Bulgaria’s leading landline phone service provider Vivacom, the former state monopoly Bulgarian Telecommunications Company (BTC), said on April 7 that it sold 50 per cent in re-broadcasting unit NURTS to Mancelord Limited, a company that Vivacom described as an "international financial investor".

The deal is subject to approval by the Commission on Protection of Competition and the Communications Regulation Commission.

Vivacom and Marcelord would hold equal stakes in NURTS and the main priority of the joint venture would be the development of the company’s re-distribution network, "turning the company into a competitive player on the digital rebroadcasting market in Bulgaria," Vivacom said in its statement.

NURTS would use the additional financial muscle provided by Mancelord to "develop modern innovations in its digital infrastructure".

"NURTS needed a financial investment that would help us accomplish our strategic investment programme concerning the introduction of digital broadcasting of TV and radio signals," Vivacom chief executive Bernard Moscheni said in the statement.

Investment vehicle?
Vivacom did not disclose who the shareholders in Mancelord were, but said that its representative in Bulgaria was a limited liability company, Bromak, whose main shareholder was Corporate Commercial Bank (CCB).

Vivacom did not disclose the value of the deal either, although Bulgarian-language news website mediapool.bg speculated that Mancelord would pay upward of 50 million euro.
Austria’s Oesterreichische Rundfunksender (ORS), which twice bid to buy NURTS entirely, reportedly offered 80 million euro.

The deal first fell through in March 2009, with the deal reportedly agreed at political level and all but sealed, but it was scuppered at the last moment by policymakers, with a proposed amendment that banned content providers from offering re-broadcasting services.

ORS, a joint venture between Austria’s public television channel ORF and banking group Raiffeisen, would thus not be allowed to hold a rebroadcasting licence.

Media reports suggested that it was a concerted effort by the socialist-led government to set the stage in such a way that would give an advantage to specific business interests when it came to the construction of the infrastructure for the digital rebroadcasting of TV and radio signals.

In particular, the reports said, it was business interests close to the predominantly-ethnic Turk Movement for Rights and Freedoms (MRF), then a partner in the tripartite ruling coalition and now in opposition, that were set to benefit the most.

Proponents of that theory are likely to view the sale of the 50 per cent stake to Mancelord as another argument in favour of their position, given that CCB has funded the acquisition spree that saw New Bulgarian Media Group acquire several central and regional dailies over the past year. MRF MP Delyan Peevski, controls the group together with his mother Irena Krusteva, the former head of the State Lottery.

In November 2009, when the Government of Prime Minister Boiko Borissov was reported to be considering overturning a number of amendments to the communication laws passed by the tripartite coalition, ORS said that it planned to renew its bid for NURTS.

Leg up
Currently, only NURTS can broadcast analogue TV and radio nationwide, forcing media and telecoms to use its equipment where they do not have their own. That includes public television BNT, public radio BNR and private channels Nova Televiziya and TV2, among others.

NURTS has 800 re-broadcast points throughout the country, including an experimental multiplex where multiple channels are compressed to fit in one digital broadcast frequence, and employs 500 people.

Despite its antiquated infrastructure, NURTS is in the best position to switch to broadcasting a digital signal, especially compared to start-up companies, and have it reach the widest audience quickly.

Its owner will have an advantage in the transition to a fully-digital TV and radio signal broadcasting. NURTS has already been developing an experimental network using the DVB-T standard, picked by the European Union and the rest of Europe as the standard for the broadcast transmission of digital terrestrial television.

Bulgaria must complete its transition to fully-digital TV by the end of 2012, the same as the rest of the EU, but has been lagging with implementation, raising the prospect of missing the deadline, which could in turn prompt an infringement procedure from the European Commission.