A1 Group and its Bulgarian subsidiary have expressed “great surprise and concern” over the regulator CPC’s decision to authorise Vivacom’s acquisition of Networks-Bulgaria, the largest operator in northern Bulgaria, as well as six other smaller companies across the country.
In a statement, they say that “this development further adds to the apprehension surrounding the regulatory decisions, as it reinforces the potential for the creation of a dominant player in the Bulgarian telecom marketplace, which poses significant disadvantages for the consumers”.
A1 Group points out that the decision was halted by the Supreme Administrative Court and remanded back to the regulator for review. Final approval would enable Vivacom to acquire over 60% of the TV distribution market and nearly 40% of the internet market.
“What is happening is particularly worrying in the light of the forthcoming decision to acquire the biggest broadband operator – Bulsatcom. According to publicly available information, this transaction is an attempt by United Group to acquire control of Bulsatcom’s operations without notification to the CPC and under suspicion of some other legal infringements. The potential acquisition of Bulsatcom, together with the other seven companies, poses an even greater risk of consolidating the market position of a single player, potentially leading to dominance at the expense of both competitors and consumers. In view of its strategic role in the country and the region, A1 Group has already alerted the European Commission about its concerns regarding the hidden buyout of Bulsatcom by United Group.
“The subsidiary in Bulgaria is one of the largest investors in the country with investments of nearly BGN5 billion to date and plans for over BGN1 billion more over the next five years. Being part of the fourth biggest telecom provider in the world – América Móvil – A1 Bulgaria follows the highest standards, conducting its business on two continents transparently, in full compliance with legislation and corporate ethics and trust in the rule of law. A1 Bulgaria therefore expects clear rules and predictable regulation to ensure impartial decisions and fair competition. The role of the state and industry regulators is to strike a delicate balance between the interests of businesses and consumers. However, the observed behaviour of market participants raises concerns about the potential emergence of a monopoly, which could adversely affect the quality and pricing of services provided to end users.
A1 Bulgaria concludes by saying that it “hopes that its firm position will alert the competent regulatory authorities at national and European level before adverse consequences for the competitive environment arise. Their adequate and timely response will give the right signal to the shareholders and other international companies that the business environment in Bulgaria supports current investors and attracts new ones”.
