SOFIA – Bulgaria’s sale of state telecoms firm BTC faced a potential fresh setback yesterday after prosecutors suggested, late on Wednesday, that part of the deal, involving a third digital mobile phone license, was unconstitutional. The Bulgarian government signed a contract to sell 65 percent of BTC to US private equity fund Advent for 230 million euros ($283 million) in February, after two years of political rows and legal challenges from opponents of the sale. To close the deal, it must find a way to sidestep recent legal changes that prevent it from giving BTC the country’s third GSM (Global System for Mobile communication) license without calling a tender. Last week, the government gave the state telecoms watchdog the go-ahead to issue the license, but prosecutors said on Wednesday that doing so would break constitutional norms on competition. «A constitutional principle has been breached… the principle under which the Constitution guarantees all citizens and legal entities equal conditions for economic activity,» the prosecutors’ office said in a statement. The sale, Bulgaria’s second attempt to sell BTC, has become a closely watched yardstick of the business environment in the country, where several privatizations have been badly delayed or derailed by political wrangling and legal maneuvering. If it falls through, it would unsettle foreign investors and could torpedo the Balkan state’s chances of earning a long-sought rating upgrade this year. The watchdog office is awaiting rulings from anti-monopoly authorities and the Telecommunications Ministry before making a decision and has said it needs at least another month to consider whether it should grant the license. The prosecutors’ recommendation, which was delivered to anti-monopoly officials, cannot dictate the outcome of the telecom watchdog’s eventual decision on whether to grant a GSM permit, but it could be a precursor to a legal challenge. Local media speculated that Bulgaria’s two existing GSM operators – Mobiltel, owned by private Austrian investors and Globul, owned by Greece’s OTE, could challenge the granting of a license in court. In 2000, the previous government rejected a bid of $610 million for 51 percent in BTC by OTE.