INTERVIEW - LG Bulgaria to sell over 75,000 smartphones in 2013, wider market seen up 40%

SOFIA (Bulgaria), September 11 (SeeNews) - LG Electronics expects to sell between 75,000 and 80,000 smartphones in Bulgaria this year while the broader smartphone market is seen expanding by up to 40%, Dimitar Valev, manager of the local unit’s mobile communications division, said.

On the overall cell phone market in Bulgaria, LG has a market share of around 6.5%-7.5% and Valev hopes that this figure could reach over 10% by the end of the year in terms of value, depending on current economic trends.

“On the smartphone segment, including iPhone sales, we have a much firmer footing and we should reach a share of between 15% and 17% by the end of 2013,” Valev told SeeNews in an interview at his office in Sofia.

The share of smartphones on the overall mobile phone market in the country is currently at approximately 37% with prospects to reach 40% by the end of the year in terms of sold units.

“The penetration rate of mobile telecommunications services in Bulgaria is around 142-143%. Based on this figure and assuming smartphones hit a share of 37%, we will reach a figure of close to 4.0 million smartphone users in the country,” Valev said, cautioning that this is just a rough estimate as some users have two phones or dual SIM cards while others get their devices from the black market.

The smartphone market in Bulgaria is lagging some two years behind the development of markets in Western Europe where the penetration rate reached between 60% and 65% at the end of last year.

“Having this in mind, it is expected that we will reach this penetration rate in some two years’ time, depending on service quality and pricing, mobile internet tariffs, income per capita and handset subsidies as one of the most important factor which affects demand for smartphones,” Valev said.

Casting an eye at neighbouring Serbia, he said the smartphone market there is very dynamic at the moment as it is experiencing a migration from pre- to post-paid plans – forcing operators to heavily subsidise handsets, a process that started in Bulgaria six years ago and wound up some three years later.

This shift left Bulgarian operators with a more or less stable market share with more than 90% of their clients buying phones with post-paid plans.

The share of no-contract mobile phones in the overall handset sales in Bulgaria almost doubled this year to somewhere around 13% which, according to Valev, is an interesting minor trend. He does not see it having a significant impact on LG’s business in the country since its phones sell equally well without a subscription plan.

Having in mind that LG is a very important player on the LTE market segment - being first in the world in terms of value of its patents for this technology and with the ambition to become one of the top three suppliers of LTE devices in the world, the fact that the launch of this technology and networks in Bulgaria was delayed is not good news for the company, Valev said.

He sees the possibility for a partial rollout of LTE services in Bulgaria in the foreseeable future.

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