The FINANCIAL — “Silknet is the number one internet service provider in Georgia in terms of number of users”, Ramaz Kukuladze first Deputy CEO of JSC Silknet, one of the largest communication company told The FINANCIAL. As Kukuladze says, in 2010 company overtook closest competitor Caucasus Online, the company that is co-owned by TBC Bank and EBRD.
Silknet was recently formed after merger of United Telecom Georgia, Vanex and Adjara Elektrokavshiri. Company is actively engaged in developing Silk TV, digital television based on IP. Company is already serving 365 000 telephone subscribers throughout Georgia, from where over 30% also receive an internet service.
The average monthly turnover of Silknet totals to GEL 12 million.
Kazakhstan based BTA Bank (former Bank TuranAlem) paid USD 90 million for a controlling share in UTG.
In his exclusive interview with The FINANCIAL, Ramaz Kukuladze first Deputy CEO of JSC Silknet speaks about new vision of the company and the sphere of development, as well as new technologies implemented at Silknet.
Kukuladze is in charge of front office operations and strategy at Silknet. Previously he has been working at Bank of Georgia, for the position of Deputy CEO, at insurance company Aldagi BCI where he was chairman of the Supervisory Board, as well as insurance company BCI where he was CEO. He has received an executive MBA Degree from IE Business School.
“UTG, Vanex and Adjara Elektrokavshiri formed JSC Silknet in March, 2010. The main purpose for setting up a new company was to increase in combined shareholder value over the sum of original 3 companies’ shareholding values. In other words, the rationale was to achieve the economies of scale, combine complementary resources and establish more efficiency,” declares Kukuladze.
Q. What kind of changes are implemented at Silknet?
A. We have fundamentally changed our strategy. Starting from September, we can bring fiber connections to homes in Tbilisi with the expensive state-of-the-art technology. As a result, we can offer a broadband triple play – internet, voice and television over IP. Our services over IP will be communicated to our subscribers under a new brand ”Silk”.
Next year we plan to add mobile service to our services portfolio and to pioneer in developing quadruple play offers in Georgia. We believe that with the appropriate setup, price structure and marketing activities, quadruple play can bring a big success in Georgia.
Q. How will the re-branded Silknet continue its operations in Georgia?
A. The re-branded Silknet will concentrate its efforts on the development of the following areas: Quality of Service –enhance user experience for residential and corporate environments.
New Product Development – continually offer a wide variety of new products and services to customers
Q. How many people have access to internet? How has the number changed in 2010? Please compare it with the previous year.
A. Over 220,000 customers have access to internet in Georgia, which is over 30% of total fixed telephone subscribers. Comparing to August 2009, this figure stood at under 25%. This shows the very significant increase in number of internet subscribers throughout Georgia in the last 12 months.
In the past 12 months alone, our company alone has acquired over 40,000 new internet subscribers.
Q. What is the percentage of Silknet customers who receive internet?
A. Demand for the internet has been growing in Georgia over the past few years and we expect that trend to continue. Currently Silknet serves over 365,000 telephone subscribers throughout Georgia. Of these, over 30% also receive internet services.
Q. In many countries communication providers offer digital TV service. What are your plans in this regard? How many subscribers do you expect to acquire?
A. SILKTV is our new television offering based on IP. We have started testing the product since June 2010.
SILKTV will offer customers over 120 digital channels – including over 20 sports channels, over 25 movie channels, over 10 kids channels, as well as High Definition (HD) channels. Most importantly, SILKTV allows customers to pause and rewind any program (including live TV) by up to 100 hours, making the experience of more flexible and customer friendly.
From September 2010, we are launching a massive marketing campaign to promote our new generation TV as a bundle along with other existing products and services, as well as a standalone service. With the pricing policy in place, we expect big demand for the service and expect to acquire over 10,000 subscribers before the end of 2010.
Q. Quality of Internet and its prices are still on the top of the problems in IT service. What is the future of Georgia's digitalization?
A. Georgia, just as nearly all other countries in the world, is part of global digitalization. Demand for the access to internet is growing year by year and we expect this trend to continue. With regards to the price for the internet access, it has been falling over the years making internet more accessible to customers.