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Read our exclusive interview
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 Bulgarian
Telecommunications Company
Plc.
Manager:
Mr.Marian Dragostinov, President
Contact:
Valentin KOLEV,
Head of department
Public relations
8, Totleben Blvd.
1606,Sofia
BULGARIA
Phone: (359 2) 951 55 64
Fax: (359 2) 659 430
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Ancient roads have crossed Bulgaria for centuries.
Today, modern telecommunications highways give you new possibilities.
The modern telecommunications highways of DON-infrastructure of the Bulgarian Telecommunications Company provide you with excellent possibilities to save time and reduce distances.
BTC builds, operates and maintains telecommunications networks and information systems. It offers national and international telecommunications and information services and develops commercial activities, marketing and engineering in the field of telecommunications.
The DON project guarantees reliable coherence,excellent information infrastructureand moderntelecommunications services
| COMPANY PROFILE |
The company
Read our exclusive interview
Bulgarian Telecommunications Company - Plc
1606 Sofia, 8, Totleben Blvd.
fax : (++359 2) 875 885
Telex 24199
e-mail : central.office@btc.bg
Website : http://www.btc.bg
BTC Plc. runs the construction, usage and support of telecommunications networks and information systems. The company also provides internal and international telecommunications and information services. In addition, BTC Plc. unfolds active commercial, marketing and engineering activity in the communications field.
 The DON project
Right after BTC became an autonomous limited liability company it started a grand project for the implementation of a digital overlay network known as DON. Within the scope of DON falls the building of 17 digital exchanges of a total capacity of approximately 70 junction lines and 106,000 subscriber lines, 1,700 km fibre optical cable highways and
1,300 km digital microwave links. The total worth of the project comes to approximately USD 300 million.
The majority of the DON infrastructure is already completed. 1,700 km fibre optical cable highways and 900 km digital microwave links are set in operation. Twelve digital trunk exchanges are built in the main administrative and business centres in Bulgaria. The preliminary capacity of junction and subscriber lines is exceeded by 13,000 junction and
46,000 subscriber lines.
| STRATEGY |
June,12th,1998
 Interview with Mr.Marian Dragostinov, Ph.D.
President of the Bulgarian Telecommunications Company-Plc
Q: Mr. Dragostinov, there is no doubt that your company is the leader in your sector. Could you give us a brief historical background of BTC as well as your professional experience?
A: Bulgarian Telecommunications Company is established during year 1992. That is the time when we started the process of the reforms. The first step was to separate the regulatory functions from the pure economical operations. During the year 1991 it was established the company Bulgarian Postal Telecommunications. I was nominated as a president of this company and very soon in 6 months we succeeded to split this company into two independent companies - Bulgarian Post and Bulgarian Telecommunications. So it could be said that I have established these companies. We started very actively and in very short period we succeeded to establish a very good relation with the International Bank Institutions : YBRD, EBRD , EIB ; and we received our loan - totally 160 million $, from all of them. Together with some consultancy companies we have developed our project called: DON ( Digital Overlay Network )
Well , it was quite a big project for us because it included full modernisation of the transit network and almost full digitalisation of the long distance network. We succeeded to keep very good relations with the banks during all the period till now , so there was not a reason for a delay and this year we finished with the implementation of this project which is based mainly on the last generation of fibre-optic system digital channels. Of course, we have organised and opened an international tender and the selection was quite good as a result of this: companies like Siemens, Erikson, Nortel, Alcatel and STS( Satellite Transmission System). They won the lots because the project was separated in different lots. Especially for STS, they won the lots for Intelsat-Earth Station for the Atlantic region. I am very glad that according to the estimation of the banks may be their relation with BTC was the best compare to other countries in this region. Of course , this is the infrastructure which from itself it is not the source of the revenues , so now before the privatisation of BTC our main target is to increase the customer market of this digital network, to increase the revenues. We have developed a very well defined program for BTC - a policy with priorities in investments . And because of the good reputation of BTC, we were offered proposals for new loans. I would like to give you as an example the proposal from EBRD : the loan up to 40 million $ - very flexible, without state guarantee, pure commercial loan with different options. One of the options is the convertibility of this loan which means that after finishing the process of the privatisation there is an option to convert the loan in BTC equity. Of course, there are a lot of other proposals but to some extent we are restricted because we are in the process of the privatisation and we need a lot of permissions from the Agency of Privatisation, the Committee for Post and Telecommunications and even from the Council of the Ministers.
