How technology ICT evolution toward market competition: Bulgarian case

1. Bulgaria:
How technology ICT evolution
toward market competition
Simeon Arnaudov
Professor SeungHyun Kim
463.541Technology Industry organization
TEMEP, Seoul National University
2012.05.12

2. Study problem
How technology ICT evolution toward market
competition. In other words how communication
companies using ICT technologies are maximizing their
company profit.
Simeon Arnaudov
Professor SeungHyun Kim
463.541Technology Industry organization
TEMEP, Seoul National University
2012.05.12

3. Market overview
TV and radio
10.3%
Internet access
10.1%
E-commerce
5.6%
TR= € 1,61 billion
Source: Arc fund; Capital newspaper; CRC
Communication
74%

4. History of telecommunication
industry
1. Market Evolution
1992
NMTi 450
1995
GSM 2G
Time
2005
GSM 3G
2012
LTE
Lowcompetition
Technology
2011
GSM 2G
Virtual operator
Monopoly
market
1995
Duopoly
market
2001
Oligopoly
market
2005

5. History of telecommunication
industry
2. Nordic Mobile Telecommunication
• Est. 1992
• Brand name: Mobikom
• Technology: NMTi 450 (voice); POCSAG 1200 (pager).
• Data transfer speed 1200 bps
Core technology developer (Alcatel and Ericsson)
• Frequency: 450MHz;
• Mobile services: Voice, text, VoIP
• Technology upgrade (2003): CDMA 450 (CDMA one (2G))
Core technology developer Huawei (China)
• Close down 2007
• Free frequency 420 – 460 MHz
1992
NMTi 450
Simeon Arnaudov
Professor SeungHyun Kim
463.541Technology Industry organization
TEMEP, Seoul National University
2012.05.12

6. History of telecommunication
industry
3. Global Service for Mobile
Telecommunication (GSM)
• Est. first GSM network 1995
• Brand names: Mobiltel (since 1995); Global (since 2001); Vivacom (since 2005); Bob (2011) –
first virtual operator
1992
NMTi 450
GSM 2G
3G
LTE
Core technology: Ericsson;
2G (1995)
EDGE
UMTS (2005)
----
HSDPA (2009)
HSPA+ (2011)
LTE (1800MHz - Ericsson)
Core technology: Motorola;
Ericsson; Huawei
2G (2001)
----
UMTS (2005)
HSUPA (2006)
HSDPA (2009)
----
Planning to launch LTE 2012
Core technology: Ericsson;
Huawei; Nokia
2G (2005)
----
UMTS (2005)
-----
HSDPA (2009)
----
N/A launch LTE about
Virtual network
2G
UMTS
HSDPA

7. Mobile communication market
1. Market share / number of customers
The survey does not include information for Virtual operator Bob
Source: investor.bg

8. 2. Revenue/ Customers/ Market
Post pay 52%
Pre pay 48%
Subscribers: 5 400 000
Revenue: € 614,7 (2009)
Net profit: € 147 (2009)
Mobile broadband: 70,9% up
Wire broadband: 33,8% up
Subscribers: 2% down
Mobile communication market
cont.
144%
subscribers
91% of
population has
mobile phone
€ 0,063
termination
price (2012)
Subscribers: 3 900 000
Revenue: € 423 (2010)
Net profit: N/A
Subscribers: 2 300 000
Revenue: € 515 (2005) include
all company branches
Mobile
broadband
(fast increase)99,98%
territory
penetration
98,92%
population
penetration
Subscribers: 15 000

9. Mobile communication market
3. Mobile broadband
Total number of mobile phones
8 500 000
Total number of smart mobile
phones 1 024 000
android
iOS
RiM
W8
Bada
Linux
Maemo
Palm
Symbian
65.8%
15.2%
8.5%
4.8%
4.5%
1.1%
Source: Arc fund; Capital newspaper; CRC

10. Wireless and wired
broadband access
TR= € 340 million
(2011)
TR= € 185 million
Home internet access
TR= € 87 million
Mobile internet access
TR= € 48 million
Business internet access
Source: Arc fund; Capital newspaper; CRC

11. Internet access
Source: Foundation ARC, 2012
Simeon Arnaudov
Professor SeungHyun Kim
463.541Technology Industry organization
TEMEP, Seoul National University
2012.05.12

12. Internet access
1. Internet users (in million)
1.17 1.32 1.44 0.64
Home Internet access
2011.01 2012.01 2011.01 2011.01
Cable TV Satellite TV
2. Used technology (broadband only)
50%
LAN
31%
ADSL
13%
CaTV 23% broadband
54% Internet access
Source: Arc fund; Capital newspaper; CRC

13. Regulation
Communication regulation commission -
implements the state sector policy in the field
of telecommunications and postal services.
 Law of electronic messages
 Licensing mobile operators
 No barrier to enter ISP market
Simeon Arnaudov
Professor SeungHyun Kim
463.541Technology Industry organization
TEMEP, Seoul National University
2012.05.12

14. Conclusion
new ICT technologies give opportunity to
communication companies to do services
diversification
High barrier to enter Mobile communication market
Low barrier to enter Internet service provider market
Mobile communication market is highly saturated and
it is difficult to gain profit, so companies are
introducing new strategies with adding new services
(as mobile internet; IPTV; fixed home phone; attracting
customers to move from pre pay to post pay mobile
services)
Mobile regulation give high bureaucracy

15. References
• ARC fund: http://www.arcfund.net/
• http://www.capital.bg/biznes/kompanii/2012/04/27/1816434_goliamata_kabelna
_razprodajba/?sp=1#storystart
• http://www.mtel.bg/lte
• http://www.globul.bg/bg/map.html
• http://www.vivacom.bg/bg/residential/about_us/company_information
• http://www.maxtelecom.bg/bg/devices/wimax-wifi-3.html
• http://www.dnevnik.bg/tehnologii/2010/10/18/978390_bulgariia_e_chetvurta_po
_kachestvo_na_internet_v_sveta/
• http://www.capital.bg/biznes/kompanii/2012/04/27/1816537_pruv_sred_neravni
/
• http://hardwarebg.com/forum/archive/index.php/t-89382.html
• http://en.wikipedia.org/wiki/GLOBUL
• http://www.standartnews.com/biznes/mtel_otchita_709_rast_na_klientite_na_int
ernet-148150.html
• http://blog.mobikom.bg/2012/05/radio-telecommunications-company.html