Bulgaria Vivacom to Invest BGN 600 M to Expand NetworkBusiness | June 22, 2011, Wednesday // 18:16| views
Vivacom CEO Bernard Moscheni. Photo by Sofia Photo Agency
Bulgarian telecoms operator Vivacom plans to invest BGN 600 M over the next three years to develop its fibre-optic internet network and improve its services, the company said.
Currently the company is the largest ISP in Bulgaria with over 350 thousand ADSL subscribers. According to the company CEO Bernard Moscheni that gives the company a market share of 26-27% in the country.
Vivacom has opted for Fiber to the building technology, or FTTb, which means that the company chose the active fiber optic infrastructure, which goes to the building in which the users live. The maximum achievable download bandwidth is 100 megabits per second.
The company's main rival in the sector is Bulgaria's first and biggest mobile operator M-Tel, part of Telecom Austria Group, which wrapped up the deal for the acquisition of cable operators Megalan Network and Spectrum Net in the middle of January this year.
Vivacom dominates the fixed-line segment in the country with 2.9 million phone lines, which accounts for 97% of the market, but it has been losing customers at an alarming rate in recent years, due to the spread of mobile communications and alternative telecoms in the country.
The company will begin to expand its network from Sofia and plans to stretch over 3000 km fiber optic only within the city. To this end it will invest about EUR 92 M by the end of the year in a bid to cover about 90 thousand households in Sofia and two other Bulgarian cities.
The next step will be to expand outside the capital, which is scheduled for first quarter of 2012. The company's ultimate goal is to provide optical coverage of about 1 million households by 2014.
Hong Kong telecoms and media tycoon Richard Li inherited control of Vivacom in March last year as part of the acquisition of AIG Investments, a unit of the troubled US insurance group which spans asset management and private equity investments. The unit was renamed Pinebridge Investments ahead of the takeover by Li's Pacific Century group.
US insurance giant AIG bought 90% of the company's shares in August 2007 for EUR 1,4 B, later launching an offer to buy out the remaining shares.
The Lebanese company Oger Telecom will take over Bulgarian Vivacom in the short term, according to unconfirmed reports in the local media from the middle of April this year.
Oger is owned by elite Lebanese family Hariri, which has included two PMs of Lebanon, Rafik and Saad, the first of whom founded the company.
Oger is directed by his older brother Mohammed Hariri, who has embarked on a project for expansion in Europe.
Oger Telecom is expected to buy 25% of Vivacom, in addition to taking over its operative management.
Oger will also have the option to buy the majority of the shares within a year.
The deal is reported to be "extremely complicated." The buyer will not be paying much for the shares, but instead will be obliged to pay Vivacom's loans to various banks, which amount to over EUR 1.3 B.
Vivacom - formerly know as the Bulgarian Telecommunications Company (BTC) - has gone through a number of controversial privatization deals.
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