Q: So you are not really independent...?
A: Well, I would like to stress implement at least
3 other main issues which are the target now and
this is to the business access network. We signed
a contract with Siemens and Newbridge for this.
Also we are very much concerned to insure very quick
access to Internet Services . Secondly it be provided
to the final providers . So Internet is exclusively
important for us , even we plan to upgrade our digital
channel for Internet connectivity including for
the voice. The third is a very reliable international
connectivity. We almost finished a program for ring
structure connectivity with all neighbouring countries
based again on the latest technological generations-
because BTC may be the first company in this region
that has the most modern information infrastructure
in the world. The reason is that developed countries
invested a lot money in previous generation technologies
which didn’t give bases for the multimedia
interactive services and so on and so on so. Now
BTC is a centre of a very attractive fragment in
the international network and many large operators
or alliances like Global One ,Deutsche Telecom,
France Telecom, Unisource, PTT- Netherlands. We
can propose very reliable bases for the broadband
communications - the so called ATM technology now.
The target of all these alliances is to implement
a global digital network for the broad band communications
and we will try one of the gateways of these centres
to be here. We have a lot of prerequisite of first
new digital network and we have increased the capacity
of this backbone network 16 times. So there is a
real interest from the large companies and alliances
to consider BTC a centre for the new services not
only for the Balkan region but for the Black Sea
region also. |
Q: I would like to know what were the financial results of last year. Is BTC in good financial state?
A: You told me before that BTC is the best company in the Telecommunication sector - No it is the best company in Bulgarian economy. We have very serious results : we have increased our turnover, our profit and etc. We are very active because in this low living standard we try to apply very flexible type of policy, to decrease the pressure on our subscribers and we put the accent om the big companies and big customers, the privatised enterprises. In two weeks we will open the demo-centre for ISDN here in Sofia and such centres will be opened in all big cities in Bulgaria: to train our new sector subscribers , to install the subscribers’ premises and etc. In a relatively short period we have made a very serious restructuring of the company - they key-point if this restructuring is the separation of the marketing from the technology. It is quite a difficult process because of the human mentality. It is a big challenge and this technological arrogance has to be destroyed, to changed dramatically our relation not with our subscribers but with our clients. And we introduced just now a new form that we will sign a contract with every our client with the rights and obligations for the two parts : the client and BTC. I follow very carefully the last very dynamic processes in the telecommunications and information industry and we like to be ready for these changes. Of course, the way the privatisation is made is quite important for the future. It is clear that there are to some extend some contradictions between Governmental interest ant BTC interest. The Government is looking for a higher value but we prefer to have more guarantees for the future investment. You know that the consultant for the privatisation of BTC is Deutsche Morgan Grenfell. We really would like to find a good investor. I prefer a consortium from the reputable companies which is our guarantee for the future of the development. We would like to keep the same rate of development and modernisation like in the last three years.
Q: If you had the choice which one would you choose?
A: Well, we will see . It is a great complicated game.
Q: As you have said there are a lot of paradoxes in Bulgaria concerning the living standard. So BTC used to serve some social functions , do you think it will continue?
A: Yes, we have all chances. This is for sure that we have to rebalance our tariff structure, to avoid cross subsidising between the different services and we prepare now a special contract and proposal for the social people. Even if we simply erase that types, keep the same structure, it ‘s been that many of our clients today they can not simply pay these. So we have to take this into account at least for 3 years. I am satisfied that we succeeded to increase significantly the income from leased lines , from the transit international traffic - for 1 year we succeeded to increase 10 times the transit traffic of Bulgaria which is a serious source for the hard currency. Of course, we meet a lot of obstacles, it is permanent battle with the Bulgarian authorities, the European Community project PHARE. We met very incredible bureaucracy or " Eurocracy". But never the less we push the management in the right direction and the results are fact.
