BMI's Executive Summary

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The Sector At A Glance

Key Insights On The Telecomunications sector of Bulgaria

The Bulgarian telecoms market demonstrated some impressive growth trends in 2006, and based on newly available data, BMI has revised its growth forecasts for the country’s fixed-line, broadband and mobile markets, as well as extending those forecasts to cover the five year period ending in 2011. Mobile growth was especially prominent in 2006, reflecting the impact of a price war initiated by third mobile operator Vivatel, following its entry into the market at the end of 2005. 2006 also saw the first signs of real growth in the uptake of broadband internet services, following the late introduction of DSL by incumbent telco BTC in February 2004.

Despite healthy levels of competition in the mobile market, with the two largest operators Mobiltel (MTel) and GloBul fighting to retain market share against newcomer Vivatel, in Bulgaria’s fixed-line and internet services market, it is quite a different picture. BTC retains a virtual monopoly in fixed-line service provision, operating around 99% of the country’s traditional fixed lines. Furthermore, the Bulgarian broadband sector lacks an effective wholesale DSL market, and this means that for the time being, BTC also has a monopoly in DSL service provision. The country does have numerous smaller alternative providers, including triple play cable operators such as CableTEL, Evrotur Sat TV, and Eurocom. However, the extent of their competition in the residential market has been limited, with CableTEL, the largest of the cable operators, still in the process of rolling out its network. The presence of a reasonable number of cable operators in Bulgaria means that cable has tended to occupy a dominant position in the broadband internet access market. However, the sector is also characterised by numerous local area network (LAN) providers such as Powernet, Megalan and Sofia Online, and IP service providers such as Orbitel, Nexcom and Eastern Telecommunication Company (ETC), which are also major providers of voice over IP (VoIP) services. These alternative operators have seen gains in the business sector, especially in the supply of data services. Their provision of VoIP services has also contributed to the decline in traditional fixed-line services.

Bulgaria remains at 12th position in our regional Business Environment Rankings table, although slightly increasing its own composite score, a change which mainly reflects the impact of mobile growth on the country’s market maturity weighting.

Contents

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Chapter 1 - Executive Summary

Chapter 2 - Industry Forecast Scenario

Fixed-Line

Table: Bulgarian Telecoms Sector – Fixed-line Historical Data & Forecasts

Internet

Table: Bulgarian Telecoms Sector – Internet Historical Data & Forecasts

Mobile

Table: Bulgarian Telecoms Sector – Mobile Historical Data & Forecasts

Chapter 3 - Macroeconomic Climate

Q2 GDP Growth Exceeds Expectations

Table: GDP, Population & Output

Risks To Outlook

Chapter 4 - Country Snapshot: Bulgaria Demographic Data

Section 1: Population:

Table: Demographic Indicators (2005)

Table: Rural/Urban Breakdown

Section 2: Education & Healthcare

Table: Education

Table: Healthcare: Vital Statistics

Table: Healthcare: Expenditure

Section 3: Labour Market And Spending Power

Table: Employment Indicators

Table: Consumption and Stratification

Table: Wages per year

Chapter 5 - Business Environment Rankings

Eastern European Markets

Bulgaria

Bulgaria SWOT Analysis

Bulgaria Telecommunications Sector – SWOT

Chapter 6 - Competitive Landscape

Market Structure

Table – Key Players: Bulgaria Telecoms Sector

Table – Selected Operators Financial Indicators

Fixed-Line Overview

Table: Regional Fixed-Line Penetration Overview

Internet

Table: Regional Internet Penetration Overview

Mobile

Table: Regional Mobile Penetration Overview

Market Data Analysis

Fixed-Line

Mobile

Table – Bulgarian Mobile Market, Q306

Table – Bulgarian Mobile Net Additions, Q306

Table – Bulgaria Mobile ARPU, 2005-6 (EUR/user/month)

Industry Developments

Chapter 7 - Company Monitor

Regional Case Study: Alcatel

Table: Alcatel Recent European Contract Wins

Selected Profiles – Operators

Bulgarian Telecommunications Company (BTC)/ Vivatel

Mobiltel (M-Tel)

Cosmo Bulgaria Mobile (GloBul)

Nokia Bulgaria

CableTEL

Chapter 8 - BMI Forecast Modelling

How we generate our industry forecasts

Telecommunications Industry

Sources

Chapter 9 - Appendix: Regional Demographic Data

Wages (ave labour force per annum), US$ PPP

Population

Household Spending Per Capita, US$

Private Consumption Per Capita, US$ PPP

Market Size, GDP, US$bn

Competitive Landscape for Europe Telecommunications Reports: Sample of Companies Ranked

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Commentary on key operators highlighting ownership structures, latest available revenue figures, market share analysis and ARPU counts. BMI forecasts for all headline macroeconomic indicators, including real GDP growth, inflation, fiscal balance, trade balance, current account and external debt. Company SWOTS Covering all leading telecommunications operators and manufacturers operating in each market, including competitive intelligence on geographic presence and competitive positioning against local companies; local market share; leading products, services and technologies; foreign direct investments, projects, merger and acquisition strategies.

Network of European Telecommunications Sources

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BMI's European Telecommunications Reports are based on an extensive network of multilateral organisations, government departments, telecommunications industry associations, chambers of commerce and company reports. Information sources include:.