2024-02-17 17:09:27
After it became known on February 1 that the Commission for the Protection of Competition (CPC) had allowed “Vivacom” to acquire “Bulsatcom”, today the decision itself was published on the website, in which the reasons for this can be seen. It is not clear from the text which committee member voted how. Unofficially at the beginning of the month it was said that one had abstained and the others had agreed.
From the cited data, it can be seen that the CPC accepts the size of the market share of the participants in the transaction and of their main competitors – A1 and “Yetel”, not those of the Commission for the Regulation of Communications. According to her, “Vivacom” and “Bulsatcom” together have a little over 50% market share of retail television services. However, in its study, the antimonopoly commission states that according to NSI, the number of pay TV subscribers is different – 2,496,517, which is 422,931 more subscribers than indicated in the 2021 report of the Commission for the Regulation of Communications (or a difference of 20.4 %).
The KPC also refers to data and analyzes by Ernst&Young and Bmedia, according to which the total market share of the two operators is slightly over 40%, and not over 60%, as claimed by KRS.
The Antimonopoly Commission does not believe that after the transaction there will be pressure on the other direct competitors – A1 and “Yettel”, because “Vivacom” owns the physical infrastructure that cannot be duplicated, such as raising the prices for access to it. “Yettel” expresses such a concern in its position to the CPC, stating that from January 1, 2023, “Vivacom” unilaterally increases its prices for access to the underground channel network by 25%, and from September 1, 2023 – additionally by more 18%. After the acquisition of the infrastructure and optical network of Bulsatcom, this pressure will intensify, the operator predicts.
However, the Commission for the Protection of Competition considers that the Commission for the Regulation of Communications has sufficient levers to control this matter through the Act on Electronic Communications Networks and Physical Infrastructure. According to her, this is “an effective guarantee for access to physical infrastructure under the conditions of equality, transparency and cost conditioning”.
Yettel’s position also states that given the market position of Vivacom in the retail markets of television program distribution and Internet access through fixed networks after the transaction, the most significantly affected will be the package services in which includes a mobile service bundled with Internet access and/or distribution of television programs via a fixed network. Therefore, there are fears that this transaction will multiply the portability of mobile telephone service subscribers to the Vivacom network and will significantly weaken the positions of other participants in the mobile services market.
However, the information collected by the CPC during the television market research gives it reason to believe that BTV is an equal competitor to “Nova Television” on the market under investigation, and according to the data for the analyzed period, they exert constant competitive pressure on each other.
According to the commission, if access to Nova’s television channels were to be restricted, the economic groups to which the main competitors A1 and Yettel belong would probably also take countermeasures. As a counter-reaction, A1 may deny Vivacom/Bulsatcom access to the Max Sport channels, and the PPF group (which includes Yettel and BTV) may deny Vivacom/Bulsatcom access to the BBC channels.
“Given the above, the commission comes to the conclusion that as a result of the planned transaction, the acquiring group would not have the opportunity to limit access to its channels,” the decision states.
The Commission considers that, once the transaction is completed, the new merged entity would have neither the opportunity nor the incentive to deny distribution to competing television channels.
The Antimonopoly Commission does not accept the claims of BTV and “Yettel” that the planned concentration would allow the consolidated group access to confidential commercial information of competitors up and down the chain. The Commission respects the arguments of “Vivacom” on this matter, that within the acquiring group there is already a vertical integration between “Vivacom” and “Nova” and the same will not be the result of the current transaction.
In addition, on the Bulgarian market, the company “A1 Bulgaria” has also integrated the activities of a television operator and a platform operator for many years (at the same time within the same company – “A1 Bulgaria” EAD), without such integration having led to significant obstacles for effective competition (due to access to information or for other reasons). An analogous possibility of access to confidential information of “Vivacom” and/or “Nova” also exists in the intra-group relations between BTV (as a creator of television channels) and “Yettel” (as a provider of retail pay TV), the commission points out.
Up to 14 days, the decision can be appealed before the Administrative Court – Sofia, writes “Dnevnik”.
The Bulsatcom employees are against the deal, and they have been claiming for months that even before the deal was approved, Vivacom was stealing their customers. Analysts commented that the commission’s ruling on this case was too quick given its practice in other cases. The Institute for Market Economy, for example, points out that the decision comes after a study that lasted less than a calendar month. The co-chairman of “We continue the change” Kiril Petkov demanded an urgent replacement of the composition of the CPC, whose mandate has expired.