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COMPUTERWORLD | Articles | Business Environment
27 Feb

Top 12 Business Trends 2008


Mergers and acquisitions, investments and awards - they all weight on the market trends and they all matter when a company is looking for a local partner in Bulgaria. Things that will affect the local market tomorrow, the end user prices, the competition affairs - things worht remembering, can easily be listed in 12 points...

1) Eurokom + CableTel = ?

It was a shock to all Internet and TV users when the two biggest players on the cable services market - CableTel and Eurokom - anouunced their plans to merge. Top managers of both service providers commented that the goal of the merger is to give an additional development perspective for their business in the cable and digital TV area, Internet services, telephony and enterprise solutions. To all the users this sounded lik the duopoly model was going to transform into monopoly.

The Competition Protection Commission (CPC) authorised the deal. In October the CPC announced the official decision: „the merger will create development opportunities and will positively affect the Internet access and fixed line telephony markets... The expected modernization of electronic communications services as well as the attraction of substantial investments ... have superiority over the creation of dominant position on the market."

Up-to-date the deal was not finalized. There were rumours saying that both operators gave up all their intentions because of fears of the potential monopoly.

2) „Petrol" entered the telecom market

It was a small announcement but it is crucial to the future market development. „Petrol", a petroleum&gas vendor, announced the start of a mobile telecom service under its own trademartk - „Petrol Mobile", sa prepaid service with flat tariff. Users can now send SMS messages and talk at one and the same price to all monbile andfixed-line networks.

It was an event that marked the emerging of a new business model that analysts have been waiting for: the advent of the Mobile Virtual Network Operators (MVNO).

„Petrol" promised to gain 150 - 200 thousand active users in 2 year. The company aimed and customers that need to seriously control their mobile communicatons costs. A traditional feature of the MVNO services was the offering of additional services such as price reductions for users when filling their cars with gas on „Petrol" stations, etc.

3) Liberalization in ".BG" registration

A major event in 2008 that went almost unnoticed was the liberalization of the „.BG" domain registration procedures. While some obstacles still exist, there is a real progress and a real desire for improvement. First of all, a registration without „legal grounds" was allowed - a clause that was previously a great burden to all. Now SMEs and individuals have more freedom of expressing their identity throught their domain name. Also the role of the Registrars was defined. Now the Register will be able to cooperate with Registrars to offer services more easily and to more customers. Although this was technically not possible for a long time, companies that deal with hosting and domain registration services are happy with the forthcomming change.

Last but not least, an arbitrary jury procedure was put in practice. It too may not be the perfect arbitrary institution, and there was a lot of criticism toward the procedure of chosing the members of the jury, but a fact is a fact, untill now no arbitrary procedure was possible at all. So it is a real step ahead.

4) ORS acquired NURTS

In the beginning of December 2008, the Austrian ORS signed an agreement with BTC Group for the acquisition of the National Unit for Broadcasting Operations (NURTS). The choice of ORS as buyer results from an international tender, consulted by the investment bank Lazard. "The system for radio and television broadcasting is not directly connected to the development of telecommunication services, which are our main priority. The sale of NURTS gave BTC the chance to focus on its main activity - fixed and mobile services, as well as internet and data transfer. The acquisition of NURTS by ORS will contribute to the development of the network and the improvement of the service quality, since the company has solid background in this area", Bernard Moscheni, BTC CEO commented.

According ORS, NURTS has stable positions on the analog broadcasting market in Bulgaria, which supposes the system to have a leading role by the digitalization in the near future. ORS plans modernization of the equipment and switch-over to digital broadcasting. The investments earmarked for infrastructure amount more than 100 million BGN.

5) Netinfo.bg was aqcuired by Sanoma

Netinfo.bg, one of the leadin Internet companies in Bulgaria, was acquired in May 2008 by „Sanoma Magazines International" (SMI). „Sanoma" took control of 68% of Netinfo.BG's shares. By the end of 2008 Netinfo.BG continued developing new web portals and services including online games portals, weather forecasts sites, etc. In the end of 2008 and the beginning of 2009 a recruitment advertisement at LinkedIn noted that Netinfo.BG was looing for a new CEO.

