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Georgia’s two largest Internet companies to merge

By Tatia Megeneishvili
Monday, August 17
Georgian National Communications Commission (GNCC) has launched a discussion on the merger of the two main internet service providers in Georgia Caucasus Online and Silknet, on the bases of filed application from the two largest companies, asking the permission of merge.

GNCC has three months to do market research before taking the final decision.

Georgia’s two leading internet and IPTV service providers, Caucasus Online and Silknet, filed an application for permission in the GNCC to merge on August 8.

To date, both providers have declined a request for details of a potential deal, saying that they will unveil details later.

Meanwhile, Internet users have expressed fear of increased prices if the two companies merge.

Former owner and establisher of Caucasus Online Mamia Sanadiradze said that if two companies merge, they might turn into a monopolist monster and affect the Internet market in the very worst way.

“The Internet price will rise of course and small internet providers will not have a chance to develop and exist, if the two companies merge,” he said.

The two companies dominate Georgia’s broadband internet services with a combined market share of up to 70% (Silknet with 40.7% and Caucasus Online with 27.4% of market share), providing internet services for about a total of 570,000 internet subscribers.”

Silknet is part of Silk Road Group, a conglomerate with businesses in transportation, telecommunications, banking, hotels and property development.

Caucasus Online was formed in 2006 as a result of merger of at the time three largest ISPs in Georgia. Caucasus Online, whose shares are now registered on three offshore companies, also owns 1,200 kilometer undersea fiber-optic cable that runs across the Black Sea.