2016 Bulgaria - Telecoms, Mobile, Broadband and Digital Media - Statistics and Analyses

Bulgaria’s telecom sector revenue under continuing pressure

Bulgaria’s telecoms market continues to be affected by the country’s poor macroeconomic climate and high unemployment. These factors are exacerbated by the consumer trends which have seen the continuing decline in the fixed-line sector as voice is replaced by mobile and VoIP alternatives. In addition, SMS and MMS services are being pressed by the growing use of alternative OTT messaging, so eroding an important revenue stream for mobile network operators. Further pressure is anticipated in 2017, particularly with international roaming rates having to fall in line with domestic rates.

The telecom sector has nevertheless benefitted from Bulgaria’s adoption of EU regulatory measures, which has encouraged investment in the sector from other telcos as well as private equity firms. The incumbent Vivacom has been privatised, and the government no longer holds the ‘golden share’ which had enabled it to veto certain key decisions. In August 2016 Viva Telecom (Luxembourg) completed the acquisition of InterV Investment, which indirectly owns Vivacom, for €330 million. Although the liberalised market has attracted new market entrants, Vivacom remains the dominant player.

Bulgaria has a rapidly developing mobile market, with effective competition provided by Telekom Austria’s M-Tel, Telenor’s local unit, and the incumbent Vivacom. A new entrant, MAX (Max Telecom), provides additional competition. Mobile penetration is relatively high, the result of a significant trend for fixed-mobile substitution in recent years. Competition among network operators has intensified given the recent implementation of a streamlined mobile number portability process. By the end of 2016 mobile networks accounted for about 85% of all voice revenue.

Mobile data offerings are focused on mobile broadband, resulting in considerable investment in network upgrades among all players.

The broadband market enjoys excellent cross-platform competition, including DSL, cable, fibre, WiMAX and LAN-based services. While the share of the market held by cable has increased slightly in recent years, the DSL sector is losing market share as a result of customers being migrated to fibre networks. Operators including Vivacom and Cooolbox now provide gigabit services, with Vivacom’s fibre infrastructure covering about 1.07 million premises by September 2016. By late 2015 an estimated two-thirds of subscribers were connected to fibre networks.

The country has undertaken steps to develop an internet society encompassing commerce, health and government services. Cable TV penetration is well above the EU average and the market has undergone considerable consolidation. Digital TV is also widely available via broadband TV and satellite.

This report provides an overview of Bulgaria’s fixed-line telecom market, including data on regulatory developments, the strategies and performances of the major operators and an assessment of the evolution of fixed-line networks. The report also reviews the mobile market, offering a variety of statistics and insightful analyses covering the major operators, market developments and services offered. In addition, the report assesses the broadband and digital media markets, including an overview of the technologies, major players and market developments, as well as a variety of statistics and fixed broadband forecasts to 2021.

Key developments:

• Regulator to introduce IP interconnection from the beginning of 2017;
• Viva Telecom (Luxembourg) acquires Vivacom for €330 million;
• Regulator signs MoU with Montenegrin telecom regulator to cooperate on reducing cost of telecom services;
• MobilTel covers one million households with fixed network;
• Cooolbox launches 1Gb/s FttP service;
• Telekom Austria Group acquires Blizoo Bulgaria from EQT;
• Vivacom re-acquires NURTS DTTV provider;
• Consolidation among cable TV players;
• Vivacom increases satellite broadband service to 18Mb/s;
• Government investment program for broadband in rural areas;
• Vivacom’s FiberNet offer passes 1.07 million premises;
• Regulator awards additional spectrum in the 1800MHz band for LTE use;
• MNP takes off under new regulatory measures;
• M-Tel extends LTE roll-out;
• Report update includes the regulator’s market data to 2015, telcos’ financial and operating data to Q3 2016, recent market developments.

Companies mentioned in this report:

Vivacom (BTC), Orbitel, Vestitel, MobilTel, Trans Telecom, Bulgarian Telecom and Television, Blizoo, Telenor Bulgaria.