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Bulgaria Telecommunications Report Q4 2009Product Type: Market Research ReportPublished by: Business Monitor International Published: August 2009 Product Code: R302-7716 Description In our latest quarterly update on the Bulgarian telecommunications market, we have revised our fixed-lineforecasts and updated the mobile, fixed-line and market data analysis sections. Mobile operator data forthe first quarter of 2009 has shown a 2.2% q-o-q decrease in the country’s mobile subscriber base as allthree operators reported subscriber losses. Mobile subscriber growth in 2008 had hit just 6.5%, downmassively from the 24.7% seen in 2007. Although we do not believe the market is completely saturated, itdoes appear to be approaching saturation. Bulgaria has the highest mobile penetration rate in the region at140.8% at the end of Q109. However, we believe that the country’s subscriber base contains a largenumber of inactive SIMs, which, as they are being discounted from operator subscriber bases, is resultingin dampened growth. The country’s two largest operators Mobiltel and Globul are both concentrating onmigrating prepaid customers to postpaid contracts in effort to shore up their ARPU and looking to boostmobile data usage. More than half of their respective subscriber bases are now on postpaid contracts. Thishas left room for the country’s smallest operator Vivatel to increase its market share, but as competitionat the lower end of the market increases from MVNOs such as Petrol Mobile, we are expecting Vivatelto turn its focus towards the higher end of the market.Bulgaria’s wireline sector has not seen the level of competition that had been hoped for when BulgarianTelecommunications Company (BTC) was privatised. The incumbent still holds over 97% of the fixedlinemarket and around 99% of the country’s ADSL subscribers. Alternative operators do exist, in bothsegments, but high prices and other difficulties concerning access to the incumbent’s network have heldback competition from flourishing. However, this has resulted in an array of alternative broadbandtechnologies making an impact on the market. LANs accounted for approximately 57% of the broadbandmarket at the end of 2008, while WiMAX is also expanding. WiMAX providers such as NexcomBulgaria and Max Telecom are ambitiously expanding their networks, and we expect WiMAX to carveitself a place in Bulgaria’s broadband market. Broadband subscriber growth in 2008 was over 50% takingthe country’s subscriber base to 853,000 accesses, and broadband penetration to 11.3%, leaving plenty ofroom for growth. We believe that, for Bulgaria’s broadband market to reach its full potential, the wirelinesector not only needs to be liberalised to a greater extent but BTC needs to step up its investment levels. Currently, BTC is owned by troubled American financial services company American InvestmentGroup (AIG), leading to speculation that BTC’s capital expenditure could be negatively impacted. The economic and financial crisis impacting Bulgaria and the wider region is causing operators across thecountry to scale back their capital expenditure plans, which will slow Bulgaria’s broadband marketdevelopment. Table of Contents
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