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The transformation of BTC from a state-owned monolith into a modern telecommunications company was the result of a carefully managed reorganisation programme following a highly complex, but ultimately successful, privatisation process.

On paper, there were many reasons not to invest in Bulgarian fixed-line telecommunications operator, BTC.  As a formerly state-owned company, it had suffered from systematic under-investment and any change of ownership was likely to be politically charged.  Considered one of Bulgaria’s key assets, there had already been two failed privatisation attempts. At the time of our original tender in 2002 telecommunications was also a highly unpopular sector.

But, for all its problems, BTC presented an enormous opportunity. Despite its chronic inefficiencies, it was highly profitable. By modernising the business and its systems, we could really add value.

Our 2002 tender was followed by a highly protracted two-year process conducted under the glare of an international media spotlight. In 2004, we finally signed an agreement to acquire BTC.

“Full credit has to go to Advent International. The firm was able to achieve in two years what two major international telecoms companies had failed to achieve in the previous six – the privatisation of BTC.”

- Tony Robinson, former Chief Commercial Officer, BTC

Bringing in a new management team, the focus was on modernisng the company. We transformed BTC into a modern telecoms business with a substantially digitised network. It became market leader in a host of new services, such as ADSL broadband, and launched a new,  third mobile operator Vivatel.


“Advent managed to build a relationship with the local press, understand the local culture and work with local politicians. The result was successful after two years of sheer hard work.”

- Tony Robinson, former Chief Commercial Officer, BTC

Considered something of a national asset in Bulgaria, BTC was one of the last European telecommunications companies to be privatised. The legacy of its state ownership was all too clear: it was still running on analogue technology, it was highly inefficient, its billing system was inadequate and it had poor infrastructure. BTC was in desperate need of an overhaul and investment.

But with two previously failed attempts at privatising the business, it was going to be a challenging deal for anyone to complete.

BTC had enormous potential. It was a profitable business that, despite liberalisation of the market, was still operating as a quasi-monopoly. With the right management team, the business could be transformed into a modern European telecoms operator.

It went on sale in 2002, only a year after the TMT bubble had burst and telecoms companies were still too burdened with debt to make acquisitions. Bulgaria had also yet to reach investment grade status. In October 2002, we won the tender and a two-year fight for the deal began.

There was disagreement within government departments and between the parties in the government coalition about whether the business should be privatised at all, and if so, to which bidder.  Trade unions and the media were also initially hostile to the idea of a foreign buyer, especially a financial one. Fears over asset stripping and job cuts dominated the headlines.

But despite the poor odds, we signed the purchase of a 65% share in BTC in June 2004. This was the result of a determined approach: we kept the dialogue open with the Bulgarian government and its agencies in spite of the twists and turns the deal took; we explained to the media how private equity worked and outlined our plans for BTC; we communicated with unions and workers to reassure them that we would treat them fairly and we managed to keep the banks providing debt throughout the process.

The sale was a landmark deal not only for us, but also for the Bulgarian government, which at the time was aiming for accession into the European Union. It was the country’s first cross-border deal and its largest privatisation. As such, it was an important milestone in proving Bulgaria’s financial, legal and regulatory credibility to the international financial and political communities.

Implementing organisational change

We knew that with a reorganisation on this scale, getting on board an excellent management team would be vital to its success. We introduced eight senior industry managers with international experience of both traditional and alternative telecoms businesses. With such a broad base of expertise, the team was able to take best practice from a variety of markets and apply it to Bulgaria.

One of the largest and most difficult tasks was streamlining the work force. With nearly 25,000 employees, BTC had more staff than it needed. Whilst we had to improve the company’s efficiency, we also had to be mindful of the social implications of making people redundant. In consultation with the unions and the workforce, and working together with management, we took a three-pronged approach: offering voluntary redundancies with generous pay-offs, establishing an entrepreneurship programme to fund the business plans of those wishing to set up their own companies and retraining for those who left BTC.

In addition to streamlining the company’s workforce, we put in place new structures and reporting processes to establish clear lines of communication. We incentivised staff to ensure everyone was working towards the goal of creating a truly commercial organisation and focusing on customer service.

Modernisation/Investing for growth

Inefficiency was not BTC’s only problem. It had also missed out on several rounds of technology upgrades and was operating on out-of-date analogue switches, requiring the majority of its residential customers to share telephone lines.  Indeed, the technology was so out of date that replacement parts were sourced from museums because the analogue switches were obsolete. Its billing system was inadequate and could not ensure that customers were charged for the calls they were making.

A massive investment programme saw BTC leapfrog some of the world’s most advanced telecoms companies at the time as its networks were digitalised using the latest next generation technology. With new networks in place, a new billing system was implemented, providing customers with accurate bills.

With the digitisation programme underway, and with the award, in 2004, of Bulgaria’s third GSM licence, BTC’s management was able to focus on leveraging the new technology to launch new products and services to build for long-term growth. At the time of investment, both internet and mobile phone penetration in Bulgaria were low, but predicted to grow over the medium term. Our investment period saw the launch of a variety of new services, including ADSL broadband as well as a mobile service under the Vivatel brand.

The sale of our interest marked the end of our involvement in what had been an extraordinary opportunity to transform an inefficient state-owned telecoms company into a modern, fully competitive organisation, offering a full range of services to its business and residential customers in a newly liberalised environment. BTC had become one of Europe’s major telecoms companies.




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Joanna James

Managing Partner & Co-Head of Central Europe, Advent International plc, London
T: +44 (0)20 7333 0800