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BMI View: T h e picture for the development of the telecoms markets in Bulgaria continues to be mixed . The mobile market has benefited from the investment of Telenor, which should spur competition and raise standards . H owever , the penetration rate is already high, leaving little prospect for growth. Meanwhile, ARPUs have declined steeply as a result of cuts to mobile termination rates by the CRC. T he outlook for the wireline market is again mixed, with broadband and converged service growth opportunities countered by the ongoing decline in fixed-line subscriptions. W e remain bullish about the broadband market , which we expect to benefit from investment, next generation network rollout and increasing take-up of internet-based services, such as IPTV.
Telenor reported Globul's results for the first time after completing the acquisition from OTE, showing a loss of almost 700,000 subscriptions in Q313. BMI believes this is a one-off loss relating to the use of a different definition of active subscriptions by Telenor.
Mobile ARPU has fallen sharply as a result of price competition and cuts to mobile termination rates. The changes to reporting for Globul halted the decline in Q313, but we believe the underlying trend of ARPU declines continues.
European Commission data show the broadband market expanded rapidly in 2012, with growth driven by uptake of dedicated mobile broadband services, as well as higher speed fixed connections. Total subscriptions reached 2.222mn at end-2012, penetration of 30%.