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Bulgaria Telecommunications Report Q4 2009
Market |
Telecommunications |
Report Type |
Market Research |
Country |
Bulgaria |
Published |
27 August 2009 |
Number of Pages |
79 |
Download |
|
Immediate |
|
Publisher |
Business Monitor International |
LANs accounted for approximately 57% of Bulgaria's broadband market at the end of 2008, while WiMAX is also expanding
In our latest quarterly update on the Bulgarian telecommunications market, we have revised our fixed-line forecasts and updated the mobile, fixed-line and market data analysis sections. Mobile operator data for the first quarter of 2009 has shown a 2.2% q-o-q decrease in the country’s mobile subscriber base as all three operators reported subscriber losses. Mobile subscriber growth in 2008 had hit just 6.5%, down massively from the 24.7% seen in 2007. Although we do not believe the market is completely saturated, it does appear to be approaching saturation. Bulgaria has the highest mobile penetration rate in the region at 140.8% at the end of Q109. However, we believe that the country’s subscriber base contains a large number of inactive SIMs, which, as they are being discounted from operator subscriber bases, is resulting in dampened growth. The country’s two largest operators Mobiltel and Globul are both concentrating on migrating prepaid customers to postpaid contracts in effort to shore up their ARPU and looking to boost mobile data usage. More than half of their respective subscriber bases are now on postpaid contracts. This has left room for the country’s smallest operator Vivatel to increase its market share, but as competition at the lower end of the market increases from MVNOs such as Petrol Mobile, we are expecting Vivatel to 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 Bulgarian Telecommunications Company (BTC) was privatised. The incumbent still holds over 97% of the fixedline market and around 99% of the country’s ADSL subscribers. Alternative operators do exist, in both segments, but high prices and other difficulties concerning access to the incumbent’s network have held back competition from flourishing. However, this has resulted in an array of alternative broadband technologies making an impact on the market. LANs accounted for approximately 57% of the broadband market at the end of 2008, while WiMAX is also expanding. WiMAX providers such as Nexcom Bulgaria and Max Telecom are ambitiously expanding their networks, and we expect WiMAX to carve itself a place in Bulgaria’s broadband market. Broadband subscriber growth in 2008 was over 50% taking the country’s subscriber base to 853,000 accesses, and broadband penetration to 11.3%, leaving plenty of room for growth. We believe that, for Bulgaria’s broadband market to reach its full potential, the wireline sector 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 Investment Group (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 the country to scale back their capital expenditure plans, which will slow Bulgaria’s broadband market development.
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