Answer from the international auditing company KPMG to the Communications Commission in a public statement
Answer from the international auditing company KPMG to the Communications Commission, in a public statement dated October 16, 2020 concerning mandatory access regulation for virtual mobile operators (MVNOs) in Georgia
Statement of MagtiCom
The Communications Commission has completely ignored the conclusion submitted by MagtiCom, which was prepared by the six companies that are in the list of the Top 10 best audit companies in the world (from those six companies two are members of the "Big Four"). The report addresses the issue of regulating the mandatory access of Virtual Mobile Operators (MVNOs) in Georgia, in particular, the audit, analysis and conclusion of the experts of these companies that the mandatory access of the Mobile Virtual Network Operator (MVNO) will have unequivocally negative consequences for Georgia.
MagtiCom expected that the Commission would properly study the above documents and take actions that would not jeopardize state security and would not be detrimental to the further development of both the country and the mobile telecommunications sector.
As the Commission has moved to discuss this issue in public, furthermore doing it by producing unethical and unqualified statements, we are forced to provide additional information to the public. This time (after Deloitte’s; BDO LLC and Kalba International, Inc. answer) we present the response of the auditing company KPMG to the statement of the Communications Commission of October 16, 2020, which once again clearly and unequivocally confirms the inaccuracy of the position of the Communications Commission.
KPMG answer to GNCC statement
The present letter is intended as a response to Georgian National Communications Commission (GNCC) communication of 16 October 2020, where the Regulator addresses the reports on regulated access MVNO Introduction in Georgia, presented by Magticom and prepared by six independent contractors including KPMG.
While the Commission does not directly reference KPMG’s report throughout their response, they hint that all reports were “not based on any study of the relevant segment of the Georgian telecommunications market and, consequently, the “risks” identified therein cannot be reasonable or convincing”, and that “All the arguments and assessments provided in the documents are “likely” and “possible”[…]”.
KPMG report was prepared following methodological best practices, thoroughly documented, and supported by 93 different studies and sources, selected bearing in mind comparability and applicability concerning Georgia, and all of them were quoted in the report so that any reader can verify the conclusion for himself. To this purpose, this report is now made public.
We understand, and respect, the Commission’s role and responsibility as the sole regulator of the activities pursued by authorized undertakings in the field of electronic communications in Georgia, as well as we appreciate the detailed responses, methodologies and sources presented under the aforementioned communication, which we have carefully analysed.
From this analysis it stems that although the commission doesn’t directly contradict KPMG’s arguments or sources, it ends up deriving fundamentally different conclusions regarding i) the perceived competitiveness of the Georgian Mobile Communications Market, and ii) the expected results of introducing an MVNO in Georgia. By going through the sources presented by the Commission it’s our belief that this conclusion result from a subjective analysis, as in both accounts the exercise of contextualization to the Georgian reality has resulted in a different perspective, as we will try to outline in the next few pages, with the best interest of the Georgian Mobile Communications Market in mind.
We attach our initial report on Regulated MVNO access in Georgia as Appendix 1 to this Report.