Communication Woods Fairy Tales and Cheated or Communicated Population

FROM THE REDACTION

Georgia is a country full of curious things: on the one hand we complain that we have no incomes and live in poverty, and on the other – you will hardly find a Georgian without a mobile phone in his hand spending hours speaking on it.

One half of the population feigns poverty on mobile phones, and the other one – on city ones. Most people do not understand what happens in communication sphere today and how fairly we are made to pay the tariffs, where is the way out of the situation, and what we should expect to happen on the Georgian telecommunication market. We shall not stop speaking on phones, every day we spend more and more money on it. May be we are being deceived, or squander our scanty incomes?
Development of communications in Georgia started rather late, in the second half of 1990s. Today it can be said that this sphere is not fully covered. The specialists on this sphere say that Georgian telecommunications market is a rather liberal one, and in spite of many inhibiting circumstances about which we shall talk further, in our country this brunch is developing slowly but in sustainable way.
We can be referred to the telecommunications sphere? It can be said that everything by means of which information can be transmitted. That is telephone, television, Internet, and even post. When the matter concerns telecommunications, some people associate them with television, while television occupies the last place in this sphere. The most priority sphere, mobile communications, is at the same time the most developed one. People often hear such words as frequency, ether… but they also hear that these resources are limited, though they do not know the exact meaning of these words, and why these resources are limited. As our expert – Kakha Zhgenti explains to us, frequency of a signal’s transmission is a possibility of its transmission. A signal is transmitted by means of vertical and horizontal waves. This resource is limited in all countries of the world. It is elementary that a signal does not pass over the distance that is necessary for a man. Installation for transmission of waves is very limited. Just imagine that the air is divided into definite sectors in which there is installation that, thanks to the amplitude of oscillation, transmits a signal. Conditionally speaking, today Georgia’s air is divided into lines, and in conditions of the existing technology existence of another line is excluded for two reasons: this contradicts to physics laws, and there is no installation that can work at the frequency at which there is no such line. Scantiness of resources is explained by this fact.
Each country of the world has two free frequencies that are not sold, and require no licensing. These frequencies are freely used, and any so-called “radio hooligan” can make use of them. These frequencies are: 2,4 and 5,6.
In the world there are various practices of frequencies’ use: letting, long-term lease, selling, etc. What is interesting about a frequency, it is in the range from one to infinity. Its gradation into 1900, 800 and 400 is related to the installation that has been created – there is frequency at which installation has a good conductivity. An expert’s opinion about what it is and what happens in this sphere is important:
Kakha Zhgenti: – Television and radio, communications (i.e. telephone) and satellite frequencies differ. There are micro and metric frequencies in television. The latter ones are limited everywhere in the world, micro ones are unlimited. The higher a micro frequency, the better the quality is, though the installation is expensive and present-day TV-sets receive the signal with difficulty. The quality is good but the range of transmitting is small. Transmitting of a signal from the earth to a satellite and vice versa takes place by means of satellite frequency as well. Though it is also limited.
– How many metric television frequencies are there in Georgia?
From one to twelve. Let us suppose that one television channel has one metric frequency whose transmitter overlaps and suppresses the other one, that is why the second, the third metric frequencies should be ignored and another television channel should be given the fourth one.
The same principle is applied to the twelfth one. That is why the resource is exhausted. Presently 4 television companies have metric frequency: the First Channel, the Second Channel, and Rustavi 2 and “Iberia” television company also used to have it, but I cannot say what fate this frequency suffered.
There are very many micro frequencies, which, in their turn, are divided into ranges, and ranges – into sectors.
Metric frequency is much better than micro one, but its spreading range is small – it needs many relay lines. However, now the whole world switches to digital television, that is why micro and metric frequencies lose their importance. For instance, in my television, which we will soon open, I can receive any analog signal. The installation will transfer any signal into a digital one and automatically spread it.
– What is going on at mobile communications frequencies now?
