SOFIA (Bulgaria), October 15 (SeeNews) – Bulgarian pay-TV and broadband operator Bulsatcom plans to launch commercial services based on 4G/Long-term Evolution (LTE) technology at the end of 2015, the company's CEO said on Wednesday.
The coverage of the new service will expand gradually from 50% of Bulgaria's territory to 80%, and then to 98%, Maxim Zayakov told SeeNews in an emailed interview, giving no specific timeframe.
“The company's initial market share is estimated in the single digits,“ Zayakov said.
Up till now, Bulsatcom has invested some 25 million euro ($31.6 million) in developing its 4G/LTE offering. The company was granted a 10-year 4G permit by the Bulgarian telecoms regulator in early 2013.
In May, Bulgarian telecommunications operator Max, formerly Max Telecom, officially launched in select cities the first commercially available 4G/LTE network for mobile internet access in the country.
The Bulgarian market of around 7.3 million – seen as very sophisticated and fiercely competitive pricing-wise with smartphone penetration among urban population exceeding the global rate - already accommodates three mobile carriers: GLOBUL, owned by Telenor, Mobiltel, a unit of Telekom Austria Group, and incumbent telco VIVACOM.
Earlier this month, the European Bank for Reconstruction and Development said it is providing a 20 million euro loan to Bulsatcom to further roll-out its LTE/4G mobile broadband network and expand its fibre-optic broadband network.
“We have also closed a senior secured loan led by Deutsche Bank London and we are also going to re-invest our profit," Zayakov said, adding that this is the company's usual practice.
The overall investment Bulsatcom plans for 2014 amounts to some 40 million euro. The funding will target all areas of the company's operations - the on-going development of a 4G/LTE network, fixed internet and satellite TV.
LAUNCH OF BULGARIASAT-1 SATELLITE SCHEDULED FOR 2016
Bulsatcom will launch in 2016 BulgariaSat-1, a geostationary communications satellite, which would provide direct-to-home television (DTH) services in the Balkans. The company picked last month California-based Space Systems/Loral (SSL) as a provider of the satellite.
The BulgariaSat1 spacecraft will be equipped with 32 Ku-band transponders for fixed satellite services and high-definition television broadcasts. The satellite will be based on Loral's 1300 series spacecraft platform and is designed for a 15-year lifetime.
Zayakov said that the U.S. Ex-Im Bank has approved a $150 million loan to Bulsatcom affiliate Bulgaria Sat for the BulgariaSat-1 project, adding that the deal will be finalised in the coming months. Bulgaria Sat was set up for procuring and operating the BulgariaSat-1 telecommunications satellite.
Currently, Bulsatcom uses a Greek satellite for the transmission of its TV programmes. After the launch of its own satellite, the Bulgarian company will provide capacity to other operators in the region and in the rest of Europe.
In addition to Bulsatcom, DTH services in Bulgarian are provided also by VIVACOM and Mobiltel. Another operator, Satellite BG, formerly ITV Partner, wound up its operations in 2013.
SATELLITE TV, INTERNET MARKET SHARES SEEN FLAT IN 2014
Bulgaria's broadband penetration rate is 34%, the third lowest in the EU, as in the regions outside the main cities it is even lower.
The market for the provision for internet services is extremely fragmented with a huge number of small players, so certainly some consolidation is to be expected in the coming years, Zayakov noted.
Bulsatcom holds a 31.9% share on Bulgaria's satellite TV market, equivalent to nearly 800,000 subscribers. Bulgaria has a population of 7.3 million.
In the medium-term, it targets a market share of 38% on the satellite TV segment and 20% on the Internet segment.
The company's satellite TV and Internet subscribers are seen flattish this year, Zayakov said.
Profitability levels too are expected to remain unchanged in 2014 with sales seen growing in the single-digit range.
Zayakov noted that the company is not expecting a significant increase in profit margins in the next few years, other than a single-digit increase in average revenue per user associated with HDTV migration. "Most of the growth is expected from the customer retention and satisfaction through bundled services offering in a mid and long term," he added.
($=0.7909 euro)