Bulgaria - Telecoms, Mobile, Broadband and Forecasts

Publication Overview

This report covers trends and developments in telecommunications, mobile, Internet, broadband, Internet society and digital TV developments. Subjects include:

·         Market and industry analyses, trends and developments;

·         Facts, figures and statistics;

·         Industry and regulatory issues;

·         Infrastructure;

·         Major players, revenues, subscribers, ARPU, MOU;

·         Internet, VoIP, IPTV;

·         Mobile voice and data markets;

·         Broadband (FttH, DSL, cable TV, wireless);

·         Convergence and digital media;

·         Broadband market forecast for the years, 2009-2012; 2018

Researcher:- Paul Kwon

Current publication date:- December 2009 (8^th Edition)

Next publication date:- December 2010

Executive Summary

One of the European Union’s newest members, Bulgaria underwent a period of extensive reform leading up to EU ascension that coincided with a healthy real GDP annual growth rate in excess of 6.0% from 2004 to 2008. Like many of its neighbours, Bulgaria has been impacted by the recent global financial turmoil through declining demand for its exports, a slowdown of credit activity, and lower foreign direct investment inflows, with Bulgaria expected to record a 6.0% contraction in real GDP for 2009, followed by a further 2.5% contraction in 2010. Government reaction to the resulting fiscal deficit includes increasing tax compliance and excises as well as reducing capital spending and optimising public administration spending.

Bulgaria’s telecoms market underwent reform to align its telecommunications policy with that of the EU. Competition has been introduced but incumbent operator BTC retains a major share of the overall telecoms market. Ongoing action by an active regulator has improved market conditions slightly, particularly in the network access sector, although more stringent measures are required to ensure fair competition, which is expected to materialise as the regulator expects to complete market competitiveness analysis in 2010 and 2011.

Internet services are widely available in Bulgaria although competition is more prevalent in cities and urban areas where competing platforms are deployed. Bulgaria’s Internet market is undergoing a transformation as broadband services increase in popularity due to falling broadband access prices and now represent the majority of Internet connections, with future Internet connection growth in 2010 and beyond exclusively due to broadband. Internet services are available from a number of Internet Service Providers, some of which are expanding service offerings to include VoIP and broadband TV (IPTV) in an attempt to differentiate offerings.

Competing digital TV offerings include cable TV and satellite TV, although major service providers in both markets have been impacted by frequent ownership changes by private equity groups. Licences to construct and operate digital terrestrial TV networks were awarded in 2009, with analogue switchoff scheduled for 2012.

Bulgaria possesses a well developed mobile market with mobile ownership levels in excess of 100%, although such penetration levels indicate multiple SIM card ownership. Bulgaria’s mobile market is served by three mobile network operators. Rising local fixed-line tariffs due to tariff rebalancing as well as increased mobile market competition has reduced the price difference between fixed and mobile voice services, supporting the trend of substituting fixed lines with mobile. The launch of 3G/HSDPA networks has opened up a new revenue growth opportunity in 2010 centred on mobile broadband, with all three operators offering competitive offerings with generous data allowances.

Key highlights:

·         Healthy platform-based broadband competition is evident, with access available via cable, ADSL, FTTx, LAN and wireless. ADSL accounts for less than one-third of total connections, with micro LAN-based ISPs representing the majority of broadband subscriptions. Competition within the ADSL market should improve as the regulator completes market analyses in 2010 and 2011 and implements measures to improve wholesale market conditions.

·         An emerging Internet society is evident, encompassing public administration and health. Uptake of e-government services by businesses in particular is evident, with approximately half of all businesses expected to use e-government services in 2010 to obtain information and complete information transactions.

·         Digital TV is widely available via cable, satellite, IPTV and DTTV, Cable operators offer triple play services and have focused investment on expanding network access and deploying HDTV infrastructure. A licence to develop and operate three nationwide DVB-T multiplexes for 15 years was awarded in May 2009, offering both SDTV and HDTV broadcasts.

·         Bulgaria’s three established mobile network operators have launched 3G/HSDPA services, with growth in 2010 focused on promoting 3G take up. Mobile broadband plans with generous data allowances are offered by all three operators, offering stiff competition to Bulgaria’s existing WiMAX-based broadband ISPs.

Bulgaria broadband and telecoms key performance indicators – 2008/09

(Source: BuddeComm based on industry data)

Data in this report is the latest available at the time of preparation and may not be for the current year.

