Банкеръ Weekly



Three members of the Supreme Administration Court (SAC) rejected on February 28 the appeals filed by MobilTel, Netplus, GloBul, and Lafeta Ltd against a decision of the Commission for the Protection of Competition taken in November 2004. The decision referred to the third national GSM licence owned by the Bulgarian Telecommunications Company (BTC). According to the magistrates, the commission adequately decided that launching the licence without a competition to the then state-owned telecom against BGN54.1MN was not a form of state assistance. (Right after the licence was launched, a 65% stake of BTC's capital was acquired by Viva Ventures which paid EUR230MN.)The court based its decision on the thesis that state assistance is only existing when there are the following four preconditions - transfer of governmental or municipal funds to an economic entity, economic profit, selectivity, and influence on the competition. According to the supreme magistrates, the commission's conclusion that in this specific case there were no such preconditions is reasonable and consistent with the law. The condition for acquisition of a GSM licence is included in the BTC Privatisation Strategy, approved by the National Assembly on March 21, 2002 (before the applicants admitted to the competition were known). Therefore, there was no selectivity when the winner was chosen, the supreme magistrates claim.In turn, their decision on the value of the licence is based on the eight expertises provided for the purposes of the case. It is worth noting that the values in the different expertises varied from EUR5.6MN to EUR105MN. The highest valuation was given by American Appraisal which was hired by Todor Batkov, the lawyer of Bulgaria's first mobile operator MobilTel. According to the document, the value of the third GSM licence in a possible tender might be some EUR70MN - EUR105MN. The team from the University of National and World Economy (UNWE) fixed the price of the licence at BGN216MN. The third valuation was prepared by lecturers from the American University in Blagoevgrad. They estimated that the buyer, Viva Ventures, practically paid more than the fixed BGN54MN, because a part of the licence valuation is included in the amount paid for 65% of BTC. According to the Bulgarian analysts from Industry Watch, the value amounts to USD15.8MN with an option of reaching USD24MN. Diamond Cluster, entrusted to make a valuation by Viva Ventures, gave some of the most modest results. The price in its first expertise prepared in April 2004 was EUR20MN, while the one in the updated document varied between USD5.6MN and USD8MN. The expertise made by Deutsche Bank was presented to the antimonopolistic commission, too. The last to make an expertise was the Hungarian branch of the McKinsey consulting company. It decided that the market value of the third GSM licence was lower than the paid initial licence fee amounting to BGN54.1MN.The price paid is reasonable and is not an economic advantage that might harm the competition, because it corresponds to the economic conditions of the market at the time the licence was issued, the magistrates claimed. The decision of the SAC three members is to be appealed against before a superior instance within 14 days.

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