Bulgarian Telecoms Reach Midlife Crisis – Watchdog Report

Bulgarian telecoms are past their golden years and are hardly likely to enter into a new such period, with traditional voice revenues declining due to the saturated market, restricted consumption and national and European regulations.

According to reports of Capital daily, after taking stock of the situation, Bulgarian mobile operators started searching for options to expand their business towards distribution of television and high-speed Internet.

As a result, the boundaries between the separate segments - suppliers of cable and satellite TV, of Internet and mobile operators – have blurred substantially.

The trend resulted in the creation of the so-called "package services", which have been growing steadily and are occupying an increasing share of the telecommunications market in Bulgaria.

The conclusions are part of the report of the Communications Regulation Commission (CRC) on the state of the industry.

The impact of the economic crisis continued to be a negative influence on the Bulgarian telecommunications market in 2011.

The industry registered an annual decline of 6% in the period from 2009 to 2011, including.

The peak registered in 2008, when the market was valued at BGN 3.5 B, plummeted to BGN 2.94 B in 2011.

According to data of the communications watchdog, the market accounts for 3.9% of the total GDP of the country.

Mobiltel remains a leader in voice services, but its market share keeps shrinking at the expense of the two other telecoms.

At the end of 2011, Mobiltel lost another 3% of the market, both in terms of number of subscribers and revenues from mobile services and it now holds 45.2% of the clients and 48.5% of the revenues.

Globul, Bulgaria's second-biggest mobile phone company, was the big winner in the situation, taking 1.7% of Mobiltel's lost share, while BTC managed to increase its share by 1.3%

According to CRC data, the three players on the market experienced a decline in voice revenues, with total revenues from all voice-related services registering a decline of 11.24% in 2011.

The strongest decline is in the sphere of talk services, which fell from BGN 1.93 B to BGN 1.74 B in 2011 as compared to 2010.

Fixed telephony services similarly registered a decline from BGN 381 M to BGN 321 M due to a host of factors.

Combined subscriptions including a package of services are gaining popularity and are becoming an increasingly important segment in telecoms' revenues.

In 2010, they generated BGN 100 M in revenues and in 2011 their value doubled to BGN 238 M, up by 137% on an annual basis.

The increase partially offset the decline in revenues from traditional services in the industry and prevented a steeper decline in the telecommunications market.

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