Table of Contents

• 1. Key Statistics
• 2. Telecommunications market
  • 2.1 Overview of Bulgaria’s telecom market
• 3. Regulatory environment
  • 3.1 History
  • 3.2 Regulatory authority
    • 3.2.1 Communications Regulation Commission (CRC)
    • 3.2.2 The National Radio Frequency Spectrum Council
  • 3.3 Telecom sector liberalisation in Bulgaria
    • 3.3.1 Privatisation
    • 3.3.2 Interconnect
    • 3.3.3 Access
    • 3.3.4 Number portability
    • 3.3.5 Carrier selection/carrier preselection
• 4. Fixed Network Operator in Bulgaria
  • 4.1 Overview of operators
    • 4.1.1 Bulgarian Telecommunications Company (BTC)/VIVACOM
    • 4.1.2 Orbitel
    • 4.1.3 Vestitel
• 5. Telecommunications Infrastructure
  • 5.1 National telecom network
  • 5.2 Telecoms & IT
• 6. Internet Market
  • 6.1 Overview
  • 6.2 Internet statistics
  • 6.3 Bulgaria’s emerging Internet society
    • 6.3.1 E-government
    • 6.3.2 E-health
• 7. Broadband Market
  • 7.1 Fixed broadband overview
    • 7.1.1 Broadband statistics
  • 7.2 Local Area Networks (LAN)
  • 7.3 Cable
  • 7.4 Asymmetrical Digital Subscriber Line (ADSL)
  • 7.5 Fibre-to-the-Home (FttH)
  • 7.6 Wireless broadband
    • 7.6.1 World Interoperability for Microwave Access (WiMAX)
  • 7.7 Broadband forecasts – 2009-2012; 2018
    • 7.7.1 Scenario 1 – higher broadband subscriber growth
    • 7.7.2 Scenario 2 – lower broadband subscriber growth
• 8. Digital media
  • 8.1 Overview of broadcasting market
  • 8.2 Triple play
  • 8.3 Digital TV
    • 8.3.1 Broadband TV (IPTV)
    • 8.3.2 Digital Terrestrial TV (DTTV)
    • 8.3.3 Cable TV (CATV)
    • 8.3.4 Satellite-based digital pay TV developments
• 9. Mobile communications
  • 9.1 Overview of Bulgaria’s mobile market
    • 9.1.1 Mobile statistics
  • 9.2 Regulatory issues
    • 9.2.1 Second GSM licence
    • 9.2.2 Third GSM licence
    • 9.2.3 Fourth GSM licence
    • 9.2.4 Third generation (3G) licences
    • 9.2.5 TETRA licences
    • 9.2.6 Mobile Number Portability (MNP)
    • 9.2.7 Interconnection rates
    • 9.2.8 EU roaming tariffs
    • 9.2.9 Mobile Termination Rates (MTR)
  • 9.3 Mobile technologies
    • 9.3.1 GSM
    • 9.3.2 TETRA
    • 9.3.3 Third generation mobile
  • 9.4 Major mobile operators
    • 9.4.1 Overview of operators
    • 9.4.2 RTC Mobikom/Vivatel
    • 9.4.3 MobilTel/M-Tel
    • 9.4.4 Cosmo Bulgaria Mobile/GloBul
  • 9.5 Mobile voice services
    • 9.5.1 Prepaid cards
  • 9.6 Mobile data services
    • 9.6.1 Overview
    • 9.6.2 Short Message Service (SMS)/Multimedia Messaging Service (MMS)
    • 9.6.3 General Packet Radio Service (GPRS)
    • 9.6.4 Enhanced Data for GSM Evolution (EDGE)
    • 9.6.5 i-mode
    • 9.6.6 BlackBerry
    • 9.6.7 Mobile TV
    • 9.6.8 Mobile broadband
  • 9.7 Mobile content and applications
    • 9.7.1 Overview
    • 9.7.2 M-commerce (micropayments)
    • 9.7.3 Gaming
• 10. Glossary of Abbreviations

• Table 1 – Country statistics Bulgaria – 2009
• Table 2 – Telephone network statistics – 2009
• Table 3 – Internet user statistics – 2009
• Table 4 – Internet subscriber statistics – 2009
• Table 5 – Broadband subscriber statistics – 2009
• Table 6 – Mobile statistics – March 2009
• Table 7 – National telecommunications authority
• Table 8 – BTC interconnection rates – 2006-2008
• Table 9 – Cost of local loop unbundling and shared access – 2006-2008
• Table 10 – BTC financial data – 2003-2008
• Table 11 – Fixed lines in service and teledensity – 1998-2009
• Table 12 – IT market revenue – 2004-2008
• Table 13 – Internet users, subscribers and penetration rates – 1995; 1997; 1999-2009
• Table 14 – Internet penetration among businesses, by employee size – 2004-2008
• Table 15 – Percentage of businesses receiving orders online, by employee size – 2004-2008
• Table 16 – Online purchases by individuals – 2005-2008
• Table 17 – Uptake of e-government services by businesses – 2004-2008
• Table 18 – Uptake of e-government services by individuals – 2004-2008
• Table 19 – Data types stored by GP practices – 2007
• Table 20 – Electronic data exchanged by GP practices – 2007
• Table 21 – Fixed broadband subscribers by access type – January 2009
• Table 22 – Fixed broadband subscribers and penetration – 2005-2009
• Table 23 – Fixed broadband lines by speed – January 2009
• Table 24 – Forecast fixed broadband subscribers – higher growth scenario – 2009-2012; 2018
• Table 25 – Forecast fixed broadband subscribers – lower growth scenario – 2009-2012; 2018
• Table 26 – Audience share by broadcaster – Prime time – 2007-2009
• Table 27 – Audience share by broadcaster – All day – 2007-2009
• Table 28 – Mobile operators, subscribers and annual change – March 2009
• Table 29 – Mobile subscribers and penetration rate – 1995-2009
• Table 30 – MobilTel revenue, EBITDA, operating income and CAPEX – 2005-2009
• Table 31 – MobilTel prepaid, postpaid & blended monthly ARPU – 2004-2009
• Table 32 – MobilTel Monthly Minutes of Use (MOU) – 2007-2009
• Table 33 – GloBul financial data – 2005-2009
• Table 34 – GloBul operational data – 2007-2009
• Table 35 – Ratio of prepaid to postpaid subscribers – 2001-2008
• Table 36 – MobilTel prepaid subscribers – 2004-2008
• Table 37 – GloBul prepaid subscribers – 2007-2009
• Table 38 – Total mobile broadband subscribers and penetration rate – 2006-2008

• Exhibit 1 – The EU regulatory framework for communications
• Exhibit 2 – Access, the local loop and unbundling – an overview
• Exhibit 3 – The Economist Intelligence Unit (EIU) annual E-readiness criteria