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Bulgaria Telecommunications Report Q1 2011

Bulgaria Telecommunications Report Q1 2011

Table of Contents

Management Report
Published: November 2010
Pages: For full details, please email keithw@cmsinfo.com
Tables: For full details, please email keithw@cmsinfo.com
From: GBP 331.25  Buy Now!
Research from: Business Monitor International
Sector: Networks & Infrastructure

In BMI’s first quarter 2011 update on Bulgaria’s telecommunications sector, we extend our mobile, 3G, fixed line and broadband forecasts to 2015. Our new forecast incorporates trends in subscriber growth for these sectors as reported by the service providers, the telecoms regulator, the International Telecommunications Union (ITU) and the European Commission (EC), along with BMI’s political risk and macroeconomic outlook for Bulgaria as produced by our in-house Country Risk team. Latest subscriber figures for the mobile sector indicate that the growth in Bulgaria’s mobile subscriptions picked up in Q210 after a sluggish start to the year. At the end of June 2010, the mobile sector held around 10.6mn subscribers, up by 1.5% quarter-on-quarter (q-o-q) and 2.6% year-on-year (y-o-y). The subscriber loss in the first three months of 2010 can be attributed to the disconnection of inactive lines following the mandatory registration of prepay SIMs in the country. As of June 2010, Telekom Austriabacked Mobiltel led the market with a share of 49.4%. Deutsche Telecom-backed Globul remained in second place with a share of 37.2% while Vivacom came in at a distant third with a market share of 13.4%. Going forward, we maintain our outlook for less rapid subscriber growth in the market, especially as penetration rate hovers around 140%. Rather, BMI expects advanced services, such as data, multimedia, and other advanced VAs to drive revenue growth for operators. Our new forecast for the mobile sector sees Bulgaria’s mobile market reach around 10.3mn by 2015, reflecting a penetration rate of 140.4%. In BMI’s first quarter 2011 update on Bulgaria’s telecommunications sector, we extend our mobile, 3G, fixed line and broadband forecasts to 2015. Our new forecast incorporates trends in subscriber growth for these sectors as reported by the service providers, the telecoms regulator, the International Telecommunications Union (ITU) and the European Commission (EC), along with BMI’s political risk and macroeconomic outlook for Bulgaria as produced by our in-house Country Risk team. Latest subscriber figures for the mobile sector indicate that the growth in Bulgaria’s mobile subscriptions picked up in Q210 after a sluggish start to the year. At the end of June 2010, the mobile sector held around 10.6mn subscribers, up by 1.5% quarter-on-quarter (q-o-q) and 2.6% year-on-year (y-o-y). The subscriber loss in the first three months of 2010 can be attributed to the disconnection of inactive lines following the mandatory registration of prepay SIMs in the country. As of June 2010, Telekom Austriabacked Mobiltel led the market with a share of 49.4%. Deutsche Telecom-backed Globul remained in second place with a share of 37.2% while Vivacom came in at a distant third with a market share of 13.4%. Going forward, we maintain our outlook for less rapid subscriber growth in the market, especially as penetration rate hovers around 140%. Rather, BMI expects advanced services, such as data, multimedia, and other advanced VAs to drive revenue growth for operators. Our new forecast for the mobile sector sees Bulgaria’s mobile market reach around 10.3mn by 2015, reflecting a penetration rate of 140.4%.

We expect the fixed line and fixed broadband sectors to become more competitive following the efforts of the regulator to create a more level playing field for alternative operators to challenge the incumbent Vivacom. Some of the measures introduced by the regulator, including number portability, lower interconnection rates and greater access to the incumbent’s network, are already beginning to yield results. In September 2010, Globul announced its fixed line service had signed up more than 100,000 subscribers in its first year of operations.

Similarly, we expect recent consolidations in Bulgaria’s highly fragmented broadband sector to create bigger service providers than can better challenge the dominance of the incumbent. In September 2010, Mobilkom agreed to buy two cable TV networks, Megalan Network and Spectrum Net, in Bulgaria and merge them with its mobile operations. The acquisition, which will extend Mobiltel's reach into the fixedline telephony and broadband services market, follows the completion of the CableTEL-Eurocom merger in early 2010. Our new forecasts for fixed line and broadband sectors show that by 2015, Bulgaria’s fixed line sector will hold around 1.9mn customers, reflecting a penetration rate of 25.5%, while the broadband sector will hold around around 1.6mn subscribers, reflecting a penetration rate of 22.5%.

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