A1 Group and PPF Telecom/Yettel Bulgaria challenge regulator for allowing acquisitions; Vivacom accuses them of collusion
Bulgaria’s telecoms sector is in turmoil after the Commission for Protection of Competition (CPC) approved the acquisition of seven fixed broadband and TV operators by incumbent Vivacom.
The acquisitions are: Ruse-based NetWorx Group which comprises Networks-Bulgaria, Online Direct, TVN Distribution Bulgaria and Telko Infrastructures; and TELNET Group, which is made up of TELNET, TELNET Securities and STV, with headquarters in Veliko Turnovo.
Court and regulator disagreed
The regulatory saga has had many twists and turns. Last December, the country’s Supreme Administrative Court (SAC) overruled the regulator’s previous approval of Vivacom’s acquisition of NetWorx Bulgaria due to worries about undue market dominance.
In February, CRC launched an investigation into the deals struck by Vivacom to gain direct, sole control of NetWorx, TVN Distribution Bulgaria, Telko Infrastructures and indirect control of Online Direct.
A1 Group and PPF Telecom/Yettel Bulgaria have both issued statements airing their displeasure at the CPC’s new ruling, claiming it “‘shows blatant disregard for recent European rulings” and result in “‘a huge concentration of market share and power in the hands of Vivacom and its owner United Group”.
United we stand
In recent years, United Group has expanded rapidly across south-east Europe including Bulgaria. Its assets there include the national commercial broadcaster Nova, incumbent telco Vivacom (approved by the European Commission in 2020 after a long wrangle about legal ownership was finally settled in 2019), Net1 and ComNet which are based in the capital, Sophia, and N3 in Plovdiv.
Vivacom dismissed their comments as “irresponsible” with “wildly inaccurate and misleading allegations”. It also accused them of collusion and pointed to other nearby markets like Croatia where Deutsche Telekom accounts for nearly 60% of the broadband and pay-TV market and over 50% in Greece, directly and through local subsidiaries.
Another decision pending
After the CPC’s decision, A1 Group and PPF Telecom/Yettel also expressed concern about the imminent decision by the CPC about some of Bulsatcom’s assets being acquired by a subsidiary of United Group.
Meanwhile, Ѕvіlеn Маkѕіmоv, owner of NеtWоrх, told Ruse News that the binding terms of its contract with Vivacom have expired as more than two years have elapsed since the deal was struck. Маkѕіmоv said the terms and conditions need to be renegotiated, citing іnflаtіоn and the company’s іnсrеаѕеd ЕВІТDА.