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COMPUTERWORLD | Articles | ICT Statistic
07 Mar
2008
 
 

Bulgaria in Figures and Numbers

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by Kristina Morozova

Considering the effort that Bulgarian companies are making to increase their competitiveness in the EU and the recently introduced EU directives on various ICT aspects that the Bulgarian government is obliged to comply with, the ICT sector is now offering new and expanded opportunities. Both fixed and mobile segments of the Bulgarian ICT market still have high growth potential with large investments expected. A number of foreign companies are opening call/service centers in Bulgaria. Among the best prospects are the e-government initiative started by the Bulgarian government and the public tenders for purchase of computers, peripherals and servers for government procurement. Internet services, wireless and broadband Internet access technologies, cable television, and voice-over-Internet, routers, switches, access servers, mobile telephony equipment, cable operators' equipment and fixed wireless equipment are other favourable opportunities. Factors such as 0% export tax, low salaries and qualified human resources attract international software investment companies as well.

Internet and PCs on the rise, downfall of cable TV and fixed phone services

According to the sociological and market research agency Synovate Bulgaria, the Internet is the most perspective medium, which is expected to gradually take the place of its competing media over the next few years, as was the case with the UK and the USA. According to a study by the research company on the profile and development of Bulgarian users in 2007, Bulgarians use the Internet mainly for information search, including news reading, and secondly for e-mail, chatting and communication purposes in general. On the contrary, the Internet use of downloading audio and video content has diminished.


Bulgarian IT market prognosis

 HardwareSoftwareServices
201170,50%10,00%19,60%
201070,50%10,00%19,40%
200970,80%10,20%19,00%
200871,60%10,40%18,00%
200772,00%10,80%17,20%
200669,80%12,10%18,10%

Source: IDC


A strong trend is the very rapid increase of Internet-connected households. For the second half of 2007 online households have reached 36%, compared to 31% in the first half, said the research agency.

The slight decrease in cable television spreading in the second half of 2007 is also interesting - 72% penetration compared to 75% in the first half. The agency said that this was attributed partly to the increasing influence of Internet television.

The number of personal computers at homes have also significantly increased, rising from 36,5% of all households in the first half to 39% in the second half, which corresponds to the rapid Internet penetration. The number of households with mobile computers comprised 3,9% in the second half of 2007 after a 2,8% result for the first half of the year.

As far as corporate ICT

is concerned, Bulgaria is placed among the last countries in Europe in terms of Internet use in companies, broadband access, outsourcing and Internet presence, according to the official statistical institute of the EU, Eurostat. The research was made in the first half of 2007. According to its results, only 75% of Bulgarian companies have had Internet access and 61% have had broadband connection in 2006, which placed Bulgaria among the 6 European countries with lowest corporate Internet penetration - under 90%.

Nearly all of the young people

in Bulgaria - 85%, have cellular phones and 43% have computers in their homes. Making free use of new technology and fluently speaking foreign languages helps them much more in their future realization and easily finding a job, Mikhail Balabanov, Deputy Chairman of the Bulgarian State Agency of the Youth and Sports, said in a statement at a government meeting in August 2007. Nevertheless, according to the Agency's research the youth community can be conditionally divided into two groups - around 85% receive a good education and a chance of development and the rest remain isolated, illiterate and unprivileged. Balabanov also said that the problem with the integration of young people from the minorities is still present, because their educational level remains low. A clearly expressed process of "romization" of the segment of people in need is observed. This doesn't mean that there are no Bulgarians and Bulgarian Turks at all in this category, but there is a tendency toward a more massive presence of the Roma people in the group with insufficient means of living, Balabanov clarified. Constituting about 8% of the youth community, they make up 29% of the young people in need in Bulgaria.

e-Government Readiness

Bulgaria was rated 43rd in the list "Top 70 Countries in the 2008 e-Government Readiness Index". Our country was left behind by the main part of the European countries, but nevertheless Bulgaria came before some representatives of the Old Continent such as Greece, Croatia, Liechtenstein, Romania, Belarus, Andorra and the Russian Federation. These are the results of the e-Government Survey 2008 published by the Department of Economic and Social Affairs (DESA) of the United Nations on January 13 2008.

