Fixed/Mobile Revenues Seen 13% Down in Bulgaria, 2.0% Up in Romania in 2009 - Report

The report, covering 18 European markets, was prepared by Light Reading Communications (www.lightreading.com), an international provider of technology and financial analyses of the communications industry.

Telecoms revenues in Bulgaria are estimated to drop 13% to $2.188 billion ($3.29 billion) in 2009, including $681 million in fixed revenues and $1.507 billion in mobile revenues, Light Reading said in the report issued last week.

Overall, Europe's telecoms market has seen about $36 billion of revenues disappear in 2009, representing a collective 9.0% decline. But Romania is likely to pull off the unique coup of actually growing by 2.0% to $6.044 billion, the report said.

Fixed revenues in Romania are projected at $1.748 billion in 2009 with mobile revenues at $4.296 billion.

Total fixed and mobile revenue per capita this year is forecast to fall 7.0% to $292 in Bulgaria whereas Romania is expected to post a 1.8% gain to $282.

The report provided no revenue data on other markets in southeast Europe (SEE).

MARKET PENETRATION

While the recession has been giving European telecom revenues a beating, it has not stopped the onward march of broadband and mobile penetrations. Narrowband, a subscriber line with a transmission speed less than or equal to 128 kilobits per second, continues to decline just about everywhere, but this is a continuing technological and market shift rather than a recessionary effect.

Per-population narrowband subscribers in Bulgaria, a market of 7.7 million, are estimated at 28% in 2009, down from 30% a year earlier. Broadband penetration is expected to improve to 15% this year from 11% in 2008. Mobile penetration is seen almost unchanged at 138% versus 139% in 2008.

Narrowband penetration in Romania, a market of 21.5 million, is expected to increase marginally to 21% from 20% in 2008 while broadband per-population penetration is seen rising to 19% from 13% last year. Mobile penetration is estimated at 136% in 2009, up from 129% last year.

FIBER DEPLOYMENT

Mass-market fiber access has continued to expand its footprint in Europe during 2009, despite cuts made by many operators to their fiber capital expenditures. Pyramid Research, a market research and advisory service company owned by Light Reading Communications, estimates that the number of fiber-to-the-home (FTTH) and fiber-to-the-building (FTTB) access lines in Europe will increase from about 7.8 million in 2008 to about 10.9 million by the end of 2009.

The only SEE country that gets a spot in Europe's top ten FTTH adopters is Slovenia with 62,000 subscribers by June 2009, according to data of industry organisation FTTH Council Europe. The country's FTTH penetration rate improved to 8.9% from 7.3% at the end of 2008.

“In Western Europe, where DSL [a technology that provides digital data transmission over the wires of a local telephone network] has historically had the advantage, incumbents are turning to fiber to complement their nationwide DSL networks and to get faster speeds in high-competition areas,” the report quoted Pyramid Research analyst Bakhyt Weeks as saying.

“But in Central and Eastern Europe the picture is mixed. In Poland, for example, DSL plays a major role in broadband development, and incumbents are comfortable with it. In contrast, DSL has never taken off in Romania, and the altnets there are mostly rolling out fiber, and so the incumbent is forced to follow.”

To put a numerical perspective on this, Weeks expects that, in Western Europe, DSL will account for about 82% of broadband connections by the end of 2009, but only for about 46% in Central and Eastern Europe. In contrast, cable will be the third-largest broadband access technology in Central and Eastern Europe at nearly 22%, while FTTB, and the so-called neighborhood networks that are being actively upgraded to FTTB, will account for nearly 28%.

IPTV STILL IN FLUX

European IPTV is currently finding life a little tough, as the newest pay-TV technology has to face strong competition from the widely established cable and satellite TV operators, the report said. According to a recent Pyramid Research report, at the end of 2008 IPTV subscriptions accounted for only 8.2% of total pay-TV accounts in Europe, generating more than $3 billion or 8.0% of total regional pay-TV revenue.

IPTV/Video subscriber lines in Bulgaria are forecast to increase to 25,000 in 2009 from 7,000 last year, raising the penetration rate by 0.2 percentage points to 0.3%.

In Romania IPTV/Video subscriber lines are seen jumping to 13,000 in 2009 from 1,000 last year with penetration nudging up to 0.1%.

The report provided no IPTV penetration data on other SEE markets.

Light Reading Communications is a division of TechWeb, itself a unit of global media and marketing services company United Business Media.

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