There are two standards of mobile communications: GSM standard that is used in Europe, and CDMA standard that is used in the USA. There is a technological difference between them: both of them work at different frequencies. Capabilities of CDMA are higher but they are expensive, and GSM’s capabilities are more limited but have less cost price. As to GSM frequencies, they are: 800 1800 1900. Presently, there exists installation to create a GSM frequency. These frequencies are divided into ranges based on Georgian antimonopoly legislation. The situation in various countries is different: in Britain and Russia 1/3 of 900 frequency belongs to the state, which considered as strategic resource and is not sold. The rest has been sold. A small country like ours does not need it. Here GSM frequencies are divided into ranges. “MAGTI” and “Geocell” work in this range. I have no information whether anything was left for a third operator or for the state interests. From my point of view, it is not important anyway. Georgia has no possibility to use this frequency in case of war.
– As it is known, there exists 450 mobile frequency besides the above-mentioned ones. Has this frequency been sold as well or not?
This is a frequency of American CDMA standard, which, in its turn is divided into ranges. If I am not mistaken, the whole range was purchased by “Iberiatel” company in 1990. During the communist period “Altai” system telephone as well as government and car telephones worked at this frequency. Then it happened so that this infrastructure was ruined, and ownerless frequency was left, which was later bought by someone. However I do not know about how it happened or at what price it was sold. Now mobile communication of American standard is being created, which will be a serious competitor for the operator companies existing on the market.
GSM will reach its limit and stop. From technological point of view, CDMA has possibilities for development, and it will develop more than GSM.
– As it is known, “Megacom’s” frequency was divided into two parts. One part was bought by “MAGTI” for 25 million, and the second one is still owned by “Megacom”. There is a possibility that it can be sold to “Alpha Group”. How real is this prospect from your point of view?
There are rumors about it. “Alpha Group” created “Alpha Telecom” company which now, for instance, bought 11% of “Turktelecom, “Goldentelecom”, and other companies. “Kievstar”, “Vympelcom”, “Alpasia”. One of this company’s founders had a share in “Beeline”. “Alpha Group” is a big company. May be the third largest in Russia. Formerly this company was interested in buying in Georgia a share of GSM operator, including “MAGTI”.
If this company really enters Georgia, it will create mobile communication of CDMA standard. That is there will be 2 GSM and 2 CDMA companies. If “Alpha Group” continues negotiations with “MAGTI”, the latter already has this frequency and does not need the remained “Megacom’s” frequency at all. Though it is possible that “Alpha Group” will buy both of them, and as both ranges will be occupied it will not have competitors at CDMA frequency, the way “Iberiatel” has no competitors at 450 frequency. But what “Alpha Group” will decide depends on its strategic and financial interests.
In mobile communication there exists an indicator that is called “mobile coverage”, that is an indicator by means of which it is measured what percentage of the population is served by mobile communication. In Georgia mobile coverage reaches 15%. The resources of the market are determined. The coverage in America makes up 92%. In China this indicator is the highest – 98%. Such a high indicator is stipulated by a low tariff. Mobile coverage plays a considerable part in the tariff, though the tariff depends on many factors besides the coverage. Experts admit that mobile operators in Georgia have rather high tariffs and it can be said that they were raised artificially. The reason for that is insufficient competition – there are only two companies operating on our market and the indicator of population coverage is very low: “Geocell” has 420 000 subscribers, and “MAGTI” – 500 000 subscribers. The resource is large, and it is natural that none of the operator companies thinks about reduction of tariffs. There began a tendency of cutting tariffs by means of introduction of new services inside the network, but this does not concern the intercommunication and interconnection tariffs.
– What is the order of establishing of the international tariff?
It is determined by relations with international operators, cost of the line, how a local company establishes connections with this operator: by means of a fiber optic cable or satellite, etc. International tariffs have many components. Fiber optic cable may have different capacity. For instance, “Fobnet” sells one two megabit line from Tbilisi to Poti for 2500 USD, and Russia one two megabit line (here we imply symmetric lines) from Poti to Moscow for 7 000 USD. “Fobnet” is a monopolist and retains a high price. Presently it is the owner of the fiber optic cable. It is purely Georgian private company. However there exists an alternative railway fiber optic cable which, from technological point of view, still requires final works. The talk about it has been continuing for three years yet, but no one is really interested in it.
