When in the early 1990s businessman Krassimir Stoichev and John Munnery, a former British military officer, headed the mobile operators Citron GSM and Mobikom, people thought wireless phones were toys for the affluent and for the ugly faces.
Some fifteen years later one of two Bulgarians has more than one handset, the number of sold SIM cards outstrips the population, M-Tel, the successor of the then Citron GSM, is one of the largest private companies in the country and the sale made Krassimir Stoichev multimillionaire. There is hardly anyone who can imagine life without mobile communications and time has shown how wise businessmen like Stoichev and John Munnery have been.
Today Krassimir Stoichev’s office is in one of Sofia’s business buildings. He can often be spotted examining boxes with telecoms equipment with a bunch of foreigners. Stoichev is very much convinced they contain the future of telecommunications. John Munnery is examining similar boxes in his office with a group of Bulgarians and is almost as much convinced the new technology will become an alternative to the lives of many.
The boxes that attract the eyes of the two men who gained popularity at the birth of the Bulgarian mobile communications, are WiMAX receivers. The technology is now fully in the shadow of the big telecoms. The companies that use it have hardly any subscribers, their networks only cover a few towns and their future is hazy. John Munnery, who is now director of one of the WiMAX operators, thinks it will take long for the technology to gain ground on the market. Yet Krassimir Stoichev, owner of another WiMAX company, draws a much brighter picture about millions of subscribers in a few years.
Whose forecast will come true? Will WiMAX live a golden age in Bulgaria? Maybe yes. But for now the companies in the business are still toddlers. And perhaps they will need foreign help to make their first confident steps.
The players on the market
Only a few Bulgarian companies have WiMAX networks – Nexcom (established by the Bulgarian national Emil Nikolov and an American), MaxTelecom (100 pct-owned by Krassimir Stoichev), Transtelecom (owned by Petrol Holding and run by John Munnery) and Mobiltel. Mobiltel uses the new network as an alternative to BTC in its recently-launched landline service. Nexcom’s network blankets Sofia, the region and the resorts. According to Emil Nikolov, who also manages Nexcom Bulgaria, the company will make investments of 20 mln euro until the end of 2009 which will earn it 10 pct of the fixed-line revenue in Bulgaria in three or four years to come. “We are the only WiMAX firm that already has real subscribers – some 5,000 customers, the bulk of them corporate,” Nikolov says.
Intel Capital (the global investment unit of U.S. chip manufacturer Intel) and MCI management (a Polish-based financial risk and private fund management company) acquired the controlling stake in Nexcom a week ago. MCI Management’s 31.6 pct stake in Nexcom was estimated at $7.0 mln. Both the size and the price of Intel Capital’s remained shrouded in mystery. Right after the deal Nexcom unveiled a bold new investment programme. Two days later its competitor BTC said it was breaking its interconnection contract with the operator for failing to pay for traffic termination since somewhere January 1, 2007. The move immediately sparked semi-official statements about the real reason for the deal – the former owners lacked resources. The connection was re-established once Nexcom paid off its debt to BTC.
According to telecoms sources, Krassimir Stoichev has also recently held talks on the sale of his company. “No, I simply don’t want to sell it, I don’t have to do it. But only in case I get a very high price,” Stoichev commented. With the same pride Emil Nikolov says Nexcom is the most advanced in the business as it has 5,000 subscribers, Stoichev says that MaxTelecom is ahead of all the rest because it will be one of the first in Europe to launch a mobile service. This will happen in the middle of 2008 when WiMAX mobile phones are due to appear in the continent. “We are not a WiMAX operator but a telecoms company as the others. Our dialling code is 099 just as Mobiltel’s is 088. Stoichev promises the official launch of MaxTelecom’s network will be on October 16 and thinks it will cover 90 pct of the population by the end of next year. The company can well hook one million customers in the next couple of years. A total 15 mln euro has been spent on the project so far and another 20 mln euro has been slated to complete the network.
John Munnery, the executive director of Transtelecom, (the WiMAX division of Petrol Holding) is giving the same figures. Yet this has not stopped the company from also putting up for sale part of its capital. Munnery says it is not because of little resources but a need to join forces with an operator that offers such services. Still Munnery has modest expectations for the market. “WiMAX operators could get 20 pct of the revenue of the telecoms market. Yet it will be hard and they will not enjoy the boom of mobile phones,” he says. According to him, the entrance of large WiMAX operators in Bulgaria is a matter of time. But this will not happen by buyouts of active operators until the global innovative companies fight their positions.
22-28/09/07, P60-61
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