Mobile phone and internet connections lead north to Russia.

By Elizaveta Valieva in Vladikavkaz and Irina Kelekhsayeva in Tskhinval (CRS No. 418 07-Nov-07)

South Ossetia is beginning to break out of years of isolation by linking up to mobile phone and internet networks. In almost all cases, the connections are with North Ossetia and Russia on the other side of the Caucasus mountains, and not with Georgia, despite its proximity.

The breakaway territory of South Ossetia, which has been de facto independent of Georgia for more than 15 years, had no international telephone connections until recently. Mobile phones and the internet have only appeared since 2000.

Two Georgian mobile companies were the first to arrive, and are still operating there, but in the last three years they have been squeezed out by a much more powerful, locally-based company, Ostelecom.

South Ossetia’s president Eduard Kokoity said in a recent speech that 12,000 people in the republic use Ostelecom’s mobile services – a large number for a territory whose total population may be only five times that. .

“I stopped using Georgian mobile services a long time ago,” said Vladimir Valiev, a businessman. “And I did that for patriotic reasons.”

Ostelecom offers cheaper services than its Georgian competitors. The network is also very convenient for people who travel back and forth between South Ossetia and the Russsian autonomous republic of North Ossetia, as the same charges apply in both places. One minute of conversation costs the same no matter which side of the mountains you are on.

“My mother lives in Tskhinval, whereas my wife and children are in [the North Ossetian capital] Vladikavkaz,” said Aslan Jioyev, who works as a taxi-driver and often crosses the border. “Since Megafon came to South Ossetia, I’ve been able to call my family in Tskhinval and Vladikavkaz, as if I hadn’t left the city. That wasn’t possible before, as calling Vladikavkaz from [here] is very expensive.”

The local provider is frequently referred to as Megafon, a reference to a major phone company in Russia.

Representatives of Megafon in Vladikavkaz refused to be drawn on whether the firm had a presence south of the border. However, one person working for the company agreed to speak on condition of anonymity, and said that Megafon was behind Ostelecom.

“This is a political issue – no one expects to receive profits,” he told IWPR.

According to this source, extending the service from North to South Ossetia has been an expensive business. Initially, the connection was via rented satellite space, but now it is via radio relay stations and a fibre-optic cable running under the mountains, through the Roki tunnel that links the two Ossetias.

“No figures have ever been published, but it’s a fact that there have been profits,” said the company source. “Mainly this is because people in North Ossetia who have relatives in South Ossetia prefer not to use other operators.”

Felix Bestayev, Ostelecom’s chief engineer, would not confirm that his company was Russian-owned. He said Ostelecom was an independent operator that has a roaming agreement with Megafon as well as two other Russian companies, Beeline and MTS.

In 2006, President Mikheil Saakashvili called the arrival of Russian cellphone operators in South Ossetia “a classical example of annexation”.

However, the source in Megafon said his company’s operation in South Ossetia had been cleared with the Georgian authorities.

“The network operates according to a license that was officially provided by the Georgian side,” he said, “although it’s unclear how exactly the license was obtained.”

South Ossetia is a chessboard of Georgian and Ossetian villages with differing allegiances. Ostelecom’s coverage area includes Georgian villages, but residents there continue to use Georgia’s Maghti or Geocell phone companies.

For many years after it unilaterally broke away from Georgia in 1992, South Ossetia was virtually cut off from the outside world. No direct international calls were possible, with all calls routed via Georgia.

A recently-introduced local phone code, with a direct radio link, is enabling South Ossetians to communicate with Russia at lower prices than charges for calls that go through Georgia.

Svetlana, a housewife, is delighted. “One of my children is studying in Russia and I need to call him a lot,” she said. “Until recently, I was getting big bills for international calls, but now that we have the new code it’s become a lot easier.”

South Ossetians wanting to use the internet also have a choice of options, but still face a lot of frustration getting online.

The internet first appeared in South Ossetia in 2000 thanks to local entrepreneur Gogi Beteyev. Acting on his own initiative, Beteyev signed a contract with the Georgian company Georgia Online, which provided him with equipment, while a local post office allocated him a small room.

Beteyev said that initially his firm had around a hundred subscribers, but the number has halved since then because the quality of the service has deteriorated. He said he was considering closing his office.

Another option is a satellite internet service which has been set up by Аny Кеу, a local non-government group, with the support of the OSCE mission in Georgia.

“The satellite is Italian but the internet is Russian, provided by the RUSAT company,” said Any Key’s director Oleg Repukhov. “It’s just that the company’s partners located nearest to us are in Tbilisi, and it is through them that we work with the Russian company.”

Subscriptions to the service, which is popular with South Ossetian government institutions as well as non-government organisations, are restricted.

This year, South Ossetia finally got its own internet provider for the first time. So far, Ircom only has 200 subscribers, but its internet caf? is always full.

“Our services are cheaper than the Georgian ones,” said Valery Vaneyev, chief engineer for the company. “Internet use costs 16 roubles [65 US cents] an hour in the daytime and seven roubles at night.”

The Ircom initiative has been funded by the South Ossetian government, with assistance from the Alanianet firm in North Ossetia.

“I like the fact that I can use the internet, watch the news, and communicate with people from other regions and countries,” said student Nadia Gabarayeva. “The quality isn’t always great, but I am glad the connection exists.”

Irina Kelekhsayeva is a freelance journalist in South Ossetia. Elizaveta Valieva is editor of the website