I would like to mention that I gave my resignation during the governing of the Socialist Party in 1995 because I did not agree with their policy in the field of the telecommunication and for the first time in my life I worked as an independent consultant in that field which was suprisingly a very successful enterprise. And in the beginning of the last year I was appointed again for a president. I found BTC in a very critical situation , a very bad financial shape- even as a candidate for the Guinness Book. I had the good opportunity to select new people, a new team and to organise a new structure in BTC. So in a very short period we succeeded to improve the financial shape of this companies significantly. For 1997 BTC is the company #1 in Bulgaria and as I know it continues to be now.
Q: Our readers are always interested in new business opportunities. In which area of your activities are you really precisely interested to attract foreign investors
A: Mainly for the project which are very active with a quick return on investment - for example second GSM operator here , international connectivity, business access network. We tried to find collaboration with the cable TV operators to solve the problems in the subscriber access network. We do not like to be a Telephone company only, we would like to be a information and telecommunication one. So there is a lot of opportunities for investments . We very highly guarantee for the side of BTC. And that’s why I have mentioned this A-example with the proposal of EBRD for the purely commercial loan. We really have a potential here in Bulgaria. That’s why BTC starts to be a centre to attract many other small and medium private companies and to organise some high-tech centres not only for Bulgarian but also for some other countries. Our software specialists are very, very qualified.
Q: We have seen that you have a lot of partners in the USA. Do you often go there?
A: I keep very good contacts with Sprint , MCI; even there is a joint-venture between Sprint and BTC here. My impression is that Americans can make money from nothing. After the liberalisation of the telecommunications in the USA, we immediately established contacts with some new companies, even I signed several contracts for the mutual transit - they transit traffic from the USA to Bulgaria, the Balkan region, even to the BlackSea region and the opposite. I am very satisfied because the relations with the giants are quite more complicated than these with the small and medium new companies. We make a contact, a negotiation and finally sign a contact in two weeks - very pragmatic. What is more important is the mutual benefit.
Q: Mr.Dragostinov, I would like to know what is the secret of the new style of management?
A: I am quite experienced in telecommunications . I have worked in this sector for 31 years in different places. For a long time I have been a head of the planning division of the telecommunications. By the way I have experience as an ITU expert or UN expert. I have visited a lot of exotic countries like Cuba , Iraq , Mongolia but I also had very important project for this area in Eastern Europe - so called
"TET"-trans-European telecommunication network. This started 8 years ago and now it is finished. The last year we organised an official inauguration of this project. I knew very well the system which helped me to make a very good selection of the people - young people, who I immediately organised and sent to seminars in other countries for training. These people simply have a new mentality , different from the people before the changes. Most of them started in the company after the changes. So this is the secret that me and some other people succeeded to create a new atmosphere. The bureaucracy in our governing is very low. The secret is also to create and organise a very good horizontal management connection , to reduce the management level in the company. That is why we have our capability to implement our new projects very quickly. Another point is that have personally established good relations not only with the banks but with companies manufacturers. They trust us very much and even such to some extend conservative companies like Siemens they work with BTC with very flexible financial models, diferred payments, grace periods and etc. So this is the clue in Bulgaria - "orgwear", something like software, hardware, a new conception. This is the real deficit here - many capable people but the problem is the organisation. That’s why I tried to delegate my rights to many other people so the management layer is very thin here , this where we are trying to avoid the bureaucratic procedures. And also my team keeps very close communications with our territorial team divisions - by the way we decreased their number from 27 to 11. Another high priority till the end of this year is to implement the national operating centre for the digital network, to introduce
One-stop-shopping. We like to implement a very, very modern centres with network layer elements . Then a service layer which will be really involved in this World one-stop-shopping . I.E. the big client may order in one point and pay in another one .
Q: As a final message, what would you say to them?
A: BTC is opened to consider all proposals and BTC can support these investors not investing only in BTC but in a lot of private companies which have very good relation with BTC because more or less BTC is their mother. They are nothing without support . So there is many marketing white spots here which can be coloured with the BTC guarantee which is recognised all over the world.
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© World INvestment NEws, 1998.
This is the electronic edition of the special country report on Bulgaria
published in FORBES Magazine's
November 30th issue.
Developed by AgenciaE.Tv
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BULGARIA, 