By the example of Russia I can say that it has a separate railway telecommunication company that is called “Transtelecom”. This company is one of the largest in telecommunication sphere.
Georgian railway is for some reason takes little interest in it, though it has fantastic opportunities for being a kind of corridor between South Caucasus countries and Europe. The railway has fantastic capabilities: optic fiber cable has been stretched to Batumi, about 12 km. are left to Sarpi, and the railway can freely stretch a cable for this distance. This will probably cost 120 000 USD. This is not such a big sum which will make it impossible. Turkey has an interesting geographic location from the viewpoint of the fact that optic fiber cables from Europe and Asia connect in Istanbul and it will be a single node. Thus, Georgia has an opportunity to connect Azerbaijan and Armenia with Europe. It must be said that Azerbaijan and Uzbekistan have not come to an agreement concerning stretching of an optic fiber cable on the bed of the Caspian Sea. Besides, there will be an alternative with enabling of the railway optic fiber cable. Presently Georgia has the only way of getting to Europe by means of optic fiber cable. This way is – “Fobnet”, which connects with “Rostelecom” in Poti.
Not long ago a relay line was stretched by means of which we can connect with Istanbul from Akhaltsikhe, but this is not optic fiber communication, and its quality is not high.
– As it can be seen, we lose considerable transit revenues because of underutilization of the railway optic fiber cable.
– I do not want to mention somebody personally, but it is up to the manager of the railway to determine its priorities.
We also do not have an alternative connection with Russia except for Poti-Novorossiysk line stretching on the seabed. The signal that passes through optic fiber cable is the most expensive one, but it has large capabilities and perfect quality. One two megabit optic fiber line will conduct, let us say, a million of minutes, while satellite communication of the same size will conduct 300 thousand minutes. There is such a big difference between them. Optical communication has many pluses: it is protected, has high quality, etc.
– Satellite is an alternative to optical communication in receiving of a signal. What are the tariffs here and how they are calculated?
– A country that has a satellite should be rather strong from the material point of view. Its construction and launching into space is very expensive. Taking care of it is also an expensive pleasure. Georgia does not have a satellite and will not have it for a long time, though I have big doubts that we will ever launch our own satellite. It is very unprofitable for such as small country like ours. We shall not be able to use it either for television or telephone purposes. We just shall not be able to maintain it. Proceeding from this, the price of a satellite signal in no way depends on us. Here the price is regulated in accordance with the international market. However, it is much cheaper than optic communication since, as we have already said, it has less capabilities.
– The subject of rounding-up of mobile phone tariffs is very important. When a person speaks for 30 seconds on the phone he must really pay for 30 seconds and not for one minute. The rounding up coefficient is very big. You buy a 30 GEL card and do not know for how many seconds you can speak for this 30 GEL. The system is not transparent at all.
– Rounding up depends on billing system and this is rather confidential information. Billing is a system of traffic’s accounting. I cannot vouch for it, but in Russia seconds are counted by HTC , “Beeline” makes 5 second rounding-ups. In Europe every second is counted the way it takes place in China. Though here the tariff is so low (2 cents) that you cannot make a big mistake rounding it up, which we cannot say about rounding up of high tariffs. As to the contour system, it does not exist in our county. By the way, Azerbaijan is the only country on the Southern Caucasus market in which there exists the contour system and it has twice as lower tariffs than we do. Approximately 5-6 cents per minute. I believe that SMS service in Georgia is very expensive, and consumers pay high tariffs. If I had a mobile phone company, I would introduce a per second counting system It depends on a company’s management.
– I have an impression that there is a certain agreement between our two operator companies concerning rounding up and tariffs…
Since there are only two companies in Georgia, it cannot be ruled out that there is some partner agreement between them. There is still an opportunity of making money on the market without having a competitor, and that is why it is possible to fix own tariffs.
– Will introduction of “Bali” cause any changes in tariff formation?
– Think that introduction of “Bali” is more likely to be a marketing move than a principle change in tariff formation. “Bali” subscribers will always be in such small numbers that it will not initiate changes in tariff formation. When the coverage reaches 30-35%, the changes will become obvious.
