Банкеръ Weekly



The two weeks that have past since April 4 when the second attempt for the privatisation of the Bulgarian Telecommunications Company (BTC) started, seemed to have proved the gloomest predictions about the deal's development. Instead of the 13 candidate-buyers of BTC, expected by the Ministry of Transport and Telecommunications, only two or three serious intentions have been expressed so far.There are no representatives of the Old Continent among them. And there will hardly be any. The Deputy Minister of Transport and Telecommunications Nikola Nikolov motivated the lack of interest on their part by the huge expenses - about EUR100BN - paid by the telecoms in Europe for getting UMTS licences. Later on, it turned out that they have overestimated their possibilities. For that reason it is not very likely that a big European company would show interest towards the BTC. Almost every national telecom in the Old Continent has accrued debts of several dozen billion euros. Thus, the big question in front of them is not where to invest new hundreds of million euros but how to go out of the crisis. So, neither Germany's Deutsche Telecom (whose liabilities exceed EUR60BN), nor Spain's Telefonica or Hungary's Matav, would be among the eventual buyers of BTC. The policies of Matav, which is the most successful telecom operator in the countries of the former Eastern bloc, to a large extent depend on the German Deutsche Telecom, whose interest towards our part of the Balkans is presently nil.The Greek national telecom OTE, which was until recently considered to be the most probable (and ambitious) candidate-buyer of BTC, does not intend to take part in the contest at all. Pundits in the branch point out as a most probable reason OTE's new company policies, undertaken by its entirely new managerial team. The replacements were made a month ago, almost immediately after the consecutive corruption scandal broke out in Bulgaria's southern neighbour country. This time it was connected with the tender for the second Bulgarian GSM-operator, won by the Greek company in end-2000 at the price of USD135MN. Telecom Italy was OTE's major rival then and dropped out of the bidding at the level of USD130MN. According to inofficial accusations, a decisive role for the Italians' withdrawal from the competition was USD10MN-plus, given by OTE representatives as bribes. However, it was not made clear who gave and who receieved the bribes. No personnel changes have been made in Telecom Italy so far. But OTE has a new managerial team and Bulgaria's telecom infrastucture is not among its priorities.A week ago BTC's former head Marian Dragostinov recommended that buyers for the telecom should be sought overseas and proposed to promote the BTC in the USA. About a year ago the US telecom companies left the European market. How big is the chance now that the US telecoms would make a small investment in a country like Bulgaria?, Deputy Minister Nikola Nikolov asked in turn. The Balkan region and the Bulgarian telecom infrastucture cannot offer anything to the serious US companies. They might be only interested in the contract for BTC's operation and management, at that against dozens of million US dollars annually.The possibility for an almost unkown investment fund - registered as an offshore company or managing money of eastern origin - to appear among the thinning row of BTC candidate-buyers should not be ruled out. The fund will most probably appear as a consortium, hidden behind a renowned Western telecom. We may also expect an aggressive campaign in mass media, discretely stressing on the prestigious name in the telecommunications branch. Discreteness in this case is necessary because the world-famous company will practically have no participation whatsoever in the consortium. There will be only an agreement for joint operation, presented by the unknown investment fund as top secret. Such a scenario is expected by people, acquainted with the labyrinths regarding BTC's sale, who refused to name not only the exact origin of the Eastern capitals, but also their eventual partner. Under the confidential clauses of the document, the investment fund will pay the entire amount and will be BTC's real owner, while the renowned company will manage our national telecom. This of course, will be against payment, agreed in advance within the interval of 7.5% and 10% of BTC's accounting profit (its proceeds prior payments of interest, taxes and depreciation allowances).The attempt to attract one of the most powerful telecommmunication companies in the world - China Telecom - as a potential buyer of BTC, also failed. But Beijing wants to sell to our telecom technological equipment - telecommunication exchanges, hubs, optic cables, etc. - which are produced in China at a high technological level (commensurate with that in Europe), but at much lower prices. In fact, China has been trying to set foot onto the Bulgarian telecom market since 1998 when the Chinese Government donated to our country a telecom exchange, produced in the Far East. Its indices proved to be commensurate with those of the best world manufacturers, BTC experts claim.Eastern capitals are the only ones, which have so far shown real interest towards BTC. The first ones are from Ankara, more specifically - from the 100% State Turkish company Turk Telecom. Its experts are currently carrying out preliminary financial and economic analyses of the BTC. Our southeastern neighbour country expressed interest towards the Bulgarian telecommunications infrastructure back in 1999 when the state-run Turk Telecom jointly with the private mobile opeartor Turk Sel bid in the tender for the second GSM-operator. In the present case, however, we may rather speak about geopolitical than economic interests, as by acquiring the BTC, the Turkish Government will also become an owner of the trunks, relaying a considerable portion of the telecommunications traffic between Europe and Asia. NATO may appear as Turkey's ally in this case, because it matters for the Alliance where the telecommunications traffic through the Balkans is controlled from - Ankara or Moscow.Moscow's System is the other candidate-buyer of the BTC. The interests in this case are also mostly geopolitical. Here, however, preliminary commitments edge in, at that at a sufficiently high level of Bulgaria's hierarchical structure. Compared to that, the scam regarding Bulgartabac may seem a gale in a glass of water.

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