Georgian Communications Market – Innovations and International Trends

Maka Ghaniashvili

XIX century was considered to be the era of progress, XX – postmodernism, as for XIX century, it is considered to be the information era, when the major product and real currency is information.

The whole world relies on high technologies of electronic connections, communication is vitally important for the development of economy. Below we will discuss the international tendencies of internet development and innovations on Georgian communications market.
Modern world is hard to imagine without internet. According to international standards, internet is the quickest developing means of mass information – number of internet users reached 50 millions in 4 years after it has installed, while it took 38 years for radio to reach the same indicator, as for Television, it took 13 year to have the same success. At 25 anniversary of internet, in 1994 it covered thousands of networks and millions of users.
Internet is the high qualified service of the modern world. It has revolutionized business: It is the medium for communications. Internet has created wide range of opportunities for doing business, – nearly all business companies attempt to expand their markets through internet. “Digital Economy”, commonly known as E-commerce covers the following: Business to Business Commerce (B2B), B2C e-commerce refers to the emerging commerce model where businesses /companies and consumers interact electronically or digitally, Business to Government (B2G), Consumer to Consumer (C2C), and Mobile commerce (m-commerce).
Internet creates different forms and methods of receiving education through online universities and education courses.
According to International Internet monitoring company Netcraft, the number of internet sites reached one hundred million by the end of 2006. Half of them are active, as providers state. In 1995 when Netcraft started its observation of internet space development dynamics, number of internet sites reached only 18 000. In May, 2004 it reached 50 millions, and even doubled in two years. As Netcraft states, number of internet sites drastically increase in the US, Germany, South Korea and Japan.
Quick information exchange is of great importance today. Internet combined the functions of media sources and its most important function nowadays is to provide information to its users that were supported by electronic newspapers as well. Electronic media, internet as a whole, faces the drastic development. The first electronic newspaper “Electronic Club”, put on the network in 1990 was followed by boom of periodic electronic editions. According to statistics, by the beginning of 1995 there were about 100 electronic newspapers on internet, the number increased to 815 in a year, and 1115 in year and a half. In 1999 the number of electronic newspapers reached 5 000.
Georgian media has started internet application since 1995. First electronic versions of newspapers, TV and radio appeared in 1997-98. If pre-internet media didn’t have a web site, it was a shame. Although the web site was not practically used for editorial activities. Internet itself started formation from pre-internet media and started borrowing methods. Although, acoustic, visual and graphic information was not considered to be a real information. The main reason for that was the lack of technologies and also the fact that internet was not widely used. All these reasons created the danger that media means would use the network. Press used to steal internet materials and sources, fill pages and programs. The tendency was spread not only in Georgia, but also in different countries of the world.
The next step enabled the full integration of press, radio, TV and information agencies in world information computer network. That is why, pre-internet media faced the necessity to use new media, transform and improve its own activities. Accordingly, creation of constantly updating internet versions by press, TV and radio units, forming new internet editions became a necessity. Editorial staff management was completely transformed, it became flexible and mobile. Providing press, radio and TV editions with materials is implemented mainly through internet. Internet and pre-internet media resources have finally joined that led to creation of largest mass information holdings, such as: CNN-I in the US, BBC-I in England, DW-I – Germany etc.
Besides, more and more people use internet via mobile phones. Motorola, Nokia, Ericsson united in 1997 with the purpose to form global strategy of exchanging data through mobile phones. It is easy to receive date through mobile phones nowadays, although mobile internet has one “inconvenience “ – small size of mobile phones, limited memory and law speed of transmission, that do not give the possibility to show standard HTML internet page. Accordingly, information received on mobile phone screen is small and consists of data. In spite of it, informing customers through mobile-internet is widely used large information services (such as BBC).
Experts believe that quick growth of mobile digital communication market will be caused by global standardization of mobile phone internet access that will give operator companies the possibility to offer their subscribers wide range of digital informative service. Despite the growing importance of internet, only 10% of world population use internet nowadays. Internet is not equally avaliable for the residents of different countries. The following reasons cause low application of intent in developing countries:
1. Local Information barrier;
2. “literacy” barrier;
3. Language barrier;
4. Cultural difference and diversity;
Local internet providers have mainly commercial interests. Web pages are created with the purpose of having profit. They are not often available to wide range of users. Ordinary workers or a builders rarely find interesting information for them in the web, as putting this kind of information may be less profitable than putting let’s say films or music, having large commercial profit. One of the ways of solving the problem is to create non-profit initiatives –to create web pages for wide range of users and interests.
