Bulgaria Telecommunications Report Q4 2011

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Bulgaria Telecommunications Report Q4 2011 Published on August 2011

Report Summary The Q411 Bulgaria report contains updated operational and financial data for the country's major network operators. It also contains an update to our fixed-line and broadband historical data and forecasts based on new figures published by the ITU for the fixed-line market and the European Commission (EC) for the broadband sector. Our mobile ARPU forecast sees a slight change this quarter to reflect Q111 operational results from the operators. Based on Q111 figures published by Bulgaria's two largest mobile operators ' Telekom Austria-backed Mobiltel and Globul, which is owned by OTE of Greece ' we estimate that the mobile subscriber base grew by 0.45% during Q111, slightly less than the 0.47% growth recorded the previous quarter, to reach 10.712mn subscribers. Third operator and the incumbent Vivacom does not publish regular updates for its operational indicators, and figures for the operator this quarter are estimates based on historical growth rates and general market trend. Going forward, we do not expect rapid subscriber growth to return to the Bulgarian market considering the high mobile penetration rate and the introduction of mandatory SIM registration. Rather, we expect operators to focus on attracting higher value subscribers and expanding their postpaid subscriber bases to ensure ARPU stability. By 2015, we forecast Bulgaria's mobile penetration rate to reach 150.5%. We also expect 3G connections, which accounted for just 9.4% of total mobile subscriptions in 2010 to account for around 21.7% of the mobile market by 2015. According to broadband market data for the Bulgarian market published by the EC, there were about 1.126mn fixed broadband subscribers and just under 600,000 wireless broadband subscribers using a dedicated data card or USB modem at the end of 2010. This brings the total number of broadband connections about 1.725mn, equivalent of 22.8% penetration rate. We have revised up our broadband forecast for this quarter and now expect broadband penetration (fixed and wireless access) to exceed 38% by 2015. The latest market data on Bulgaria's fixed-line sector relate to 2010 communications market published by the ITU. According to the ITU, there were 2.2mn fixed lines in Bulgaria at the end of 2010. The ITU also revised historical figures, changing the 2009 figures from 21.654mn to 2.205mn subscribers. BMI notes that bundled offerings, especially from cable operators, are a main driver of fixed-line subscriptions in Bulgaria.

Table of Content Executive Summary

... 7

SWOT Analysis

.... 8

Bulgaria Mobile SWOT

... 8

Bulgaria Wireline SWOT

9

Bulgaria Political SWOT

..... 10

Bulgaria Economic SWOT

... 11

Bulgaria Business Environment SWOT Central And Eastern Europe

..... 11 ..... 12

Central And Eastern Europe Business Environment Ratings, Q411 Bulgaria

... 17

Industry Forecast Scenario Mobile

.... 16

.... 18

.... 18

Table: Telecoms Sector ' Mobile ' Historical Data & Forecasts

Bulgaria Telecommunications Report Q4 2011 (From Issuu)

. 18

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..... 20

Table: Telecoms Sector ' Mobile ARPU (BGN) ' Historical Data & Forecasts Fixed Line

Table: Telecoms Sector ' Fixed Line ' Historical Data & Forecasts Internet Market Data Analysis

...... 24

...... 26

Mobile

.... 26

Table: Bulgarian Mobile Net Additions, Q111 Market Share

27

.. 28

Subscriber Mix

29

ARPU

31 ..... 32

Mobile Contract Wins

... 34

Table: Mobile Contract Wins

...... 34

Regional Outlook

... 35

Country Outlook

.... 39

Value-Added Services Timeline

... 43

Table: VAS Timeline

..... 43

Mobile Operator Data

.. 46

Table: Bulgaria Mobile Market Overview Table: Vivacom

...... 46

...... 46

Table: Globul

.. 47

Table: Mobitel

48

Fixed Line

..... 49

Broadband

.... 52

Cable

53

WiMAX

.... 54

IPTV And FTTx

...... 56

Mobile Broadband

. 57

Wireline (Fixed-Line & Broadband) Developments Table ' Wireline Developments (2008-2010) Regulatory Environment

58 ... 58

. 60

Table: Bulgaria Regulatory Bodies And Responsibilities Legislation

...... 60

Regulation

61

Recent Developments

..... 60

.... 64

Competitive Landscape

.. 66

Competitor Analysis Key Players

.... 66 ..... 66

Table: Key Players: Bulgaria Telecoms Sector

...... 66

Table: Selected Operators Financial Indicators, 2003-2009 Company Monitor

Vivacom Mobiltel (M-Tel)

. 66

..... 67

Alcatel-Lucent CEE-ks Growth In The East Operator Profiles

.. 22

.. 24

Table: Telecoms Sector ' Internet ' Historical Data & Forecasts

3G

...... 20

..... 22

..... 67

...... 70 ... 70 .... 76

Regional Telecommunications Penetration Overview

Bulgaria Telecommunications Report Q4 2011 (From Issuu)

.. 79

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79

Table: Regional Fixed-Line Penetration Overview Broadband

. 80

...... 80

Table: Regional Broadband Penetration Overview Mobile

81

...... 82

Table: Regional Mobile Penetration Overview

83

Country Snapshot: Bulgaria Demographic Data Section 1: Population

.... 84

.. 84

Table: Demographic Indicators, 2005-2030

.... 84

Table: Rural/Urban Breakdown, 2005-2030

... 85

Section 2: Education And Healthcare

..... 85

Table: Education, 2002-2005

..... 85

Table: Vital Statistics, 2005-2030

...... 85

Section 3: Labour Market And Spending Power

... 86

Table: Employment Indicators, 2001-2006

...... 86

Table: Consumer Expenditure, 2000-2012 (US$)

... 86

Table: Average Annual Wages, 2000-2012 Glossary Of Terms

... 88

Table: Glossary Of Terms BMI Methodology

...... 87

.... 88 ..... 89

How We Generate Our Industry Forecasts

.... 89

Table: Key Indicators For Telecommunications Industry Forecasts Telecoms Business Environment Ratings Risk/Reward Ratings Methodology Ratings System Indicators

.... 91 91

. 91

Table: Ratings Indicators Weighting

.... 92 . 93

Table: Weighting Of Indicators Sources

.... 89

91

.. 93

.... 93

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