Titled "From E-Government to Connected Governance", the survey also measures the index of electronic participation (e-Participation). The top five under this indicator are the USA, the Republic of Korea, Denmark, France and Australia.

Bulgarian hardware market, 2007-2008

Bulgarian ICT market - ICT spending 2004-2007 and 2008 estimation (In million Euros and annual growth)

Market segment200420052006200720082005/042006/052007/062008/07
Server systems223734414667,9%-7,6%20,1%10,8%
Workstations00000    
PCs8513614117319460,0%3,2%23,1%11,9%
Add-ons406066727747,3%11,0%8,7%7,3%
Computer hardware14823324128631757,7%3,4%18,7%10,6%
Mobile telephone sets9410411312212910,6%8,3%7,6%5,9%
Other end-user communications equipment1616151514-2,6%-2,3%-1,1%-3,5%
End-user communications equipment1101201281371438,7%6,9%6,5%4,8%
Copiers6788812,4%5,4%1,6%0,0%
Other office equipment788896,5%5,8%4,9%3,7%
Office equipment14151616169,3%5,6%3,3%1,9%
LAN hardware141619222621,3%16,6%15,2%16,7%
PBX, key systems and circuit switching equipment3838383835-1,7%0,8%1,0%-8,1%
Cellular mobile radio infrastructure1161231311381445,9%5,9%5,5%4,9%
Packet switching and routing equipment222527303210,7%10,2%9,8%7,8%
Other datacom and network equipment20222426278,7%8,1%7,5%6,9%
Datacom and network equipment2112242392532656,3%6,5%6,3%4,5%
Total ICT equipment48359262469374122,7%5,4%11,1%7,0%
System software141618202212,8%12,4%10,3%10,5%
Application software252933374114,9%14,1%11,9%11,5%
Software products404551576414,2%13,5%11,4%11,1%
IT services515963698116,3%6,7%9,1%16,5%
Fixed voice telephone services3403543203062944,0%-9,5%-4,4%-3,8%
Fixed data services9410412315417710,9%18,9%24,8%15,0%
Mobile telephone services55862874582387712,7%18,6%10,5%6,5%
CaTV services546067738012,2%10,9%9,5%8,6%
Carrier services104511461256135714289,6%9,6%8,0%5,3%
Total ICT1619184319942176231413,8%8,2%9,1%6,3%
Total IT29840543049454935,8%6,2%14,8%11,2%
Total telecommunications132114381564168217658,9%8,8%7,5%4,9%

Source: EITO 2007

Notes:

  • Add-ons include memory and other upgrade equipment for computer systems and monitors such as graphic adapters, keyboards, hard disk drives, etc.
  • Other end-user communications equipment includes TDM network phones (analog, DECT, etc.), faxes, phone answering machines, and audio- and video-conference products.
  • Other office equipment includes typewriters, calculators, teller terminals, POS terminals, label and barcode printers, and microfilm systems.
  • PBX and key systems include IP PBX.
  • Packet switching and routing equipment includes backbone routers and packet-switching nodes, for instance ATM WAN equipment, Frame Relay, X.25, Core Router, DSLAM, etc.
  • Circuit switching equipment includes local and trunk switching platforms, telex switches, as well as network management systems, softswitches, media gateways from/to TDM/IP networks.
  • Cellular mobile radio infrastructure includes all types of equipment used by telecom operators such as multiplexers, SDH, DWDM, PDH and other technologies.
  • Other datacom and network equipment includes LAN hardware (without computer and server network interface cards and network operating systems) – hubs, routers, as well as modems, ISDN adapters, cable modems, DSL and fixed wireless technologies.
  • System software includes system infrastructure (operating systems, network management, security software, storage software, etc.), as well as application tools (data management software, development platforms, CAD programs, etc.).
  • Application software includes user, industrial and technical programs for business process automation, CRM, etc.

