03/10/2013

Chris Dziadul Chief East European Analyst

1 03/10/2013

} Dynamic and competitive digital TV market, but beset by problems } Some of these problems (e.g. DTT mux licence dispute with EC) have international dimension } Others are local, between leading market players } Piracy a major issue } High pay-TV penetration } Broadband leadership

} 3m households, of which between 2-2.5m receive pay-TV services } Top three pay-TV companies together have 1.5m subs: Bulsatcom (DTH) 900,000; (cable) 400,000; (DTH) 200,000 } M-Tel (IPTV) has 60,000 subs, other players a combined total of 500,000 } DTH market growing, cable TV contracting, IPTV still in infancy (total: <100,000 subs)

2 03/10/2013

} bTV and TV: ’s two leading commercial broadcasters, backed by CME and MTG respectively. Both have a portfolio of channels } BNT: national public broadcaster } TV7: commercial station

} Tough for the industry: TV ad market shrunk by 30-40% between 2008-12 } Underlying problems still exist between programmers and distributors following recent Bulsatcom/bTV and TV7 carriage dispute } Subscription fees very low, holding back market growth } VOD, OTT (HBO Go, Voyo) services exist, but still early days

3 03/10/2013

} Analogue switch off completed September 30, but country not 100% ready } Dispute with EC still ongoing. How serious is it? } Piracy a big issue: Zamunda and Arana most popular sites. Are the main studios taking it seriously enough? } Market in a state of flux, especially DTH sector (closure of Satellite BG in June)

} Blizoo is up for sale. Currently owned by Swedish investment group EQT and likely to attract a lot of interest } Neterra/ Satellite Broadcasting cooperation: huge potential to impact on Bulgarian market } General uncertainty in the digital TV marketplace

4 03/10/2013

} Many of the problems currently seen in Bulgaria are also being experienced in other CEE markets, especially in the Balkan region } There is still strong interest in Bulgaria by outside investors. Leading players such as CME and MTG, along with Telekom Austria, look committed to the country } Growth will start to pick up when the economic situation improves. However, that could still be some time off.

Chris Dziadul [email protected]

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