Boston, MA -- (SBWIRE) -- 06/20/2012 -- The ongoing sale of the incumbent Bulgarian Telecommunications Company (Vivacom) is the major development in the Bulgarian market in the past quarter. At the time of writing, negotiations for the sale of Vivacom had not been concluded, although reports from local press indicate that Turkcell is in pole position. BMI believes Turkcell to have the greatest potential to benefit the Bulgarian market, based on its experience in the low-cost Turkish market where it has helped drive market development. However, it was reported that creditors and Turkcell were yet to enter exclusive talks. A buyer could be announced by mid-April 2012. The outcome could have far reaching implications for the market as Vivacom continues to dominate both the fixed-line and broadband markets.
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The Bulgarian regulator has also submitted a proposed glide path to the European Commission in the past quarter for mobile termination rates (MTRs). The proposed path would see rates fall to almost a third of their current level in three instalments in April and July 2012, then January 2013. The Commission has warned the Bulgarian regulator, the CRC, several times that MTRs are too high and must be reduced. The rate cuts are welcomed in that they will help facilitate price competition from rivals with smaller market shares. However, they would also hit operator revenues in a market heavily dependent on voice revenues as data revenue growth has failed to take off. Finally, although MTR cuts would improve the regulatory environment, given the pressure from the Commission, BMI does not believe the cuts indicate an improved focus on liberalisation and consumer interests on the part of the CRC.
In addition to covering the most recent developments in the Bulgarian telecoms sector, the Q312 Bulgaria telecoms report contains BMI's revised forecasts for the mobile, fixed-line and broadband markets based on latest regulatory and operator data. The fixed-line and broadband forecasts have not seen a significant revision, but the mobile forecast has been upgraded based on stronger than expected growth in H211. The mobile ARPU forecast has had a significant downgrade based on ongoing price erosion and the prospect of MTR cuts negatively impacting operator revenues in 2012 and 2013. This report also contains updated operational and financial data for the country's major network operators, as well as an overview of mobile content and value-added services and an update to the regulatory environment.
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