Банкеръ Weekly

Briefs

TERMS FOR BTC SALE WITHHELD

A week prior the deadline for submission of final offers for the purchase of the Bulgarian Telecommunications Company (BTC), both Bulgarian and foreign journalists are almost unanimous that the national telecom shall not be sold at any cost. This seems to be also the Government's official stance, reiterated during the last month by the Minister of Transport and Telecommunications Plamen Petrov and the Privatisation Agency's Chairman Apostol Apostolov.Next Tuesday (September 24) the candidate-buyer of a 65-percent stake of BTC's shares, which has offered the highest price, will become known. According to unconfirmed information, this will be the US investment fund Advent, which registered its Austrian subsidiary Viva Ventures especially for the BTC deal. Pundits claim that its bid will be within EUR400MN (for 100% of the company). Sources close to the Transport Ministry predict that the best offer will be that of the Turkish Koc Holding in a consortium with Turk Telecom, which is the Government's unofficial favourite. The US insurer AIG, which has announced its particiaption through its Poland-based fund for investments in Eastern Europe is not considered to have much chances. Predictions say that it will not submit a final offer or its bid will be USD100MN at the most. Thus, it will be automatically dropped out.The terms for the sale itself are the most important thing in this deal because they concern not only each one of BTC's almost 3,000,000 subscribers but also every Bulgarian household. The main question are the obligations of BTC's future owner regarding the so-called universal service (that is, the fixed telephones in homes and offices). The documents for the deal should clearly state what the telecom's new owner should do in each of the next three years at least: the exact number of new telephone lines to be installed, the replacement of the outdated analogue phones by digital, and the laying of optic fibre cables. Otherwise, apprehensions may come true that instead of installing new telephones in the end quarters of big towns or in rarely populated settlements, BTC's new owner will fulfill its obligations ... by publishing a telephone directory or installing a public telephone from where everyone could pay-free call a doctor, policeman, or fireman.The Government is also obliged to announce how much and at what conditions the telecom could hike the subscription fees and the tariff rates for city and intercity telephone conversations.The other big problem concerns BTC's transmission and relaying radio and television equipment, through which the programmes of all national electronic mass media (the Bulgarian National Radio, the Bulgarian National Television, bTV and Darik radio) are broadcasted. Most of the antenna and transmission equipment is so outdated and worn-out that it is good for scrap. But the services, offered through them are at quite high prices due to their low efficiency. Therefore, the Government should announce publicly the obligations of BTC's new owner regarding the replacement of old equipment and the tariff rates at which the Bulgarian National Radio and the Bulgarian National Radio will be paying for the telecom's services by budget money.The future transferrence of BTC shares, which its future owner will be allowed to effect, are also of huge importance. And as all three candidate-buyers are investment intermediaries, the future sales are inevitable. Therefore, the Cabinet should clearly announce at what conditions the new owners will be able to sell packages of shares and set an exclusive term within which the property cannot be transferred. Otherwise, it may turn out that persons who have become notorious in the last dozen of years are behind these investment intermediaries.

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