The Communications Commission of Georgia (ComCom) talks about barriers to entry into the fixed internet market. As ComCom notes in its 2021 report, entering this market is problematic for small companies as it is associated with high investment expenditures and a long network development process.
The regulator notes that the barriers on the fixed internet market are caused due to the expansion of MagtiCom and Silknet, although at the time these transactions are approved by the Communications Commission.
Two important consolidations, when MagtiCom acquired Caucasus Online, while Silknet - Geocell, led to the formation of two large companies in the market. As a result, operators have significant market share and power in both mobile and fixed internet segments simultaneously.
"Therefore, both the wholesale and retail segments of the fixed Internet are characterized by high concentrations, which indicates the existence of structural or operational barriers to entry in the broadband internet services market," the Communications Commission reports.
Based on the above, the Communications Commission announces the opening of the market and intends to introduce Bitstream regulation. This means that large internet operators have to allow small operators on their own network and lease infrastructure. Small companies need to provide services to customers through this infrastructure.
"On the one hand, this allows relatively small operators to develop, create alternative offers for the fixed segment of the broadband Internet, and thus increase the volume of services in the economy.
On the other hand, it gives the customer the opportunity to choose and receive alternative services, which ultimately leads to the diversity and availability of services.
The customer will be able to receive the services of an alternative operator through the existing network infrastructure, while the network-owning operators will receive additional wholesale revenue,” said the Communications Commission.