– It is not clear why the tariff will be reduced when the company can work in accordance with the old tariffs in the same competitive environment and get more money than it has been so far?
The matter is that it will not. The company’s coverage depends on the tariff as well. Both operator companies will some day exhaust the resource of solvent population, as a result of which marking time is in store for them. After that a necessity of tariff reduction will arise.
– Georgia has the highest phone tariff in the world. Of course it is stipulated by both objective and subjective factors. Increasing of competition will contribute to tariff reduction. From this point of view, enabling of CDMA is important. According to your information, when is the introduction of the new mobile communication standard is planned?
– This is related capital investments. If there takes place a large capital investment, its capabilities will be so high that it will soon override GSM.
There is also another factor that stipulates advantages of CDMA standard in Georgia. There is a principle difference between CDMA and GSM. CDMA standard is not used in Europe, and the problem of roaming arises from here. There is another circumstance: as CDMA standard has more capabilities, European GSM operators try to introduce maximum high tariffs for interconnection, and by doing so, limit the coverage of CDMA.
– What do telephones of the third generation represent, and when they can appear in Georgia?
– If mobile phones of the third generation were introduced in Europe 2 years ago, in Georgia it will probably happen in 2007. It can be said that mobile phones of the third generation represent a kind of enticement. Now one can watch TV in a third generation mobile phone, how this can be used by Georgians is a subject of another conversation. Let us draw as an example GSM’s WAP service. To use it, one should live in a large country where you have to cover a distance of 1500 km to do another business after finishing the first one. In order not to sit idle in transit for many hours wasting time, one can do his own business. And in our country, where one can get from one part to another in about 4 hours, it is ridiculous to speak of this kind of service. Of course I hail any kind of new service, but from the viewpoint of its utilization, it has a very low rate. That is why this sphere is developing so slowly.
– In Georgia there work three independent international and local operator companies: “Akhali Kselebi”, “Elektrokavshiri”, and “Akhteli”. “Elektrokavshiri” is owned by the state and is a natural monopolist, since formerly all telephones that existed in Georgia belonged to “Elektrokavshiri”. Besides the above-mentioned, there exists “Georgian Telecom” which is the owner of 8-10 international operator. It has a local network, though it is very limited. It owns the 44 telephone exchange. This company was jointly established by the Georgians and Americans with the following share holding: 30% – “Metromedia”, 19% – “Bulkomi”, and 51% – the state. Formerly, when “Georgian Telecom” was being established, it was introduced in the statute that the Georgian side assumed responsibility not to create a competitor for it. When “Elektrokavshiri” was given an international code and made an international operator, it caused “Telecom’s” big displeasure. Before it had happened, all international operator companies had to connect with “Georgian Telecom” for implementation of an international call. That was the case until 2000. Presently Georgian telecommunication market is a very liberal one. Each company can independently take channels and connect with any foreign operator.
Besides, introduction of Internet and development of sound traffic has created a serious alternative in the form of IP telephony. This is sound transmitted via Internet. Development of IP telephony in Georgia caused sharp reduction of prices for international calls. Sound traffic is very expensive in all countries. This is stipulated by special installation. The Internet is large and there is everywhere, and it is easy to send information to any part of the world. However, by means of sound traffic, information should pass many points. According to the experts, it has been about five years since IP telephony appeared in Georgia.
– Mr. Kakha, it turns out that during the period of five years telephone companies were robbing the population. They made people pay 35 cents for what cost them 5 cents.
– In any case, advertising of this fact does not take place. That goes without saying that all companies worked on IP since the tariffs started to be reduced so sharply. However, not only this is the reason for tariff reduction.
Liberality of Georgian telecommunication market gave the companies an opportunity to directly connect with foreign operators. Formerly, even if IP telephony had existed, based on the shaped situation, any operator should have passed its calls to “Telecom”. It imposed its price and passed these calls to “Rostelecom”, then “Rostelecom” to “Deutschtelecom” and so on. Each of them had their own price, and in spite of working on IP telephony, it increased tariffs for the population. Presently, traffic, for instance to Germany, is implemented without “Georgian Telecom”, “Rostelecom” and other companies. This, obviously, decreased the tariffs.
