Allegations were made last week against Vivacom, a Bulgarian telecommunications company owned by United Group, by A1 and Yattel. The Bulgarian Commission on Protection of Competition (CPC) had granted Vivacom permission to acquire Networks-Bulgaria and several other smaller Bulgarian telecoms, sparking concerns within the industry.
A1 and PPF are contemplating taking the matter to the European Commission, while United Group has yet to publicly address the grievances. However, Vivacom firmly denies the allegations made by A1 and Yettel, its competitors. Vivacom describes their statements in response to the CPC’s decision to approve Vivacom’s acquisition of Networx and Telnet as irresponsible and filled with inaccuracies and misleading claims.
The Bulgarian fixed broadband and pay TV market is a vibrant and competitive space, featuring three national operators and numerous regional and local players. Currently, Vivacom holds a 31% market share in fixed broadband and a 33% market share in pay TV in Bulgaria, based on subscriber numbers. A1 and regional and local players hold 28% and 35% of the fixed broadband market, respectively. Vivacom continues to face strong competition in relevant regional markets, particularly in northern Bulgaria.
Comparatively, in Southeast Europe, Deutsche Telekom dominates the fixed broadband and pay TV markets, holding over 60% market share in Croatia and over 50% in Greece through its controlling stakes in local incumbents. It is worth noting that A1 has not expressed concerns about its dominant position in Austria, where it possesses nearly 50% of the country’s broadband subscribers. Furthermore, neither A1 nor Yettel have lodged complaints in Serbia, where United Group’s operator (SBB) has consistently been denied entry into the mobile market.
The coordinated statements from A1 and Yettel are deemed misleading and contradictory to the CPC’s findings. Their joint attempt to include Bulsatcom as part of Vivacom’s market share is completely inaccurate and suggests collusion.
Vivacom has been steadily gaining market share through organic growth by providing innovative products and delivering a superior customer experience. Since United Group acquired Vivacom less than three years ago, they have invested 3.5 billion BGN in the Bulgarian market. Vivacom’s recent growth has been fueled by substantial infrastructure investments and the introduction of superior products such as Eon TV, a 10 Giga fiber optic network, and 5G mobile unlimited plans. Over the past two years, the quality of services and products in the Bulgarian telco market has significantly improved, leading to increased competition.
The CPC conducted an exceptionally thorough review of Vivacom’s cases, undertaking a forensic analysis of the facts, resulting in a comprehensive 104-page decision. The level of detail in the CPC inquiry exceeds the norms for Bulgarian competition matters and adheres to best practices within the European Union. Vivacom actively cooperated with the review, responding to numerous questionnaires from the CPC. They also submitted detailed reports on both transactions, prepared by NERA Economic Consulting, a renowned international expert in merger control.
