Mobile telecoms operators join forces to block Advent license

SOFIA (Reuters) – Mobiltel, Bulgaria’s largest mobile phone company, joined opponents to the recently concluded sale of former state fixed-line provider BTC yesterday by legally challenging a mobile phone license awarded in the deal. Following eight years of political and legal wrangling that delayed the sale, the government of former King Simeon Saxe-Coburg breathed a sigh of relief earlier this month when US equity fund Advent bought 65 percent of BTC for 280 million euros ($339.8 million). The sale is crucial to the poor Balkan state’s efforts to overhaul its Soviet-designed economy and liberalize its markets ahead of entry to the European Union, planned for 2007. Legal battles But in a continuation of thorny battles that have blemished Bulgaria’s investment image, Mobiltel and other opponents have attacked a license that BTC received – without a tender – to operate a digital mobile phone network, which was part of the sale. Mobiltel, owned by private Austrian investors and international banks, said it had filed an appeal with the administrative court. «The company was forced to take this measure to defend the interests of its shareholders,» said Mobiltel, which controls 75 percent of the Bulgarian market, in a statement. «The main arguments are the way (BTC’s mobile network) license was issued and the price, which give groundless advantage to the dominant fixed-line operator.» Other opponents The move follows a similar appeal by the only other competitor on the digital mobile market – Globul, which is controlled by Greece’s OTE. Bulgaria’s prosecutors and another firm, US-registered Taffeta Limited, have also attacked the license in court, saying it breaks competition rules. Legal experts and sources familiar with the process said the most likely outcome of the challenges is that BTC, which bought the mobile phone license for around 27 million euros, may have to make an additional payment to the State. Annulment unlikely But there is also a small chance that the court could annul the license, creating a standoff between the government and Advent, which agreed to buy BTC only on condition that it would get the permit. «It seems that the license being taken away is the least likely option. There is a small possibility the court can decide that some additional money must be paid,» a source familiar with the process said. Advent was not available for comment. Bulgarian media has said Globul and Mobiltel have lobbied hard against the BTC sale. The companies have denied this and said they did not fear a third operator on the market. The deal, Bulgaria’s most difficult and important sale of state assets ever, has become symbolic of the government’s struggle to lure investors through a gauntlet of procedural obstacles thrown up by opaque economic and political interests.