PPF Telecom Group alarmed by regulatory decision taken in Bulgaria - cetin.bg
PPF Telecom Group alarmed by regulatory decision taken in Bulgaria
In a decision that Yettel Bulgaria and CETIN Bulgaria say contravenes accepted European norms and practices, the Bulgarian Competition Protection Commission (CPC) has approved a set of deals that will lead to a huge concentration of market share and power in the hands of VIVACOM and its ultimate owner United Group.
The CPC approved the transactions, which will result in VIVACOM controlling nearly 70% and 50% of the internet access market in Ruse region and Varna, Razgrad, Silistra and Sofia-city, respectively. This decision was taken as a result of two years of court hearings and following a court-ordered in-depth review that shared market participants' concerns about the concentration of market power.
Yettel Bulgaria and PPF Telecom believe that the CPC's decision shows a blatant disregard for recent European rulings that prevent transactions that would lead to concentrations of market power in particular regions. PPF Telecom and its companies Yettel and CETIN have always advocated for stable, competitive and diverse markets that offer consumers freedom of choice, promote price competition and help business transparency.
Since entering the Bulgarian market, PPF Group, the parent company of PPF Telecom and bTV, has invested almost BGN 2 billion in the country's telecommunications and media sector. As one of Bulgaria's leading employers and taxpayers, PPF has made a huge contribution to the prosperity of the country and its citizens. Yettel Bulgaria and CETIN Bulgaria are also innovators in the country's journey to reduce coal emissions, having recently signed long-term agreements to supply electricity generated from solar power to Elektrohold, one of Bulgaria's leading renewable energy producers.
Therefore, the CPC's decision has raised our concerns in relation to the upcoming consideration of the proposed acquisition of Bulsatcom's network by Slovenia Broadband, the sole owner of VIVACOM. If approved, the proposed acquisition would result in full concentration of the entire national market and infrastructure power far in excess of the normal thresholds recognised in all other markets in the European Union.
PPF Telecom has repeatedly expressed concerns to the CPC about the sustainability and protection of a level playing field in the fixed services sector as a result of the consolidation of the segment. One of the most disturbing and flagrant breaches of regulatory procedures occurred when it emerged that the acquirer Bulsatcom had failed to notify the CPC in a timely manner of the source of funding for the transaction, which was a EUR 127 million loan from United Group, the owner of VIVACOM.
The CPC's decision of 15 June 2023 underlines VIVACOM's leading position in the television distribution market in Bulgaria, where it holds a 32.9% share. VIVACOM is also the leader in the fixed internet market, controlling 31.4% of the total market. If VIVACOM's acquisition of Bulsatcom's infrastructure is approved, competition will be further harmed as they will jointly control nearly 70% of the national TV distribution market and 40% of the national internet access market. Such market shares have not been observed in any other European Union country. They will weaken the competitive pressure in the Bulgarian market for bundled services, which could lead to less choice for consumers and ultimately to higher prices.
PPF Telecom, Yettel Bulgaria and CETIN Bulgaria remain steadfast in their commitment to transparent business practices and fair acquisitions. We are therefore deeply concerned about the current regulatory environment in Bulgaria and the lack of transparency in the financing of the proposed infrastructure deal between VIVACOM and Bulsatcom. We urge all relevant regulatory and law enforcement authorities in Bulgaria to conduct a thorough review of the proposed transactions.
Acting on behalf of Yettel Bulgaria and Cetin Bulgaria, PPF Telecom Group intends to raise these issues with the European Commission, while preserving all its rights of defence in the meantime.