Bulgaria's Commission on Protection of Competition (CPC) said on January 19 2010 that it would allow Bulgarian local Spectrum Net to acquire domestic peer Orbitel in a deal worth five million euro.

Both companies compete on the same market – fixed-line phone service, internet service access, data transfer and voice-over-internet-protocol (VoIP) services, CPC said in a statement.

The merger would lead to better quality of service and lower costs from the synergies existing between the two companies, according to the brief the two companies filed with the regulator.

Vivacom, the former state fixed-line monopoly, has 96.1 per cent market share, by subscriber base, on the fixed-line segment. The merger of Orbitel and Spectrum Net would strengthen competition on the market, with the final result of better-quality service at lower prices for the customers, CPC said.

The deal would not have a negative impact on the telecoms market, the regulator said.

The two telecoms, both set up in 1997 to challenge Bulgarian Telecommunications Company, now called Vivacom, plan to merge operations and expect to report 20 million euro in revenue and a gross profit of five million euro in 2010.

Orbitel's previous owner Magyar Telekom, itself a unit of Deutsche Telekom, will take a hit on the sale of Orbitel, having bought the company for for eight million euro. Deutsche Telekom indirectly controls Bulgaria's second-largest mobile operator Globul, part of Cosmote, the mobile unit of Greek Telecoms group OTE, in which Deutsche Telekom owns 25 per cent.