was strongly aligned with opposition parties. 4 This and other unilateral acts by the
government have led to accusations that the administration is attempting to exert
influence over the independent media. 5
The fixed-line telecommunications network in Georgia remains outdated and is
in need of significant investment. The network has very limited coverage outside
Tbilisi—Georgia’s capital—but even inside the capital the quality of telecommunications varies greatly. In urban areas, there are around 20 lines per 100 inhabitants, but
in rural areas there are only around four lines per 1,000 inhabitants. At the same time,
the number of fixed-line customers dropped in 2006 to 553,000, compared to their
level in 2004 (596,000). 6 In 2005, the main telecommunications operator, Georgian
Telecom, was privatized. There are currently three mobile phone operators in the country: Geocell (TeliaSonera), MagtiCom, and Beeline (VimpelCom).
The Internet emerged in Georgia in 1994 as an off-line e-mail service. By 1996, Sanet
Networks (one of the early Georgian ISPs) attracted U.S. financial support and was the
first entity in Georgia to provide full Internet services. In 1997, four more companies
started to provide Internet services using dial-up technology. In 2002, ADSL services
were introduced into the market.
During the 2000–2007 period, revenues earned by Internet operators increased from
3.7 million Georgian lari (GEL) to 42.5 million. 7 In 2006, their combined annual profits increased by 32 percent. Within the telecommunications market, the Internet is the
second fastest growing segment after mobile services. Georgian sources estimate that
by the end of 2007 the total number of Internet users of ADSL technologies went
beyond 41,000. 8
In 2006, a Kazakh investor acquired the state-owned telecom operator and established United Georgian Telecom (UGT). This operator is the owner of the cable infrastructure in the country, which it leases to other ISPs. Using its monopoly position,
UGT charges higher rents on access to its network. Moreover, UGT frequently rejects
requests by some ISPs to install or terminate their fiber-optic lines at UGT operated
facilities and charges a fee for each DSL user.
In 2006, three of the largest ISPs on the market—Georgia Online, Sanet, and Caucasus Networks—merged to form Georgia’s largest ISP, Caucasus Online. The company
is the Internet market monopolist providing service to more than 80 percent of the
population. Caucasus Online has begun laying down its own fiber-optic metropolitan
network in Tbilisi. This development should lessen the dependence on the main fixedline operator, UGT, which leases the underground right-of-ways that carry cable to
Caucasus Online for USD 110 per kilometer.
A major countrywide survey on Internet use has not been carried out in Georgia.
Consequently, reliable statistics on average Internet use are unavailable. However, isolated evidence can be gathered through small-scale surveys. Based on these sources, it
is estimated that in 2008 there were approximately 360,000 Internet users in Georgia,
Georgia
175
government have led to accusations that the administration is attempting to exert
influence over the independent media. 5
The fixed-line telecommunications network in Georgia remains outdated and is
in need of significant investment. The network has very limited coverage outside
Tbilisi—Georgia’s capital—but even inside the capital the quality of telecommunications varies greatly. In urban areas, there are around 20 lines per 100 inhabitants, but
in rural areas there are only around four lines per 1,000 inhabitants. At the same time,
the number of fixed-line customers dropped in 2006 to 553,000, compared to their
level in 2004 (596,000). 6 In 2005, the main telecommunications operator, Georgian
Telecom, was privatized. There are currently three mobile phone operators in the country: Geocell (TeliaSonera), MagtiCom, and Beeline (VimpelCom).
The Internet emerged in Georgia in 1994 as an off-line e-mail service. By 1996, Sanet
Networks (one of the early Georgian ISPs) attracted U.S. financial support and was the
first entity in Georgia to provide full Internet services. In 1997, four more companies
started to provide Internet services using dial-up technology. In 2002, ADSL services
were introduced into the market.
During the 2000–2007 period, revenues earned by Internet operators increased from
3.7 million Georgian lari (GEL) to 42.5 million. 7 In 2006, their combined annual profits increased by 32 percent. Within the telecommunications market, the Internet is the
second fastest growing segment after mobile services. Georgian sources estimate that
by the end of 2007 the total number of Internet users of ADSL technologies went
beyond 41,000. 8
In 2006, a Kazakh investor acquired the state-owned telecom operator and established United Georgian Telecom (UGT). This operator is the owner of the cable infrastructure in the country, which it leases to other ISPs. Using its monopoly position,
UGT charges higher rents on access to its network. Moreover, UGT frequently rejects
requests by some ISPs to install or terminate their fiber-optic lines at UGT operated
facilities and charges a fee for each DSL user.
In 2006, three of the largest ISPs on the market—Georgia Online, Sanet, and Caucasus Networks—merged to form Georgia’s largest ISP, Caucasus Online. The company
is the Internet market monopolist providing service to more than 80 percent of the
population. Caucasus Online has begun laying down its own fiber-optic metropolitan
network in Tbilisi. This development should lessen the dependence on the main fixedline operator, UGT, which leases the underground right-of-ways that carry cable to
Caucasus Online for USD 110 per kilometer.
A major countrywide survey on Internet use has not been carried out in Georgia.
Consequently, reliable statistics on average Internet use are unavailable. However, isolated evidence can be gathered through small-scale surveys. Based on these sources, it
is estimated that in 2008 there were approximately 360,000 Internet users in Georgia,
Georgia
175