Банкеръ Weekly

Briefs

SHOTS AMIDST THE PHONE CABLES

It is obvious that the Bulgarian Telecommunications Company (BTC) has no intention to give up the lost monopoly without fighting. Trying to keep its dominating position on the market, the company expanded its lobbyist circle by adding not only former rulers and regulation directors, but also outstanding legal experts. The task of the circle as well as that of the executive management is to develop a strategy for elimination of the competitors, a member of the management told the BANKER weekly.
In fact, back last summer BTC accused its competitors of irregularly using its underground equipment and threatened to cut all cables that were not its own. A new tariff was calculated for using this equipment (including the underground one) in which prices grew several times. Cable operators witnessed a particular growth. They calculated that in order to fit in the new prices they have to raise their subscribers' monthly fee at least thrice. Economists in the branch warned that most of the alternative telecoms will definitely come out of the market. The injured complained in the Supreme Administrative Court and at the end of the summer the supreme magistrates decided that this service was to become regulated, too. Moreover, they decided that BTC would be obliged to launch it to operators at a price not lower than its cost price and without subsidies from other sources.
The protests and the forthcoming elections brought hush on the telecommunication field, but the exchange of shots continued in early autumn. Announcements appeared periodically that Orbitel, Nexcom, Spectrum net, etc. placed cables irregularly... and the pressure on the Communications Regulation Commission expanded so much the access to the forthcoming competitions for point to multipoint communications networks that BTC was allowed to take part, too. Even though, in theory, this type of telecommunications is an alternative to the fixed network of the national telecom and the European regulating authorities use it for liberalisation and expansion of the communications market.
This is what happened in Bulgaria eventually, too, although not owing to the regulation commission but to the BTC competitors. While trying to come untied from its monopolistic infrastructure, they raised the prices on both tenders so high that they broke all European and world records. The national company took part in the bidding, too, and managed to take one of the licences. However, the other four were given to its competitors. The situation following the first bid which the telecom left voluntarily was particularly drastic. A few hours after the winners were announced, BTC accused one of them of cheating in the mutual connection of their networks and replacement of the calling numbers. It was officially announced that Orbitel gained a possibility to transit international traffic as long-distance one and thus violated the Telecommunications Act and reduced the revenues of the national company. The alternative operator denied the accusations saying they would inform the Communications Regulation Commission and the antitrust commission about the telecom's attempt to cope with its competitors. A joint inspection by the regulators, Orbitel and BTC was initiated to examine the conflict.
The telecommunications company announced at the end of last week that the inspection that ended on November 15 confirmed their suspicions. A traffic of Orbitel subscribers to BTC was found out in which the alternative company used phone numbers of the telecom. The numerous manipulation cases represent a grave violation of the Mutual Connection Agreement signed between the two companies and also of the licence issued to Orbitel by the regulation commission, BTC managers announced. They threatened they would take the necessary measures to terminate the irregularities. To the interest of the consumers and the growth of the communications market, the agreement will not be terminated yet, they added - the sanctions were delayed until more violations of the kind are found out. The behemoth involved the authorities in the battle with Orbitel, too: The manipulation of numbers by another operator would impede the implementation of BTC's obligations related to tracing and catching the calls made by the Ministry of Internal Affairs authorities.
In turn, Orbitel's press release sounded joyful that BTC accepted the lack of fraud on the part of their company which was proven by the joint inspection. To Orbitel the matter remains purely technical and we are waiting for the regulator's instructions to the two companies, the release added.
The contradicting positions caused debates in the branch until the regulation commission put an end to them on November 21. It announced that Orbitel had not violated the mutual connection agreement signed with BTC, that the mistake in the identification of the calling numbers was not its fault, and that there were no financial damages caused by the manipulation of the numbers. Of course, both sides demonstrated willingness to solve the problematic issues and the errors in the calls are expected to be removed as soon as possible.
The next victims were Trans Telecom and Cablenet. The Communications Regulation Commission announced late on November 22 that BTC filed a complaint against the two companies to the Supreme Administrative Court and accused the national telecom of attempting to stop or detain the competition. It is curious that the Supreme Administrative Court was informed on Monday, a few hours after the regulation commission acquitted Orbitel, and the magistrates were asked to cancel the ranking in the tender for the two A point to multipoint licences. According to the regulator, the motives expressed in the complaint have no direct relation to the procedure and the results achieved on the licence tenders which were public, open and conducted under terms announced to the participants when acquiring tender documents. The procedure attacked before the court is identical to the B licence tender which BTC won. The supreme magistrates are still to announce their decision on the dispute, but the Communications Regulation Commission already said it decided to issue individual A class licences to the winners in the tender, Trans Telecom and Cablenet, each of which paid BGN5,044,000.
The Bulgarian Telecommunications Company informed last week that in accordance with the decision of the supreme magistrates taken last summer they provided the regulator with the new plans for launching services through which the joint use of its infrastructure (rooms, equipment, towers, etc.) is implemented. The telecom managers hold the opinion that the equipment competitive operators place is of different type, size and shape and it is not fair that they pay the same price regardless of the space occupied. Besides, BTC specified that the discounts to mobile operators would be removed and the sites of the company were divided in three categories according to their accessibility, reserved electricity supply, serving staff and security guard. The price for using them will be formed according to the volume of the occupied space and the amount for external sites will depend on the type and size of the equipment installed.
The objections against BTC's new tariffs will probably be numerous. Interested parties have to deposit their opinions no later than November 25 and then the document will be discussed in public.

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