Answer from the international auditing company RSM to the Communications Commission

11 / November / 2020

Answer from the international auditing company RSM 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; Kalba International, Inc. and KPMG’s answers) we present the response of the auditing company RSMto 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.

RSM answer to GNCC statement

On Oct 2020 the Georgian National Communications Commission (GNCC) has issued a document titled "Response to the Policy Report and Expert Opinion Prepared by Consulting Companies for Magticom Ltd." ("the GNCC's document"). This paper is our response to the GNCC's document.

The GNCC's document is a response to the opinion of six leading audit/consulting firms engaged by Magticom Ltd. to evaluate the GNCC's Resolution N O-20-9/156 as of December 31, 2019. We were one of the six consulting firms.

Our professional opinion is that some of the data, arguments and conclusions in the GNCC's document might not be accurate. We believe the GNCC's document can be considered disputable in terms of selecting the relevant facts as well as reaching appropriate, fair and objective conclusions.

The GNCC's document has ignored some of the most important factors included in our paper, e.g. churn rates, switching barriers, subscriber density  and the risk of bankruptcy of an MNO and/or consolidation of MNOs.

In addition, it appears that the GNCC's document has reached its conclusion to allow the entrance of MVNOs without regard to the unique facts and circumstances of the Georgian mobile market, e.g. the current retail prices for mobile services in Georgia.

Please see full answer here.