Georgian state-run telco Georgia Electrical Communications (Sakartvelos Elektrokavshiri, GEC) is to provide local and long-distance telephony in the country’s South Ossetian and Abkhazian conflict zones, it was decided during a recent cabinet meeting. Long-distance market leader Telecom Georgia (Sakartvelos Telecomi, TG) has been providing services in the troubled regions, but its new owners have been reluctant to continue following the company’s privatisation earlier this year. Now TG’s regional operations will be replaced by GEC in a process due to begin today. The continuity of GEC’s service is to be guaranteed in an agreement to be drawn up in readiness for the state-owned operator’s own privatisation sometime next year.
The breakaway regions of Abkhazia and South Ossetia have presented financial problems to TG since the early 1990s, by using neighbouring Russia’s international telephone dialling code and exchanges. Following government efforts to put an end to the situation, another issue came to the fore for TG: the logistics of actually collecting service charges from the separatist territories. TG is 81% owned by US-based Metromedia International, partly through investors International Telcell Inc. The Georgian government transferred its 51% stake to Metromedia in 2005. Private Cypriot firm Bulcom holds the remaining 19%. As it stands, GEC remains wholly owned by the government.