6) SIVECO Romania entered Bulgaria

Romanian companies gave celar signs on their intentions for geographical expasion in Bulgaria. SIVECO Romania, the most popular local software comany and one of the biggest system integrator in Romania, acquired the Bulgarian Latona, for 2 million euro. The ambition of the Romanian company was to become on eof the leading technology system integrators in the region. SIVECO was interested in entering the current Bulgarian projects regarding e-government, e-healthcare, e-learning, etc. Perhaps it is the global financial crisis that hampered the companys ambitions.

7) Eurokom to take over ITV Partners

Another one acquisition almost happened in 2008. Eurokom declared its ambitions to acquire „Interactive Technologies" - one of the tho most popular providers of sattelite TV services operating under the „ITV Partners" trademark. The CPC allowed the deal, but subsequently Eurokom withdrew from this deal.

8) NEVEQ funded Ontotext and FAVIT

The IT venture capital fund NEVEQ announced in June the third project inside its portfolio - acquiring a minoritary share of the Bulgarian company Ontotext, a member of the Sirma Group that deals with semantic web technologies. The unique technology solutions oby Ontotext give exclusive opportunities for extracting, usign and mamaging information through artificial inteligence. NEVEQ aimed to invest in structuring the company, expand its business potential and enter new markets. NEVEQ wanted toexpand the companys team up to 100 employees.

Another new investment by NEVEQ was aimed at FAVIT, an innovative p,latform developed by Interactive Media. FAVIT is to allow individual users have a single place to select and store interesting things - music, movies, photos, data; users cal also create such information and keep contacts with firends and colleagues.

9) TechniData entered Bulgaria

Bianor Services and the big German company TechniData signed a frame contract for establishing a joint venture company TechniData Labs Bulgaria. Bianor Services became owner of 51% of the shares of the newly-established company. TechniData Labs Bulgaria was established to deal with software development on TechniDatas leading products. Later, Bianor changed minf and sold its share to TechniData in December, 10 months aftter the establishment of the new entity.

10) Yahoo! Came into Bulgaria

In October, Yahoo! Entered the Bulgarian onljine advertising market. Local partner of the global corporation is Investor.BG, one of the leading Bulgarian Internet companies. Yahoo! Entered Bulgaria more than a year after Google did.

11) HP Bulgaria was awarded Investor of the Year

Two year after HP established its „HP Global Delivery Center Sofia", HP Bulgaria was awarded Investor of the Year by the Investments Agency. The company is one of six companies from different industries that were awarded for significant contribution to the verticals they are representing. „HP Global Delivery Center" in Sofia already employs 1300 high-skilled IT specialists.

12) TechoLogica, Universal-K and ITCE entered Technology Fast 50

Three Bulgarian IT comapnies entered the latest list by Deloitte - Technology Fast 50 - a list of the top fast growing companies in Central Europe. Having 1393% growth, the Plovdiv-bsased Universal-K ranked number 15. With 624% growth, Technologica and with 328% growth ITCE proved to be the other fastest growing companies in Bulgaria.

Bulgaria Proved Hungry for „.eu" Domains

In the middle of September 2008 EURid, the European Register of „.eu" domains, announced that an extremely high growth rate of the registrations inside the „.eu" domain name zone had been obzerved. There were six coutries to show more than 60% growth during the second quarter of 2008compared with the same period of the previous year. Blgaria topped the list with 126% growth rate, which placed Bulgaria as the European country with highest rate of „.eu" registrations fgrowth. The other five countries were Ireland (116%), Lithuania (86%), Poland (85%), and Romania (67%). The average growth rate fo all EU countries was 15% in the second quarter, according to EURid.

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