of the Black Sea binder fiber-cell cable, which cannot be sold.

The GNCC began administrative proceedings on the issue on January 5, 2016 and the first hearing will take place on February 9.

Both companies are obliged to provide all necessary documents and clearly indicate their goals this month, after which the GNCC will examine possible changes following the transaction and whether any risks exist to the competitive environment. According to the law, the case could be under review for three months.

The GNCC do not exclude that the final decision will be announced on February 9. However, in case of a positive reply, the companies will have to continue negotiations with each other.

In the past, Silknet and MagtiCom were also interested in purchasing assets of Caucasus Online.

Eka Karsaulidze