United Group before Money.bg: While A1 is partnering with Netflix, Vivacom is trying to save a national operator

The extramural skirmishes continue in full force in the telecom sector in our country after the biggest reshuffle in its modern history. After two of the three main players in the market – A1 and Yettel – announced against the acquisition of Bulsatcom by the United Group, the owners of Vivacom answered them.

In front of Money.bg, the group rejected the accusations of its competitors for covert acquisition of the company in order to establish a dominant position. They also made their own – for spreading a wrong assessment of the market and trying to establish a dominant presence in the TV market through a partnership with a global streaming giant.

It seems that the good tone between telecoms in our country will not return soon.

The background

At the end of September last year, the businessman Spas Rusev (who earlier sold Vivacom to United Group and then remained in charge of the company) acquired “Bulsatcom” for over 120 million euros.

The supplier has been struggling for years over its ambitious project for its own satellite. However, at the time of the transaction, it was the leader in the TV market in our country and an important factor in the fixed Internet.

Already at the beginning of December 2022, from a presentation of the report of United Group, it became clear that the group financed the transaction, receiving in exchange the base stations and the optical network of Bulsatcom.

The owner of Vivacom admitted that he financed Spas Rusev for “Bulsatcom”

The telecom will acquire the company’s base stations and optical network

The remaining major players on the Bulgarian telecom market – Yettel and A1 – then declared against the change of ownership precisely on the grounds that it was a hidden acquisition. The CPC never ruled until November 9, when United Group announced plans to buy Bulsatcom.

A new leader in the TV market in our country

IPTV is displacing satellite, home internet via 5G is seeing great growth

Meanwhile, Vivacom has become the leading provider of digital television in our country.

Two independent operations and one wrong assessment

At the beginning of the week, in two separate positions, Yettel and A1 announced that they would challenge the deal in the CPC on two main grounds:

• The acquisition would give Vivacom control of over 60% of the television distribution market and over 40% of Internet access;
• The deal is part of a multi-step combination that began with the appearance of Spas Rusev as a buyer.

From A1 Bulgaria, they were more extreme, calling the actions of United Group “inadmissible arrogance” and Spas Rusev – a “proxy”, and the actions of the institutions in our country were defined as “indecisive behavior”.

“Unacceptable arrogance”: Vivacom’s competitors attacked the Bulsatcom deal

A1 accused CPC of indecisiveness, together with Yettel will challenge the acquisition

“We have already commented several times that the United Group loan did not give any control over the ownership or management of Bulsatcom. We made the decision to acquire Bulsatcom a few months ago. These are two independent operations separated in time.” , United Group responds to a question on the subject, sent by Money.bg.

The owners of Vivacom do not agree with the statement that they will have a 60% market share in the distribution of television, if the CPC allows the acquisition of “Bulsatcom”.

“This assessment of the market share is wrong and does not reflect the entire TV content distribution market (…) According to KRS data, there are 244 Bulgarian TV operators and over 450 Internet providers operating in the country. Most of the international content streaming giants such as Netflix, HBO, Disney+, Amazon and others, which have virtually unlimited resources, are also present in the country. In addition, there are independent studies that clearly demonstrate the existence of significant piracy and under-reporting of subscribers,” explained the United Group.

However, their response does not contain a comment on the situation we will see in the fixed internet market after a possible deal.

Contra

“We would not like to comment on the reactions of our competitors” is the answer of United Group to the question of Money.bg how they will comment on the definition used by A1 for the deal – “unacceptably arrogant”.

At the same time, the owners of Vivacom note that it is A1 that recently announced a partnership with Netflix in our and several other markets. In Bulgaria, the streaming platform will be a free addition to the most expensive television subscription of the telecom, but it can also be added to other existing services or paid for separately.

“This is a clear attempt to establish a dominant presence in the Bulgarian TV distribution market and illustrates the growing power of international OTT platforms in this market. While A1 is partnering with this global giant, Vivacom is trying to save a national platform operator,” they said. from United Group.