– How did “Global 1” manage to work at low tariffs?
International tariffs of “Global 1” are very low indeed. There are various mechanisms for that. Everything depends on partners. “Global 1” has no subscribers on the internal market. It is a common practice in the world when a company is established, it has no own subscribers and it works in the following way: for instance, “Elektrokavshiri’s” subscriber calls to Germany, “Elektrokavshiri” can receive this call and transmit it to Germany, and all this will cost it 5 cents, or it can hand it over to another company that has no subscribers, but has contracts with various local companies, it has a low tariff at the expense of a big volume, and it will finalize this call. If “Elektrokavshiri” has a million subscribers in Georgia, and if million people call to Germany, the volume will be so small that it will not be given a low tariff. But when calls of ten million people enter Germany, it goes without saying the tariff there is much lower.
The above –mentioned IP telephony will possibly substitute for the traditional notion of telephone, and people will be connected by the signal transmitted via the internet.
The Skype program, offered to Internet users by the company having the same name, became widespread and popular in Georgia. It is the same as IP telephony but with a difference that this is a communication between computers. The sound is transformed into digits, that by means of special installation are again transformed into sound. The signal transmitted via Internet is cheaper than all alternative means since the Internet itself is cheap. Skype is a small firm that gives people an opportunity to make free calls to other Skype users via Internet and also cheap calls via ordinary phone. In the experts’ opinion, rising of Skype and VOIP (“sound in the Internet”) means nothing but the death of traditional telephone business based on more that a century old technology. Skype is a spectacular manifestation in telecommunication industry. Sound signal is transmitted by means of high-frequency Internet. There are 54 million people on the list of the company’s consumers, but other companies, that also, partially or fully, implement calls, have millions of consumers. Skype’s founder – Nikolas Zenstorm says that, according to his strong belief, in future a customer will not pay for a call, just as it is the case with sending of an e-mail. This will cause a gradual death of the telephone market, since the prices fixed on the telephone market are sure to decrease.
VOIP offers its consumers more than low prices. A consumer can choose a number of VOIP provider and make use of the following services: sound mail, video, etc. A large number of providers gives VOIP an opportunity to enclose a bill to traditional telephone number. Thus, a subscriber can connect with numbers of San-Francisco, New-York, and London by means of his computer or VOIP, and then connect with one of these cities by a local call. Besides, a customer’s phone or computer, as soon as it is connected to the Internet, will be able to call to any part of the world. Thus a subscriber can take one city’s number with him to another one. In short, Skype and VOIP services offer us low prices, wide choice, and perfect system.
This is a wonderful novelty for customers, but a nightmare for telephone operators.
With appearing of every new “destructive” technology, representatives of outdated technologies have always tried to block it. But there are those who can accept the new in spite of the fact that it is dangerous for their business. The system of free calls offered by VOIP will be particularly painful for the operators that are concerned with payment more than others. In particular, here belong mobile operators that for years have been trying to make subscribers pay as much as possible. And even worse, the third Generation itself (3G), that was to expand these firms, is likely to destroy them. The already strong operators that create networks based on the Internet give such firms an opportunity to use a more effective and cheap VOIP service in comparison with the traditional telephone. These operators are working in accordance with the following principle: join them if you cannot win a victory over them, and this way they enter this business. The fact that VOIP will deliver a strong blow on traditional telephones is already beyond doubt, but the question is when it will happen. This sector’s representatives already speak of this day and believe that spreading of this technology will be possible in about 5 years. In short, VOIP is implementing formation of the telephone system anew. That is why a commotion around Skype was stirred up. The leading auction house Ebay spread information that it was going to buy Skype for 2,6 billion USD, plus 1,5 billion if in future this firm reaches its goal. This is seemingly a giant sum for a firm whose annual profit makes up just 60 million USD, and which became profitable only now. In spite of all this eBay is not the only company showing interest in Skype. Microsoft, Yahoo News Corporation, and Google say that they are considering this issue. Supposedly, the sum offered by eBay at the auction is the largest. The company declares that it is planning simplification of Skype’s technology, and offers commercials to the sellers for connection with customers by just pressing a button. But the analysts are skeptical for some reason. In their opinion, eBay is not the best proprietor for Skype. Of late there was a big commotion around Skype, and sound transmission issues via Internet were widely covered.
