The State of the Internet – Who controls Georgia’s Telecommunication Sector?

The ownership of several Internet service providers remains opaque, a new TI Georgia report finds

TBILISI, February 5, 2013 – All major Georgian telecommunication companies are owned by structures of shell entitites, which makes it often difficult or impossible to identify beneficiary owners. A new report by Transparency International Georgia entitled The State of the Internet – Who controls Georgia’s Telecommunication Sector? finds strong indications that 50% of Caucasus Online and 49% of Beeline, the country’s third largest mobile phone operator, are controlled by the same opaque individual(s), hiding behind entities in the British Virgin Islands. These opaque owners have appointed Levan Karamanishvili as their representative, who is also a shareholder of Rustavi 2 and Mze and is linked with the GMC restaurant group and several other businesses.

The report finds that telecommunication companies remain reluctant to inform their customers about how their data is collected, stored, managed, protected and under what conditions information is shared with third parties and the authorities.

The issue of unchecked and systematic surveillance of electronic communication has yet to be addressed by the new government. The Ministry of Interior appears to have continuing direct access to the technological infrastructure of telecommunication companies. This access effectively undermines any efforts to establish the court-oversight required by law over any monitoring of citizens’ electronic communication.

There are no indications of censorship or content being blocked by the Georgian authorities or Internet service providers. There are no recent known cases of activists or reporters being questioned or arrested for their online activities.

The number of Internet users in Georgia has grown rapidly in recent years but there are indications that this growth has slowed down dramatically, leaving the majority of Georgians without Internet access and no computers skills. About a quarter (24%) of Georgia’s adult population is online every day; another 8% of the population are online at least once a week.  However, more than five out of ten Georgians – 58% of the population – has never been online, according to a recent survey conducted by CRRC. Computer literacy and access to the Internet is very low among people living in rural communities and among people older than 56 years. This highlights the need for government on all levels to get involved in order to encourage and educate more people on how to use new technologies.

TI Georgia recommends Parliament to consider legislation that would require mobile phone operators and Internet service providers, which are overseen by the Georgian National Communications Commission, to publicly disclose their beneficiary shareholders, as is the practice for broadcasting license holders. Furthermore, rules should be considered to increase the ownership transparency of commercial Georgian websites, including professional news media outlets.

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