Банкеръ Weekly

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CPC BUSY WITH EXPERT EVALUATIONS

THIRD GSM LICENCE PRICE BETWEEN EUR 5.6-105MNFor a third time in succession the Commission for Protection of Competition (CPC) did not voice its stance if there will be State assistance for granting a GSM licence to the Bulgarian Telecommunications Company (BTC) for BGN54MN (i.e. 75% less than the initial licensing fee). At the meeting on Tuesday (November 2) most of CPC's members asked to get acquainted with the report on the price of the third GSM licence, prepared by the Hungarian branch of the McKinsey consulting company. It was deposited in the CPC a day before the meeting. Our ambition is to make our stance public as soon as possible, but we should honour all parties' requirements to get acquainted with McKinsey's conclusions, CPC's Chairman Petko Nikolov explained. This is practically the eighth independent expert evaluation of BTC's GSM licence. Has the telecom paid much or little for the right to be the third mobile telephone operator in Bulgaria? It turns out that question has many and contradictory answers, depending on who replies. Different expert evaluations vary from EUR5.6MN to EUR105MN. The highest price is in the report of American Appraisal, ordered by Todor Batkov, lawyer of the first GSM operator in Bulgaria, MobilTel. According to that document, the initial price of the third GSM licence could reach EUR70MN to EUR105MN at the eventual tender.The team of the University for National and World Economy has appraised the licence at BGN216MN according to standard specifications.The third evaluation was made by lecturers at the American University of Blagoevgrad. According to them, Viva Ventures has practically paid more than the fixed price of BGN54MN because part of the licence price was included in the amount, paid for 65% of BTC. According to the Bulgarian group of analysts Industry Watch, the licence price is USD15.8MN, with an option to reach USD24MN. The fourth expert evaluation claims also that if Viva Ventures has paid more than the fixed price, there could be no State assistance. The lowest appraisal was that of Diamond Clusters, ordered by BTC's new owners, the Austrian company Viva Ventures. The first expert evaluation as of April appraised it at about EUR20MN, while the updated evaluation is between USD5.6-8MN. The CPC has also received an expert evaluation by Deutsche Bank, whose report accompanies the BTC's privatisation documents.The only appraisal, ordered by the Commission for Regulation of Telecommunications (CRT), was made by the American University of Blagoevgrad. Mr. Nikolov's team, however, did not like that evaluation and returned it to the economists with a recommendation to correct it. According to the updated version, the thirst GSM licence should cost between BGN90-145MN.CPC will consider the eight expert appraisals by November 11. The postponement by about ten days will be hardly sufficient for CPC to examine in detail the heaps of market analyses and arguments. It is still more uncertain which of the many evaluations would be preferred and how would CPC's members deal with the arguments for the huge price range. We'll compare the conclusions in all expert appraisals and we'll judge if they are well-grounded and supported by real proof. We might accept some conclusions of a certain evaluation and reject others. We could also combine some of the conclusions of one evaluation with part of another one, CPC's Chairman Petko Nikolov said. CRT has picked MobilTel as an operator with a significant influence on the market of telecom networks. The decision is due to the 82.7% of the market segment which MTel holds. The respective share of GloBul is 15% and that of Mobikom - 2.3%, CRT has announced. The Telecommunications Act stipulates that an operator holding more than 25% of the respective market segment is obliged to link its network with all other participants on the market on their demand, under terms set by the law. CRT won't be exerting control on prices for effecting the links and on the prices for mobile telephone services to end consumers, CRT specifies. The currently effective legislation does not contain provisions for regulation of mobile telephone prices, independently if the respective operator has a significant influence on the market or not.

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