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How technology ICT evolution toward market competition: Bulgarian case

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Simeon Arnaudov
Simeon Arnaudov

This document discusses the evolution of the telecommunications industry in Bulgaria toward increased market competition through new technologies. It provides an overview of the key players in the mobile communication and internet access markets in Bulgaria, including the historical development from state-owned monopolies to increased privatization and competition. The mobile market is now saturated, so companies are diversifying services like mobile internet and IPTV to increase profits. Regulation by the Communication Regulation Commission aims to implement policy while removing barriers to market entry for internet service providers.

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Bulgaria: How technology ICT evolution toward market competition Simeon Arnaudov Professor SeungHyun Kim 463.541Technology Industry organization TEMEP, Seoul National University 2012.05.12
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
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%
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
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
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
Mobile communication market 1. Market share / number of customers The survey does not include information for Virtual operator Bob Source: investor.bg
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
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
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
Internet access Source: Foundation ARC, 2012 Simeon Arnaudov Professor SeungHyun Kim 463.541Technology Industry organization TEMEP, Seoul National University 2012.05.12
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
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
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
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

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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