5 Key trends at the Bulgarian telco market
By Vladimir Vladkov
There were a lot of influencers on the Bulgarian telecommunications services market, as some of them weigh with the operators, others made significant changes on customer behavior. But the key trends comprise telco players, their customers, the regulatory authority, the Bulgarian parliament, and the government. In 2008, the Bulgarian citizens filled they are part of the big European family, as all the directives in telecommunications, specially in mobile segment, created in Brussels, could not be postponed as usual.
There was a strong progress in different segments - the cable TV market, the wholesale data transmission services, alternative broadband access, as well a slight development in WiMAX area. A nationwide survey, made by ICT Cluster, a non-profit organization, showed a quite different picture on the broadband penetration in Bulgarian families, more positive than the official data, sent to EU authorities.
1. The EU telco directives
The Regulation (EC) No 717/2007 of the European Parliament on roaming on public mobile telephone networks within the Community and amending Directive 2002/21/EC, entered into force on 30 June 2007. But the decrease of the roaming taxes impacted the Bulgarian mobile operators revenues during the strong touristic seasons - winter and summer 2008.
More concerning for the telco players are the discussion in the European Parliament for imposing a new regulation on the mobile data roaming, and to establish the broadband Internet access as "an universal right", during a review of EU Universal Service Obligations (USO) for the region's telecoms companies. The optimization of the digital dividend usage also will have impact on the Pan European telecom market, including in Bulgaria.
In 2008 Bulgaria was facing penalty procedures from Brussels, related to the delay of implementing the 112 emergency number. On April 12 Emel Etem, a Disaster Management Minister, said, the emergency number will start working throughout Bulgaria by the end of 2009 and kept its word. The system was ready to use on September 30, made by Siemens Enterprise Communications and Kontrax for 9 months.
2. The CRC market analysis and the appropriated measures.
Significant pressure on the big telecommunications players bring the market analysis of the regulation authority CRC (Communications Regulation Commission). The delay of these analyses also was criticized by EC. According to these analysis the regulator imposed some obligations on the markets of wholesale (physical) network infrastructure access (including shared or fully unbundled access) at a fixed location and Wholesale broadband access. On December 2008 CRC adopted a decision, foreseeing a decrease of 7 to 9 per cent on whosale termination price in mobile networks, and the aim is that price to be no high then 0.15 BGN (7.5 eurocents) / 0.13 BGN (0.65 Euro) respectively for call in peak hours and off-peak hours.
The regulation body imposed also a reduction of the whosale and termination taxes in fixed networks (drop with 55% to 68%). Although the objections, made by the 3 biggest operators (M-Tel, Globul and BTC), the CRC' draft proposition was approved by EC and the Bulgarian antimonopoly authority CPC.
3. Cable market in a heavy sea
Marriage and divorces happened in the cable TV operators segment, as CPC approved the merger between the 2 biggest players - CableTel and Eurocom. The deal is not finished yet, but this consolidation is quite likely in this tough economic situation. The TV services market consolidation comprises also the satellite operators Bulsatcom and ITV Partner, but Eurocom decline to make the deal with ITV Partner. The regulator CRC said in Bulgaria are registrated more than 564 cable operators, managing some 2728 cable infrastructures. There is no information which of them are really active and how many subscribers they have.
4. Passive network pave the way to IPTV future
The attack against the converged market of TV and Internet access services came from the alternative players. Since 2005 Vestitel BG, part of the gas distribution company Overgas, tried to establish a complete telecommunication business process - from fiber optic based infrastructure, implementation of powerful NGN IP platform for variety of multimedia services, and providing these services to the end customers and the business. In 2008 the company changed its strategy and started a brand new service - IPTV hosting. The new service actually stands for a partners model for digital interactive TV distribution through an optical network infrastructure to the customers' TV devices.
The Internet services provider SpectrumNet became the first partner of Vestitel in offering this new platform. All the end users of this new service can now choose movies content through the Video on Demand service or make separate TV profiles for each one. The next step of Vestitel's IPTV hosting platform will be delivering new generation services like PVR (Personal Video Recording), Time-shifted TV and HDTV.
In May 2008 Spectrum Net, which started the building of a PON based network in 2007, covered some 20 per cent of the capital Sofia territory. The alternative ISP plans were reaching more than 60 to 70 per cent coverage till the end of 2008. So far 200 Mbps is the maximum capacity for every user in PON platform and after network's upgrade this capacity will reach 1 Gbps, said Teodor Zahov, SpectrumNet General Manager..
5. Broadband access coverage - more than 14 per cent.
More than 1.5 million people in Bulgaria have high-speed Internet access. There are some 250 companies delivering broadband Internet services, many of them providing also IP television and VoIP platform. "The penetration of broadband access via LAN networks at the end of the first quarter of 2008 is 11.8%. This means that almost 12% of the households in Bulgaria use the Internet services of LAN operators", according to Petar Statev, president of the Bulgarian ICT Cluster - the organization that conducted the Broadband Access research.
"The total number of LAN/MAN Internet subscribers in Bulgaria is some 350,000 to 370,000, and the ADSL clients of BTC, including the business customers, is reaching 190,000. The cable TV providers have Internet subscribers base of 30,000. These numbers shows, that the broadband access have more than 600,000 household, so the broadband penetration rate in Bulgaria is some 20 per cent of the population", said in May 2008 Teodor Zahov, CEO of SpectrumNet.
Meanwhile the incumbent operator BTC strengthen its ADSL offer, and in February 2009 its ADLS subscribers base reached more than 230,000.