The fact that eBay, unlike other proprietors, gives Skype freedom in issues concerning both its business and brand is important for the company. “When Yahoo and Microsoft buy companies, they in fact shred them” – says Zenstorm. In his opinion, Skype should become the largest and best platform in communication sphere in the world, it does not matter whether it is text, sound, or video Internet service, computer or a mobile phone. His company is just three years old, and this year it will return only 60 million USD, which is actually is not a profit. Nevertheless, one cannot make fun of its ambitions, it really can defeat telephone firms. His firm can daily add 150 000 new consumers without additional spending on equipment or marketing. The company increase the number of consumers if it is knows that only some of them will use such money service as SkypeOut, SkypeIn and voice mail, it will also be a source of money. All this will initiate an unusual business. The founder of Internet Telephony – Rich Terani says that in future voice communications will be free thanks to Skype and its services.
IDC firm that conducts money research makes a forecast that the number of VOIP’s subscribers in America will reach 3 million by 2005, and 27 million – by 2009. There are already 8 million subscribers in Japan. According to the data of another research firm, by 2010 the number of subscribers will reach 197 million, with the exception of the subscribers that use this service without a signature. Skype only has 54 million consumers. Till a telephone call becomes 100% free all over the world, VOIP will completely ruin the chargeable model of the telephone industry. The factors of distance and duration of a call are completely irrelevant for VOIP. According to Zenstrom, sooner or later people will give up telephone numbers and will use their names the way they do when they send an e-mail.
For instance, VOIP can make serious problems in Taiwan for such mobile operator as Vodaphone. Taiwan has the largest relative number of VOIP consumers. VOIP service poses less threat for integrated operators that offer both cable and mobile services. Deutsche Telecom, Japanese NTT or BT French Telecom and KKPN are constantly creating new networks based on Internet technologies. These companies themselves can offer VOIP services to consumers. Some operators complicate the situation since they try to hamper VOIP. Accordong to the information spread by Chinese local newspaper, China has blocked receiving of Skype from Shenzhen. German and American providers use the right of blocking VOIP. In February, Madison River Communications – a telephone company from North Carolina was fined for 15 000 USD for blocking VOIP services. Rich countries of the world have a wrong approach to the issue. Most providers are completely taking VOIP services for improving the quality of services. In spite of all the efforts, the tariffs for chargeable telephones are changing. The prices for services are being reduced to zero. Many regional operators in the USA offer unlimited local and national calls to consumers with a fixed monthly fee, this kind of attempts are becoming popular in other countries as well. Some operators introduced VOIP services. For instance, Verizon’s Voice Wing and BT Broadband VOICE offer low prices for traditional telephones to the consumers, but their services are more expensive than that of Skype. In case implementation of a call in a traditional way will be completely finished, many companies create new VOIP like networks based on the Internet.
There is another innovation that worries telephone operators very much – IPTV. This is a service by means of which a new very-high-speed Internet connection at home is possible through television. This represents a list of services giving telephone operators a possibility to have a source of income. It is possible that by 2010 voice will become freely used in the Internet, and operators will find funds for using a service like IPTV.
– Will the Internet substitute the telephone in future?
– Of course it will. If providers in Georgia develop, but they still have problems in spite of advertisement, they will become competitors for mobile and ordinary phones. People that often use computers get in touch with each other by means of a computer.
I have to tell you that operators of mobile communications also widely use IP and Skype. Increasing of their revenues increase is stipulated by this fact. They use the Internet network to get in touch with abroad, it has a very low price but gives enormous profits. None of the operators makes you pay less than 2 USD for an international call.
