Банкеръ Weekly

Briefs

PRICES OF CONVERSATIONS WILL CONTINUE TO GO DOWN

Mr. Lioupis, a month ago the Bulgarian Telecommunications Company (BTC) sent letter to GloBul and MobilTel, appealing to them to amend by September 15 the currently efficient contracts for mutual connection and make equal the wholesale prices of calls from fixed to mobile networks with those between mobile networks. The deadline is near and perhaps you already have an answer to the telecom's requirement.
- Such an agreement is usually made through the Commission for Regulation of Communications because there are certain rules that should be observed. We've managed to reach an agreement and have recently signed a contract with the regulator which was backed by all mobile operators on the Bulgarian market. It projects gradual reduction of prices for mutual connection and by July 2009 they should drop by 45% from their current value.
MobilTel has already moved to the Commission for Protection of Competition (CPC) two appeals against the BTC in which they claim that the telecom violates the Protection of Competition Act by binding services which are independent of each other and that practically results in cross subsidizing between it and Vivatel. Do you think there are such violations?
- We know about those offers of BTC and we were quite surprised when we saw them. Cross subsidizing is allowed nowhere in Europe. Therefore we moved an appeal to the CPC as we think that such a conduct is not fair play. In order to be sincere, it's strange that the regulator has not undertaken any actions to settle the matter. They are obviously considering very carefully what their reaction should be.
Portability of numbers was one of the most discussed issues in the domestic telecom branch in the beginning of the year. Now, five months later, could you summarize what has GloBul won and lost from the introduction of that procedure?
- Quite a few clients have so far availed themselves of the opportunity to go to the another mobile operator and there are reasons for that. It's not a secret that we very strongly supported the introduction of the procedure for the change of numbers. Together with Vivatel we wanted the change to be made by a visit of clients to a single shop as we thought that was the easiest way. But we met an exceptionally strong opposition on the part of MobilTel. Ultimately, in order to start the procedure anyway, we made a compromise and agreed that the change would be made by visiting two stores. Otherwise, Bulgaria was facing extremely severe sanction on the part of the European Union due to the delay. But still when we agreed we warned that we would insist to revise the entire process and discuss the rules from the beginning if problems would arise. And the difficulties are already a fact.
We have requested the CPC to take measures as we receive many complaints from clients that our archrival MobilTel hinders portability, mostly by the clause for automatic prolongation of contracts. Thus, the subscriber cannot change his operator because if he cancels his contract he has to pay a huge punitive fine. We insist that the regulator considers not only MobilTel's practices, but those on the entire telecom market as well. Otherwise, we'd be forced to undertake the same actions and protect GloBul's interests, i.e. we'll also introduce automatic renewal of contracts. It will be valid for new subscribers only and will become a a fact in a year at the earliest, but we will inform the people in advance about their prolongation. We have acquainted the CPC with those intentions of ours although we hope things wont's necessarily go that far.
In Western Europe it's a normal practice to offer clients handsets at a token price when signing a contract. Are you considering anything of that kind?
- The average price per minute of conversation in Bulgaria is quite low and is below the average in Europe. The same holds true about the proceeds from a subscriber. Nevertheless, GloBul already offers very cheap handsets. On resigning a contract, depending on the tariff plans and some other parameters, we offer mobile phones almost as a gift.
What new services and products will GloBul launch?
- Usually, such things are not talked about in advance, but I'll tell you that the company has undergone a considerable development as compared to the products and services it offered a few years ago. We follow very closely what's happening in the world and we think we are in line with the latest tendencies. Now we even offer the Talk2Me service which is new even for most Westeuropean mobile operators. It makes possible to leave a multimedia message which is received in the form of an audio or video file if the subscriber does not answer the call. We also offer services for transfer of data and the interest towards them is increasing.
In what direction will the telecom sector in Bulgaria go as a whole? Will the prices of conversations be going down or will they remain at the present levels?
- After GloBul stepped onto the Bulgarian market as the second main player, prices are constantly going down. I don't believe phone calls would be cheapening at the pace they have been going down so far, but having in mind that the prices of mutual connection will be reduced, the only direction tariffs will be moving is downwards. The same holds true about the roaming, the more so that tariffs there are a priority of the European Union. In fact, still a year ago we introduced such prices for roaming which other providers of GSM services are introducing now. I believe the reduction of prices is to the benefit of both clients and operators, as the latter gain from the increased traffic. There is already talk about regulation of prices of GPRS and messages, but GloBul has very competitive prices for them and even if certain ceilings are set we'll be still offering our services at prices below them.
Do you think there is enough space on the Bulgarian market for a fourth GSM operator?
- I don't think there are many opportunities for a fourth GSM operator to step onto this market. That was proven by the failed tender a month ago for granting a licence. Of course, if someone insists on entering the market we are ready to face the competition, although it will be very difficult for that new operator.

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