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COMPUTERWORLD | Articles | Market Analysis
05 Mar

Bulgarian telcos look up at 4G but put money down in FTTx


Bulgaria has one of the most saturated mobile markets in Europe, with a mobile penetration higher than 150%. All three domestic mobile players – Mobiltel, Globul and Vivacom operate GSM and WCDMA cellular networks and offer mobile broadband services.

The fierce competition between the three, along with the regulatory cuts on roaming rates, lowered their 2011 mobile voice revenues. The challenging macro-economic environment was another hurdle before the growth in the usage of mobile services. As a result, the combined 2011 revenue of the three telcos shrank.

Mobiltlel's revenue declined by 6.5% to 527.7 mln euro, according to Telekom Austria Group's financial report. Furthermore, Mobiltel's revenue was affected by activities aimed at improving the collection of outstanding receivables, according to the document.

Globul's 2011 revenue reached 412.5 mln euro, or 2.6% lower than in 2010, according to the 2011 financial report of OTE Group.

In January 2012, Vivacom reported its mobile services revenue increased by more than 17% to 167 mln euro, while fixed-line revenue slumped 8% to 264.3 mln euro in 2011 versus 2010.

The competition and the declining profitability of pure mobile services intensified the ongoing consolidation process and FMC (fixed mobile convergence).

Globul’s fixed-line services continued their strong growth in Q4 2011, with a subscriber base of approximately 210,000 customers.

Mobiltel, which by the end of 2010 had acquired fiber-based broadband Internet service providers Megalan Networks and Spectrum Net, registered a revenue of 5.1 mln euro from fixed-line solutions and services in the fourth quarter of 2011. The telecom's average revenue per line (ARPL) was twice as high as the average monthly revenue per mobile user (ARPU), respectively 15 euro and 7.0 euro.

Broadband Internet

Broadband represents nearly all Internet connections in Bulgaria, with healthy competition due to the number of competing technology platforms used to offer broadband access DSL (nearly one third of the BB subscriber base), cable, FTTx, WiMAX and LAN-based micro ISPs. Recognising the potential of applying ICT to improve both social and economic development, Bulgaria has undertaken steps to develop an Internet society encompassing commerce, health and government services. Cable TV penetration is well above the EU average and the market has undergone considerable consolidation. Digital TV is also widely available via broadband TV and satellite, with the number of competing platforms increasing following the launch of services by the telecoms incumbent (BTC).

On this converged market besides the 3 big players (M-Tel, BTC, and Globul), are competing companies like ITD Network, Blizoo Media & Broadband, Varna Net, Vestitel BG, Global Communication Net, Gold Telecom Bulgaria, Eastern telecom company, Interbuild, Interoute Bulgaria, Nexcom Bulgaria, Net IS SAT, NetFinity, Telecom 1 etc

Smartphone and mobile data

Mobile data offerings in Bulgaria focused on mobile broadband, and mobile data services recorded a significant increase in Q4 2011 versus Q4 2010. Over 1.04 mln Bulgarians used smartphones at the end of 2011, according to a study of analysis agency Mobile Review. "This is more than 12% of all consumers of mobile services in the country. At the beginning of 2011 their count was around 700,000, which makes an increase of nearly 42% on an annual basis," the agency said.

Mobiltel's tablet sales soared by 270% on the year in 2011, the company's data shows. The next most searched products of the company are mobile Internet devices. Smartphones are on third place in sales, added from Mobiltel. For the same period the growth in the consumption of mobile Internet in the M-Tel network is 139%, as the number of subscribers of this service has increased with 136 %.

Globul's mobile data subscriber base nearly tripled by the end of 2011, and the company reported strong handset sales.

Vivacom said the mobile data traffic it had served in 2011 was over 10 times more than the year before, and the number of customers using these services had risen by more than 200%. Additionally, the telecom reported a growth of over 280% in the number of the subscribers of VIVACOM TV. For only a year the company had become the second largest satellite provider in Bulgaria.

4G in mind

Mobiltel launched a pilot Long-term Evolution (LTE) network on January 1, 2012. The local unit of Sweden's Ericsson was first client to test the 4G network. The first cities with LTE coverage are Sofia, Varna, Rousse and Dobrich, with the number of covered locations set to increase gradually throughout 2012, the operator pledged.

Vivacom also received a permission from the Communications Regulation Commission (CRC – Bulgaria's telecom regulator) to conduct testing on an LTE-based wireless network. The temporary permission is for a period of 6 months, starting from January 1, 2012.

WiMAX operator Max Telecom is expected to launch its pilot LTE network in the middle of 2012.

Globul is yet to announce it's 4G plans.

At the end of 2011, the CRC announced it had given the three telecoms permits for the vacant frequencies in the 1800 MHz range, which could be used to establish GSM, UMTS, LTE or WiMAX mobile networks. Max Telecom (2 х 8 MHz), 4G Com (2 х 8 MHz) and Bulsatcom (2 х 5 MHz) will provide public electronic communications services in the 1800 MHz range of the radio frequency spectrum for 10 years, the CRC added.

Fiber optic in the ground

M-Network, a unit of Mobiltel, said in 2011 it planned to expand its fixed-line high-speed Internet and TV services to cover 850,000 households by the end of 2011.

Meanwhile Vivacom added the city of Varna to its fiber-optic Internet coverage area. The company said it had deployed the necessary infrastructure in key areas in Varna, and the service will gradually reach citywide coverage. The coverage area of the company's FiberNet service, which offers surfing speeds of up to 100 Mbps, already included 100,000 households in Sofia, where the service had been rolled out in the summer of 2011.

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