Telekom Austria AG

07/03/2023 | Press release | Distributed by Public on 07/03/2023 05:27

A1 Group Deeply Unsettled by an Unexpected Decision of the Bulgarian Commission on Protection of Competition

The decision permits Vivacom to gain dominant position on TV and broadband market with the acquisition of seven local operators

A1 Group, along with its local subsidiary A1 Bulgaria, expresses great surprise and concern over CPC's decision to authorize Vivacom's acquisition of Networks-Bulgaria, the largest operator in northern Bulgaria, as well as six other smaller companies across the country. 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.

The decision was halted by the Supreme Administrative Court and remanded back to the regulator for review due to indications of a significant impediment to effective competition and concerns of excessive concentration. Going forward pending final approval of yet another acquisiton of economically and infrastructurally strong operators would enable Vivacom to acquire over 60% of the TV distribution market and nearly 40% of the internet market. Such consolidation not only hampers market competition but also runs counter to the best interests of society as a whole.

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 BGN 5 billion to date and plans for over BGN 1 billion more over the next 5 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 behavior 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 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.

A1 Bulgaria, part of A1 Group, is a leading provider of communications, payment and entertainment services as well as integrated business solutions. Offering mobile and fixed services, high speed broadband internet, satellite TV, own interactive TV platform, mobile TV app, four sport channels under the MAX Sport brand, financial services, ICT, cloud, and IoT solutions, A1 Bulgaria achieved revenues of 640,4 million Euros in 2022 and an EBITDA of 254,4 million Euros.