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EC Slams Bulgaria for Meager Broadband Penetration, Costly Off-Net Calls

Politics » BULGARIA IN EU | May 25, 2010, Tuesday // 21:36| Views: 2435 | Comments: 0
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Bulgaria: EC Slams Bulgaria for Meager Broadband Penetration, Costly Off-Net Calls The European Commission communications market report on Bulgaria has pointed out the country's low broadband penetration rate. Photo by earthinpictures.com

The European Commission has criticized of Bulgaria over several issues in the 15th Progress Report on the Single European Electronic Communications Market – 2009.

According to the Bulgaria chapter of the report released May 25, 2010, the country is lagging behind with respect to its broadband penetration.

The full text of the Chapter on Bulgaria of the EC electronic communications market report is available HERE

The Full Text of the 15th Progress Report on the Single European Electronic Communications Market – 2009, including the country chapters, is available HERE

“Broadband penetration has increased slightly but remains the lowest in the EU despite strong platform competition. Alternative operators are continuing to face barriers to entering the DSL broadband market using the incumbent's bitstream or unbundled wholesale products. The fixed market is dominated by the incumbent and is consequently still characterised by limited competition,” states the EC communications market report on Bulgaria.

The Commission points out that the Bulgarian broadband market remains rather fragmented with more than 550 market players.

Bulgaria’s broadband penetration rate is the lowest in the EU - 13% in January 2010 (compared to 11.2% in January 2009) vs. the EU-27 average of 24.8% in January 2010.

The total number of retail broadband lines has increased by 15.6% year-on-year - 986 434 in January 2010, compared to 853 089 in January 2009.

The EC emphasizes the fact that there is a lack of competition on the DSL broadband market in Bulgaria, with one company – Vivacom – increasing its market share from 96.7% in January 2009 up to 99.9%.

The Commission reminds it has started an infringement procedure against Bulgaria for not implementing fixed (geographic) number portability (FNP), and that shortly after that the country’s Communications Regulation Commission announced the official start of the service as of July 1, 2009.

“By October 2009, 1 795 fixed numbers have been ported. However, the portability of geographic numbers for the incumbent's analogue telephone lines is still not feasible for technical reasons. According to the CRC, the remaining fixed analogue connections will have been digitised by the end of 2010. The Commission is looking into the matter,” says the EC report.

As far as mobile communications are concerned, the European Commission states that the sector, which accounts for 62.8% of the total revenues of the electronic communications market in Bulgaria, has started to show signs of saturation.

Bulgaria’s mobile penetration rate is among the highest in the EU – 138.9% in October 2009 compared to 137.4% a year earlier; the EU average is 121.9%. The proportion of post

paid mobile users in Bulgaria was 55.5%. The average revenue per user remained virtually the same at the level of € 112 in 2008.

According to the EC report, Bulgaria’s largest mobile operator M-Tel has 49.4% of all subscribers, a number that remained unchanged since the previous year. The second largest operator Globul has lost some clients – down to 37.5% from 38.3% a year earlier. Vivacom has increased its share slightly from 12.3% of all subscribers to 13.1%.

While Bulgaria is found to have the third cheapest on-net calls in the EU – 5 eurocent – vs. 4 in Cyprus and 4-5 eurocent in Latvia, the off-net calls remain more expensive than the average EU prices.

"As a result of high mobile termination rates and for reasons of business strategy, mobile operators' prices for off-net calls are much higher than on-net prices. Therefore, in order to benefit from low mobile rates per minute (on average € 0.05 in 2008) consumers keep more than one mobile subscription in parallel. This development partly explains the slow growth rate of the smallest mobile operator,“ the EC concludes.

The full text of the section on Bulgaria of the EC electronic communications market report is available HERE

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Tags: European Commission, Progress Report on the Single European Electronic Communications Market, electronic communication, Internet penetration, Internet access, broadband Internet, mobile operators, M-Tel, Globul, Vivacom, DSL
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