Банкеръ Weekly

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SAC RULES IN FAVOUR OF BTC GSM LICENCE

The establishment of the third local GSM-operator's network may already begin. On Wednesady (August 4) a 5-member team of the Supreme Administrative Court (SAC) rescinded the ruling of a 3-member instance as of July 15, by which the fulfilment in advance of the GSM licence of the Bulgarian Telecommunications Company (BTC) was suspended till the conclusion of lawsuits against its granting. SAC's ruling is final and cannot be appealed. However, this will not put an end to BTC's court saga this year. Decisive for its development were the appeals against the act of the Communications Regulation Commission (CRC) for realization in advance of the licence. Appeals were moved by the second local mobile operator GloBul and the US company Tafetta Ltd., unknown in Bulgaria. They insisted on suspending the implementation of the licence till the case was settled by court. CRC's decision was also appealed at the SAC by MobilTel. SAC's 3-member team stopped the fulfilment of the licence in advance with the motive that the case was referred to the Commission for Protection of Competition (CPC), which was to establish if its granting without a tender or a competition and with a 75% reduction of the initial licence fee was a subsidy from the State, and was it admissible if it was. SAC's 5-member team, however, appraised that the two companies' appeals were not admissible as they were not addressees of the act and it did not directly affect their individual, legally protected rights.In addition to unbinding the setting up of a third mobile network in Bulgaria, SAC's 5-member team returned the case for the issuance of the GSM licence to the same 3-member team of the court to consider it in essence. The supreme magistrates specified that when extending a ruling regarding the admissibility of appeals the court should take into consideration the obligatory instructions for application of the law. According to lawyers, this provision means that the three telecom companies (MobilTel, GloBul, and Tafetta), are not interested entities in granting BTC's mobile licence and their protests should remain without effect.Thus, SAC's 3-member team has nothing left but only consider the Prosecutor's Office appeal against the GSM licence. According to Deputy Prosecutor General Tsoni Tsonev, the CRC has violated the Constitution and the Telecommunications Act by granting a licence without holding a tender or a competition. It has not created conditions for impartiality, equal footing and transparency. Moreover, the contract for BTC's privatisation did not specify any price for the GSM licence. Numerous legal barriers threaten the case then. In the worst scenario - if SAC considers the protest of the prosecutors and suspends the licence, BTC will get back the BGN54MN it paid but will lose the right to build a mobile network. The regulation commission will have to announce a new tender for the third GSM licence in which BTC will compete on an equal footing with all the other candidates. But it seems that the already privatized telecommunications company is no longer bothered with this case. As soon as the five members of the SAC committee announced their decision, the managers of BTC expressed their satisfaction and commented in front of the media that they went on building Bulgaria's third mobile operator. CRC's Director Gergana Surbova declared in public she was satisfied with the legal decision, too.Apart from the case against the mobile licence, another proceeding has been initiated in the Supreme Administrative Court against BTC. It refers to the sale of the telecom. The first session of the court scheduled for December 7 will be held behind closed doors. The Supreme Administrative Prosecutors' Office and the Sofia-based Netplus company which filed the complaints will present their arguments against the decision of the CPC to allow the concentration between BTC and its buyer, Viva Ventures. In the meantime, however, the SAC declared that neither the complaints nor the fixed session might suspend the deal. Meanwhile, the anti-monopoly commission ordered an independent examination of the price paid for 65% of BTC and the respective GSM licence in order to find out whether or not there has been subsidizing from the state.Whatever the decision of the court, it will have no effect on the sale of BTC to the Vienna-based Viva Ventures, supreme magistrates commented for the BANKER weekly. In case there is evidence that the BGN54MN fee paid for the GSM licence is a form of State subsidy, BTC will have to pay additional money up to the size of its market price which is BGN216MN.

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