Bulgarian hardware market 2004-2007 and 2008 estimation (In unit shipments and annual growth)

Market segment200420052006200720082005/042006/052007/062008/07
Servers2956487248625596643064,8%-0,2%15,1%14,9%
Workstations3324191211-27,3%-20,8%-36,8%-8,3%
PCs12299719768220010424884927786360,7%1,2%24,4%11,7%
Printers and Multifunctional devices10947413770114116415840017210525,8%2,5%12,2%8,7%
LAN cards471785389560362671837323014,2%12,0%11,3%9,0%

Source: EITO 2007

The total shipments of computer and telecommunications hardware (including mobile phones and base stations) in Bulgaria reached $659.8 mln. in the first nine months of the year 2007, according to the independent market researcher CBN - Pannoff, Stoytcheff & Co.

However, the Bulgarian agency states that the growth of IT hardware shipments has apparently slowed down, due mainly to a significant drop in hardware equipment prices.

The best, permanent and steady growth throughout the whole year was observed in the market segments of mobile personal computers, monitors and the traditional components such as optical devices and hard disk drives.

There was a definite negative trend in the segment of brand computer systems in the previous year, with the exception of notebooks, which, expectedly, drove the PC market sales. There has also been an approximate zero increase in shipments of printing devices and uninterruptible power supplies.

A drop in average sale prices in some segments had been observed, which according to CBN would definitely affect the expected sales volumes, but might prove to have a positive influence on the IT sector revenues.

The preliminary prognosis of the agency for the year 2007 was for ICT hardware sales in Bulgaria reaching the boundary of $1 billion, thus achieving a new historical record for the country.

CBN expects 2008 to be a consecutive good year for computer hardware sales in Bulgaria. The market logic shows that IT shipments in euro will be greater than the results of 2007, once again reaching a positive double-digit growth, said the research agency. The notebook market will be the biggest segment and CBN expects brand mobile computer shipments to exceed 200 million BGN by the end of the year. Second in size will be the monitor market which is expected to go beyond 100 million BGN, and the printer segment will place itself third in 2008 with a relatively slow expected growth. According to CBN it will be shortly followed by the storage and optical equipment market.

The research agency predicts that the total value of hardware shipments will significantly exceed three-fourths of a billion BGN which would correspond to an average of 100 BGN per head. Despite the good prognosis, there are however some problems growing in the ICT business, the most serious of them being the great need for personnel, IT service pricing, the relatively small profit margins, intercorporate relations and debt, and unfair competition.

IT predictions

The preliminary prognosis of the market research company IDC for 2007 was for 25,1% annual rise in Bulgarian IT market. It will continue to grow with 14,9% every year until 2011. This trend will be strongest in the IT service segment, which will report 17% average annual rise, and the hardware segment with 15,4% average year-to-year growth until 2011, said IDC.

Although Bulgaria holds the last place in IT market volume among CEE countries for the year 2006, IDC sees great future growth prospects, resulting from a number of driving factors. They include the Bulgarian membership in the EU, a favourable tax policy, the professional training investment law, dynamic computerization of the population, government ICT programs, high rates of foreign investment, financial opportunities for the IT companies in the SMB sector and the national strategies for SMBs, education, healthcare, e-government, etc.

The most trusted IT brands in Bulgaria

The top five IT brands which have enjoyed the greatest public confidence in Bulgaria in 2007 were ASUSTek, HP, IBM, Intel and Toshiba (listed alphabetically). These are the final results from the eleventh annual research among Bulgarian professionals, IT Survey Bulgaria ‘2007, made by the market research agency CBN - Pannoff, Stoytcheff & Co.

IT companies from 23 Bulgarian cities with total sales adding up to over 75 million Euro and 1180 people personnel were asked the question "Which IT brand do you trust most?". This year the answers included 54 brands altogether in contrast to the 50 brands last year, and the first 5 form 46.1% of the vote of the IT companies.

According to CBN, 93 new brands have entered the IT market in 2007, the bigger part of them being in the field of computer cases, network equipment and players. At the same time 41 brands have left the market, the greater part being in the field of optical devices, digital cameras and multimedia projectors.

"In conclusion we can point out that the Bulgarian IT market in 2007 has proved to be remarkably dynamic and highly competitive, which will certainly lead to new brands entering the market as well as market redistribution and changes in sales of already proven brands, especially in cases of marketing not measuring up to the Western market standards", said Ljudmil Stoytcheff, Managing Partner, CBN.

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