Alliance of the Technology Industry’s position letter on the Bulgarian Recovery and Resilience Plan, part - Digital Connectivity
RECOVERY AND RESILIENCE TASK FORCE
DIRECTORATE-GENERAL FOR ECONOMIC AND FINANCIAL AFFAIRS
DIRECTORATE-GENERAL FOR COMMUNICATIONS NETWORKS, CONTENT AND TECHNOLOGY
DIRECTORATE-GENERAL FOR COMPETITION
REF: Alliance of the Technology Industry’s position letter on the Bulgarian Recovery and Resilience Plan, part - Digital Connectivity
Dear Ladies and Gentlemen,
With the present letter we would like to state our serious concerns on the revised version of the Bulgarian Recovery and Resilience Plan, part - Digital Connectivity, submitted to the EC (“the Revised Plan”).
1. The Revised Plan was made without public consultations procedure
In violation of the EU’s principles of publicity, predictability and transparency the amendments have been made in 3 months without any public consultations with the stakeholders. In fact, the revisions in Digital Connectivity part have been published on the website nextgeneration.bgon March 11, 2022 only for information, while the previous version as of October 15th, 2021 has been broadly discussed with the communications industry for more than one year.
2. Lack of reasoning for the amendments made
The concept of the Digital Connectivity project has been completely changed with single argument that the revisions are made to meet EC’s comments. We doubt this argument as the previous project, has been tailored entirely in line with EC Guidelines for Member States regarding to Recovery and Resilience Plans and with ambitions to overcome DESI’s miss-performance.
3. We would like to pay attention to some specifics of the Revised Plan
3.1. The deployment of 5G connectivity along major transport corridors have been abandoned that puts in question the fulfilment of the “5G for Europe: An Action Plan”target, namely “at least all urban areas and all major terrestrial transport paths, having uninterrupted 5G coverage by 2025”.
3.2. The financial resource, originally dedicated to 5G corridors has been reallocated to the roll-out of additional lengths of the state electronic communications network. We believe this is in conflict with the basic compatibility principle of avoiding market distortion and overbuilding of private investments. Even the milestones and targets of the Revised Plan are drafted to favor state network deployment in detriment to rural areas private rollouts: State aid notification and public procurement procedures for state network will be carried out simultaneously for 6 months, while under the Pillar B notification will take one year and public procurement procedures - two and a half years.
Moreover, instead of serving for recovery of the economy and its future sustainable digital transformation, the half of the budget of the Digital Connectivity part will be spend for Pillar A - Development of the state backbone network.
The aforementioned problems raise a number of questions:
- what is the sign given to the private investors with the inclusion of the State as a player in a mature competitive communications market;
- is this activity in compliance with the RRF’s objectives for economic recovery and sustainability by stimulating a private initiative and encouraging investments;
- what kind of reforms will be made to increase the competitiveness and stimulate the investments;
- the state aid is not justifiable for at least half of the settlements, planned to be covered by the new lengths of the state network as there is existing connectivity of the private operators;
- is the state ready to engage itself in unusual activities as design, planning and building of such a large scale electronic communications network for extremely short period with shortage of professionals with such a profile, given the existing negative experience in similar projects in previous programming periods;
- what funds will be used in the future to ensure the maintenance and modernization of the established state network given the fact that only in 2020 the electronic communications companies in Bulgaria have invested nearly 430 million BGN in network development.
3.3. The revised targets in Pillar 2 - Enhancing connectivity in sparsely populated, remote and rural areas are less ambitious. The number of settlements with new access nodes has been significantly reduced from 500 to 185, and the possibility of 200,000 households to a broadband access has decreased to 350,000 people.
3.4. Taking into account the RRF’s requirements that at least 37% of total allocation shall contribute for climate and bearing in mind the current energy crisis the reason of dropping the pillar - Green Connectivity, dedicated to solar panels for the base stations is inexplicable.
3.5. Due to the fact that the 5G concept in the Plan has been changed pls be advised that the committed private investment of 300 million BGN by the MNOs will not be realised.
3.6. Without strong emphasis on 5G roll-out in the Revised Plan, there is no link between stated reforms such as 700 MHz spectrum allocation and lightening of the BS’s construction regime and suggested activities under Pillars A and B.
Taking into account above mentioned, we would like to expresses our serious doubts that the part Digital Connectivity will really contribute to the development and implementation of an effective policy and regulatory framework, the efficient use of the radio frequency spectrum for the development of 5G networks and services and the creation of a favourable investment environment.
Chairperson of the Managing Board
 The new version was published on the website – nextgeneration.bg on 11.03.2022 under the title “Revised projects in response to the comments of the European Commission on the National Recovery and Resilience Plan".
COM(2016) 588 final