Market Report, "Bulgaria Telecommunications Report Q2 2014", published

From: Fast Market Research, Inc.
Published: Thu Feb 20 2014

The picture for the development of the telecoms markets in Bulgaria continues to be mixed. The mobile market has benefited from the investment of Telenor, which should spur competition and raise standards. However, the penetration rate is already high, leaving little prospect for growth. Meanwhile, ARPUs have declined steeply as a result of cuts to mobile termination rates by the CRC. The outlook for the wireline market is again mixed, with broadband and converged service growth opportunities countered by the ongoing decline in fixed-line subscriptions. We remain bullish about the broadband market, which we expect to benefit from investment, next generation network rollout and increasing take-up of internet-based services, such as IPTV.

Key Data

* Telenor reported Globul's results for the first time after completing the acquisition from OTE, showing a loss of almost 700,000 subscriptions in Q313. BMI believes this is a one-off loss relating to the use of a different definition of active subscriptions by Telenor.
* Mobile ARPU has fallen sharply as a result of price competition and cuts to mobile termination rates. The changes to reporting for Globul halted the decline in Q313, but we believe the underlying trend of ARPU declines continues.
* European Commission data show the broadband market expanded rapidly in 2012, with growth driven by uptake of dedicated mobile broadband services, as well as higher speed fixed connections. Total subscriptions reached 2.222mn at end-2012, penetration of 30%.

Full Report Details at

Key Trends And Developments

The acquisition of Cosmo Bulgaria Mobile (Cosmote) and integrated retailer Germanos from OTE by Norwegian telecoms group Telenor was completed in July 2013, with the first operating results reported by Telenor covering the three months to the end of September 2013. Telenor reported a decline of 691,000 mobile subscriptions, almost exclusively from the prepaid segment, which infers the adoption of a shorter definition for active subscriptions. The impact of this change in reporting was to bring subscription mix and ARPU figures for Globul in line with those reported by market leader Mobiltel. BMI believes the shifts in data for Globul in Q313 are a one-off event, and we expect underlying trends of slow growth, subscription migration and price erosion continue.

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