A1 Group and PPF raise concerns with Vivacom’s acquisition of Networks-Bulgaria

A1 Group which operates its local hub A1 Bulgaria and PPF Telecom behind Yettel Bulgaria have raised concerns over the Bulgarian Commission on Protection of Competition’s decision to authorise the Vivacom’s acquisition of Networks-Bulgaria.

Networks-Bulgaria is the largest operator in northern Bulgaria and has six other smaller companies across the country. It has investments of nearly BGN 5 billion to date and plans for over BGN 1 billion more over the next 5 years.

A1 has claimed the acquisition is a move from United Media Group to acquire control of Bulsatcom’s operations without notification to the CPC and under suspicion of some other legal infringements.

Similarly, PPF telecom highlights that Bulsatcom failed to notify the CPC promptly about the deal, as well as the source of its funding being a loan of €127 million extended by United Group, the owner of VIVACOM.

According to PPF, the acquisition will give Vivacom controlling close to 70% and 50% of the internet access market respectively in the region of Rousse and the regions of Varna, Razgrad, Silistra and Sofia City.

A1 Group said, “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.”

PPF Group added, “Yettel Bulgaria and PPF Telecom believe the CPC’s decision shows blatant disregard for recent European rulings that have prevented transactions that would have created regional concentrations of market power.”

The company further explains the market shares are “unheard of in any other European Union country” and will “weaken competitive pressure in Bulgaria’s bundled services market, potentially leading to fewer choices for consumers and higher prices.”

Both companies have urged the Bulgarian Commission to review its decision, PPF to further raise these matters with the European Commission.