The FINANCIAL — The growing popularity of mobile phones and the internet is reducing the demand for fixed-line phones.
The FINANCIAL — The growing popularity of mobile phones and the internet is reducing the demand for fixed-line phones. Total retail revenue of fixed-line phones amounted to GEL 96.2 million, 12.2% (GEL 13.4 million) less than in the same period of last year. The demand for fixed-line phone service is presumably going to disappear completely some day but not at any time in the near future, industry professionals say.
“The growing trend of mobile phone and internet usage is reducing the demand for fixed-line phones,” Levan Injia, Deputy Director of the technological direction at Akhali Kselebi Ltd, told The FINANCIAL. “However, at this stage mobile phones and especially the internet, cannot fully replace landline phones. The development of an info telecommunication system supported the development of new technologies. Due to this internet telephones started gaining popularity on the market. However, classic or fixed-line phones remain one of the most reliable sources of communication in Georgia and world leading countries. For fixed-line phone services customers do not have to charge them with electricity,” said Injia.
Fixed-line phones work more stably, securely and reliably compared to other competing technologies, Injia believes. This was proven during military operations as well. “Therefore, we can say that currently the fixed-line network remains one of the most strategic directions of the country,” he said.
The number of fixed-line telephone subscribers in Georgia as of the end of 2012 (fourth quarter) totalled 1.28 million subscribers. This number is 4.5% less (60,000 subscribers) than it was in the same period of 2011.
The outgoing traffic of fixed-line phones totalled 2.6 billion minutes in 2012. Last year it was 3.11 billion seconds, 16.4% more.
The wired network mainly covers Georgia’s five largest cities: Tbilisi, Kutaisi, Rustavi, Batumi and Poti. These cities account for 82% of subscribers.
The report was provided by the Georgian National Communication Commission (GNCC).
At Akhali Kselebi Ltd, the number of fixed-line telephones amounted to 179,167 in 2013, down from 186,000 in 2012. The figure was 181,632 in 2010 and 183,403 in 2011.
Monthly payment amounts for service vary from GEL 3 to GEL 6. The cost per minute of service amounts to GEL 0.04 for local calls and GEL 0.06 for international calls. The USA (GEL 0.09), Germany (GEL 0.11), Greece (GEL 0.11) and Ukraine (GEL 0.28) comprise the top countries for international calls.
Akhali Kselebi occupies 31% of the fixed-line phone market.
“In the next stage of technological developments the demand for fixed-line network services may stop completely but as of yet it is a distant prospect,” said Khatia Kurashvili, GNCC official.
“Unfortunately, the above data in the fixed-line business does not permit us to make optimistic predictions about its future. In 2013 the number of fixed-line users reached the results of 2009. But this does not mean that in the event of implementing certain technological innovations the demand for fixed-line telephones will not increase. I am talking about the convergence and blending of fixed-line and mobile phones. If we manage to create a unified network infrastructure and offer customers a wide range of integrated services, I think this business will have a future,” said Injia.
Meanwhile the number of mobile network subscribers continues to rise in Georgia. In the first quarter of 2013 it totalled 4,908,569, compared to 4,486,521 for the same period last year.
The annual income of Akhali Kselebi amounted to GEL 19,991,597 in 2012. The figure was much higher for Silknet, one of the leading companies operating in telecommunication sectors. It totalled GEL 151,274,589. Meanwhile the revenue is almost half less than the income of Magticom (GEL 288,846,322) and Geocell – GEL 250,394,619.
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