Silknet and MagtiCom Criticize ComCom’s Handling of 5G Auction

On July 31, Georgia’s leading mobile operators, MagtiCom and Silknet, issued statements in response to the Communications Commission’s (ComCom) announcement. According to the announcement, the auction for the introduction of 5G internet had only one participant, Cellfie (formerly known as Beeline, a Russian mobile operator), and as a result Cellfie will be the only company to introduce the 5th generation of mobile internet to Georgia.

ComCom’s Statement

In its statement on July 28, the Communications Commission announced that only Cellfie Mobile participated in the auction for 5G technology introduction, expressing interest in purchasing specific frequency lots. MagtiCom and Silknet had requested the auction to take place  an auction for at least one lot without mobile virtual network operator MVNO obligation and discount. The Commission says in its statement that it took into account the opinion of these two major telecom operators, which collectively hold more than 70% of the Georgian market and announced one combined and two separate standing lots without the MVNO obligation. However, says the ComCom neither of these operators took part in the auction. Consequently, the country will witness the introduction of new technology without their involvement.

MagtiCom’s Response

MagtiCom described ComCom’s statement as “another lie and deliberate disinformation about the 5G auction,” adding that “the Commission is trying to blame others for the failure of the 5G auction (an EU recommendation)”. MagtiCom explains that the operator company needs specific frequencies from the 3400-3700 MHz and 700 MHz range to build a high-quality 5G network. Not having the appropriate frequencies will result in a poor quality network. The Commission’s actions in the auction violate the principle of technological neutrality and force the operator to acquire frequencies for a complete 5G network, along with the obligation to accept a forced MVNO entry.

MagtiCom highlights that the company is not against MVNOs operating in Georgia if the relationship is based on a fair partnership and mutual benefit, rather than coercion from the Commission, which is biased and lacks proper justification or research. The Company opposes the Commission’s unnatural interest in the forced MVNO issue, as it poses a premeditated risk for Magticom.

MagtiCom accuses the Commission of spreading disinformation and being unprofessional. Despite MagtiCom’s warnings that the conditions of the 5G auction didn’t provide a real alternative for them to acquire frequencies without a forced MVNO, the Commission “ignored their concerns” and “falsely accused” them of breaking a promise they never made. MagtiCom asserts that they are fully capable of successfully implementing 5G in Georgia, as they have done with previous technologies. They express frustration that the Commission’s approach has delayed the introduction of new technology and investment in the country and call for a business-like approach from the Commission, listening to industry voices, and working together to foster the introduction of new technologies rather than hindering progress.

Silknet’s Response

Silknet expressed dissatisfaction with the Communications Commission’s handling of the 5G auction, stating that the Commission did not consider their recommendations to improve auction conditions. Silknet had suggested allowing operators the option to purchase a full-fledged license without mandatory MVNO admission, easing technical obligations, and developing a favorable legal framework for 5G micro-station placement. The company clarified that it supports MVNO admission on a commercially negotiated basis, as they have successfully allowed a virtual operator on their network for almost a year.

Silknet pointed out that the commission did not conduct a study to justify the strict obligations and restrictions imposed during the auction, which they believe contradicts European regulations. The statement notes that the Commission’s actions artificially delayed the implementation of competing 5G networks in Georgia and hindered potential investments.

The Company highlighted that there is a sufficient free frequency resource in the country, three times more than what all three operators currently use for 2G, 3G, and 4G networks, which is more than enough for effective 5G implementation. Silknet expressed regret that instead of encouraging network introduction and investments, the Commission is obstructing the country’s development.

Despite the unsuccessful auction, Silknet remains hopeful that the Commission will adopt a more constructive approach in the future, fostering communication with operators for the introduction of new generation technologies and maintaining a favorable investment climate in the country.

“SilkNet reiterates its position, noting that it is ready to deploy a 5G network throughout the country, which will require an investment of about $100 million over the next few years”, – reads the statement.

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