It is interesting in what direction telecommunications in Georgia will be developing. In the experts’ opinion, telecommunications is a sphere that does not depend on political cataclysms. If the sphere is liberal, political changes make telecommunications more popular, since the more problems there are in the country the more often people want to get in touch with each other on the phone. In its turn it stipulates frequent transmission of information. And all this contributes to the development of the sector.
– I would to point out once again the market in Georgia is a very liberal one, and we have to thank the telecommunications regulatory Commission for that. It is achievement that the market is not limited. This will contribute to further development of communications. There is another problem: small size of the market does not stimulate investors’ interest. Lack of professionalism is another big problem. Besides management, telecommunications require knowledge of elementary technological processes. A company should contribute to the development of technology. The people involved in this business constitute a kind caste and this business does not go outside this circle. If anything is developed in this sphere, it is developed by the same people.
– Companies know that an investor from outside will not enter this small market with large investments. That is why they are developing at very low rates, but still the development is inevitable.
– Please, if it is possible, tell us about the new television that you are going to open. What kind of effect will it have on the market?
– The television is called “Global TV”, and the company – “Global Contact Consulting”. This is the first digital television in Georgia; its analogues in post-soviet countries are NTV in Russia, and ALMATV – in Baltic countries. Though, we differ from them. NTV belongs to “Gazprom” and the company has its own satellite. Russia is a big country and has a satellite to which it transmits a signal, and the satellite transmits it back on the whole territory of Russia. Our principle is the same: there are transponders installed on the satellite. Each transponder contains 36 megabits. Dynamic television needs 8 megabits to show the picture without delays. Television can show even with 4 megabits but more static broadcasts. One transponder contains 36 megabit, “Imedi” annually pays about 200 000 USD for transmitting its signal to the satellite and then all over Georgia, and besides that for having a relay line of its own, so that its subscriber be independent from re-service and TV tower. The principle of my television is the same. If I used a satellite with one transponder (I have 70 channels) I would be able to show 5 channels. “Imedi” pays 200 000 USD for 8 megabit. That is why we have chosen another way – there is Swedish company “Sirius” that has many satellites. A satellite has its operational period, and when this period is expired, the Swedes, unlike the Russians and Americans, does not leave satellites in the space and bring them back to earth. And I bought transponders from this kind of satellites, by means of which I transmit a signal to the area of 90 km. We have 18 TV towers on which our transponders are installed.
I have the 5th frequency. Next year the parliament will pass a law in accordance with which frequencies will not be distributed, they will be sold. I have a fiber optic cable stretched in the air from Kakheti to Batumi which I use for transmitting a TV signal. This will be a new digital cable television having a capability for creation of own channels as well. At the initial stage, in view of backwardness of Georgian technologies, I shall not transmit everything I am capable of. Then I shall add my own product, for instance world football. And I have obtained an official license for that. Other TV companies buy football for open air which is very expensive, but I buy it for a cable channel that has a limited number of subscribers, and that is why it costs cheaper.
– Is it possible to use this line as a telephone one and be a provider?
Of course it is possible. I have a capability of creating a WIMAX and WI-FI network in Georgia. If you buy a card you will be able to get access to the Internet everywhere. Then I will get down to mobile communications as well, it will be like Skype but a mobile one. If the network covers the whole country, I shall substitute a computer for a mobile phone, the telephone will be automatically connected to the Internet and it will be very cheap. Connection to “MAGTI” will be expensive since it will add its price, but connection from IP to IP will be free. A subscriber will pay a fixed monthly fee.
Besides, I cam transmit information for any organization and company, and create closed systems. I have this kind of order from “Telasi” – I shall give it an opportunity to receive information from its 42 substations by means of my towers. That means that the director general sees from his office what is going on at his substations in on-line mode. I can establish connection any banks. All this would be very expensive if it had been launched for the sake of a single project. From point of view of television, erection of a tower, for instance, in Khevsureti would not be profitable, but if someone there has a bank or there is a need to guard the border – then all this costs cheaper. And besides, I shall not be dependant on advertisement since I have subscribers of my own who pay money to me, the fee will make up from 7 to 30 GEL. We are planning launching of the new television for 2006.