One more important issue that makes internet less attractive and comfortable to users in developing countries is a book. Especially elder generation who often remark that a book can never be substituted for them and computer helps the fall of intellect. It takes time from the young people, the time that should be used for reading books. Still, an alternative exists. It may help to change the above mentioned viewpoint, at least the part of it – electronic books, online library.
The issue of language barrier is also of an utmost importance. About 70% of world web pages are in English. Percentage of English WebPages even increases when talking about internet commerce. Therefore, non-English language speakers do not have a wide choice of web pages through which they could get information.
Experts distinguish several tendencies while talking about information technologies:
– “Losing” human resources (less competitiveness of elder generation in computer technologies);
– Unemployment, caused by lack of qualified staff in technical issues (being temporary but an important problem);
– Irrelevance in incomes, that is also temporary, till new staff acquires new skills;
– Influence of globalization on local industrial models;
– New education standards;
– Updating infrastructure;
– Amendments in rules and regulations (intellectual property, anti-monopoly etc.);
Solving the above mentioned issues greatly depends on state policy and measures implemented in this sphere. Government should support the development and popularization of internet in a country. One of the main conditions is competitive environment and diverse market that leads to price regulation. Besides, alternative ways of getting internet should exist –phone, cable as well as wireless. Private sector plays an important role as well. For instance, more and more users may access internet through Internet Cafes.
Cooperation with the international broadcasting systems and organizations that are actively involved in various international projects supporting communication system development is one of the leading opportunities of electronic communications development.
Georgia was involved in consulting and promoting projects organized and implemented by World Bank, USAID, EBRD UNDP and European Council.
UNDP supports the development of internet in third world countries. The program covers United Nations Information Technology Services (UNITES), Sustainable Development Network Program (SNDP) and learning courses to prepare qualified staff who have better skills to manage and use information technologies in developing countries. The Global Information and Communication Technologies department of World Bank supports the integration of member states in global information economy that will lead to the rise of private sector investment, poverty reduction and rise of standard of living in developing countries. Special project has worked out that enabled the development of normative and technical bases of the sphere.
Still, there is lot to be done. First of all internet quality should be improved. There is no doubt that Internet on Georgian communications market in of low quality that may be caused by the following: offering low quality internet by providers and internet cable hire out to providers by United Telecom.
After the privatization of United Telecom group of Georgian and Kazakh investors has set the update of infrastructure as a priority. As a new investor appeared on Georgian communications market, the situation tensioned. United Telecom decided to increase tariff of 3.5 to 15 GEL. According to Unite Telecom, small internet providers were not against the increased tariffs, although the biggest internet provider, Caucasus online considered the tariff of 15 GEL groundless. United Telecom had different opinion: each subscriber pays 50 GEL per month and internet provider has the profit of 30 GEL. The Georgian National Communications Regulation Commission joined the dispute. It stated the tariff for all internet providers – 11.68. According to Caucasus Online press service, the increased tariffs did not affect the customers’ service tariff. It remains the same.
Caucasus Online offers other innovations as well. The company announced the signing of a contract with Tyco Telecommunications to construct an undersea fiber optic system that will provide high bandwidth connectivity between Poti, Georgia, and Varna, Bulgaria. The system will serve Georgian markets by providing direct access to Western Europe via a state-of-the-art undersea fiber optic link. Tyco Telecommunications is the world’s leading company providing high technology undersea communications. Large scientific and technical basis enables the company to create, process and provide modern submarine high-tech communication systems.
The company has created and planted 80 types of submarine high-tech optical fiber systems in different countries. The total cost of the project amounts to USD 50 million. Tyco Telecommunications expects to deliver the system in the fall of 2008. The total bandwidth of the new link will be about 1.3 terabits. The system will allow for the provision of 3rd generation internet services.
Installing new technologies gives the wide range of possibilities to the Georgian company: to cover each city, each corner and each region of Georgia and to provide European internet to the whole Caucasus and Caspian countries. Georgian customers will have high quality internet from Western Europe in a year.
Another innovation of Caucasus Online ,a new product – Gelink. Main characteristics of the new product is quick and high quality internet. In comparison with DSL its advantage is stability. DSL connection speed reaches 8Mbts while the same indicator of Gelink is 10Mbts per second. Gelink speed is symmetrical that cases a high quality internet without defaults. It enables to use services like video conferences.
Geling tariffs are not high. Everage package of DSL costs 50 GEL. As for the new product, its price is 40 GEL per month.
The company has recently started to install Gelink. Due to difficult procedures, entering fabric line to each building and high speed internet distribution, the service will be delivered in stages.