Fast Market Research recommends "Bulgaria Telecommunications Report Q3 2013" from Business Monitor International, now available
Boston, MA -- (SBWIRE) -- 05/27/2013 -- the Bulgarian market had a mixed 2012, with mobile subscriptions continuing to increase even at penetration rates in excess of 160%, but monthly blended ARPU declined rapidly. We believe this pattern was the result of aggressive promotional activities by operators to retain existing customers and attract new ones. The pattern of subscription growth and price pressures is forecast to continue, driven by competition and regulatory policies such as MTR reduction. However, this trend will be less pronounced than in 2012 as operators face up to the reality of having to maintain margins. Meanwhile, we remain upbeat about the broadband sector, which we expect to benefit from strong investments, next generation access networks and increasing take-up of internet-based services, such as IPTV.
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Mobile ARPU declined by 25.3% in 2012, with the market share weighted average falling to BGN10.3 in Q412. Price competition and cuts to mobile termination rates contributed to this sharp fall.
The mobile sector grew by 5.5% in 2012 to bring total subscriptions to 12.358mn, with penetration rate of 167.1%. We believe there are a large number of inactive subscriptions in Bulgaria.
Key Trends And Developments
- There have been several developments in terms of the ownership of major operators in recent months. In January 2013 it was reported that Bulgarian bank Bromak and Russian VTB Bank had offered to acquire the remaining stake in Vivacom (Bromak and VTB acquired 43.3% and 33.3% respectively in H212). Meanwhile, in February 2013 it was reported that Turkcell, Turk Telekom, Telenor and Deutsche Telekom (which owns 40% of OTE), were all in the running to acquire second largest mobile operator Globul from OTE in a deal reported to be worth up to EUR700mn. However, reports earlier in March that OTE was considering keeping hold of Globul after a successful refinancing of its debts.
- Whoever takes ownership of the established players looks set to face new competition from a fourth operator, following the award of a mobile licence to satellite operator Bulsatcom in January 2013. The new licensee intends to launch commercial services before the end of 2013, a development we expect to increase the downward pressure on operators ARPUs and operating margins in future, as well as erode the market shares of the existing players. We expect Bulsatcom to pursue a value-led strategy in its bid to get a foothold in the market, bundling its mobile services with its existing satellite broadband and TV services.
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