Answer from the international auditing company Nexia TA to the Communications Commission in a public statement

12 / November / 2020

Answer from the international auditing company Nexia TA 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; BDO LLC and Kalba International, Inc.; KPMG and RSM answers) we present the response of the auditing company Nexia TA 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.

Nexia TA answer to GNCC statement

Having assessed in detail the Response of the GNCC, this document sets out a number of matters upon which we have differing views or arrived at different conclusions from those derived by the Commission. This detailed document groups the assertions made the Commission by subject matter and sets out the basis for arriving at a different position from that taken by GNCC.

In total, there are 13 items upon which, we have formulated a different opinion from those established by GNCC. Out of the 13 items to the questions prepared by the Commission where according to the GNCC, the advisory documents allege that:

  • 6 relate to Response Question number 1:
    in terms of price, the Georgian mobile communications market is quite affordable.

  • 4 to Question number 2 one of which is combined with Q3:
    assert that the regulatory framework wasdefined “incorrectly”,

  • 1 to Question number 3 one of which is combined with Q2:
    The Commission mishandled the so-called Three Criteria Test.

  • 1 to Question number 5: The Commission resolution fails to consider financial and market
    risks,operating and service quality risks as well as macro-economic factors.

  • 1 to Question number 7:
    technological risks and likely “dangers” associated to data protection.

The differing opinions are summarised in the document.

The market data and research of the current situation form the basis of our conclusion that the presence of MVNOs does not seem to be a requirement for competitive outcomes since the market is already competitive, and any benefits of MVNO regulation are likely to be minimal.

Please see full answer here.