Банкеръ Weekly

Briefs

ALTERNATIVE OPERATORS DEMAND BGN1.1MN FINE FOR BTC

The Electronic Media Association (EMA) whose members are some of the biggest licensed operators in this country will appeal against the recent decision of the Commission for Protection of Competition (CPC), levying two fines - of BGN30,000 and BGN70,00 - to the Bulgarian Telecommunications Company (BTC) for abuse of dominant position. More specifically, the violations are connected with the imposing of a price pressure when giving unbound access to the subscriber network, or the so-called last mile.
Alternative operators are satisfied with the decision of the antitrust commission, but the size of the fine is small according to them and will appeal against that part of it. Their argument is that the same fines are levied on sole traders for unfair competition, while BTC's net profit for 2005 alone exceeded BGN113MN. EMA insists for imposing the maximum sanction for the two violations, totalling BGN1.1MN.
The Executive Director of Orbitel and Deputy Chairman of the company Nikolay Gorchilov specified that abuse of dominant position in Western Europe is sanctioned by millions of euro, pointing as examples two fines imposed on Telecom Italy, amounting to EUR156MN and EUR60MN respectively.
Teodor Zahov, Executive Director of Spectre Net believes that the damages for the alternative operators and consumers, resulting from BTC's abuse of monopoly by far exceed the fine, levied by the CPC. The practices used by the telecom influence adversely the liberalization of the domestic telecommunications market for which we are being criticized by the European Commission, Mr. Zahov noted. According to him, BTC's violations are not yet treated as repeated (for which higher fines are imposed) as they have not been confirmed by court. The other problem is that they are made deliberately which according to EMA deserves higher sanctions.
CPC's stance with the decision reads that through its behaviour the national telecom indirectly hinders the realization of an important political aim and that the company's conduct is a purposeful strategy for delaying the entrance of competitors on the respective market, which further strengthens the public danger from the violation. EMA's position is that the terms for access to the last mile, imposed by the BTC, do not allow alternative operators to provide to their consumers telephone services and ADSL packages for high-speed INTERNET. The telecom offers two kinds of access to the last mile. In the case of the so-called shared access the alternative operator provides INTERNET and the BTC - the telephone line, while in the case of the complete access the competitor provided both services. In the first case the national telecom gets from the other operator BGN18 per month, while for the complete access gets BGN26. The research carried out by the CPC shows that in both types of access the wholesale prices of services are higher than retail prices, i. e. there is a price pressure. Moreover, their absolute prices are 3.3-fold higher than the average for the EU market.
That is the sixth sanction imposed on the telecom since its privatisation in 2004. In April 2006 the CPC fined it to pay BGN300,000 for limiting the access of other telecommunication companies' to a population centre's network. A month earlier the BTC was fined by BGN100,000 for unfair trade terms when offering INTERNET access through a fixed telephone network. Similar sanctions were imposed to BTC in 2005 as well. Their aggregate amount is BGN775,000. However, the telecom has not paid a single lev yet because it is appealing against each decision of the CPC. EMA members are adamant that when all possibilities in Bulgaria are exhausted, they file an appeal against the BTC to the European Commission.

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