I. STATE, DEVELOPMENT AND PROSPECTS OF THE ELECTRONIC COMMUNICATIONS MARKET 1. Global development of the electronic communications market 3 2. Future development of the global electronic communications market 7 3. Volume and structure of the Bulgarian electronic communications market 10 3.1. Volume of the market 10 3.2. Structure of the market 11 4. Voice telephone services 15 4.1. Fixed voice telephone services 16 4.2. Mobile voice telephone services 20 4.3. Voice services via non-geographic numbers with national destination code 099x provided over broadband wireless access (BWA) networks by means of radio frequency spectrum 25 5. Leased lines services 26 6. Data transfer and Internet access 29 7. Transmission and/or distribution of radio and TV programs services 34 7.1. Retail distribution of radio and TV programs 36 7.2. Wholesale transmission and/or distribution of radio and TV programs and IPTV 41 8. Bundled services 44 9. Future development of the Bulgarian electronic communications market 49 10. Provision of the universal service 49 10.1. Degree of satisfaction from the universal service provision 49 10.2. Analysis of the provision of the universal service 50 10.2.1. Access to and provision of the universal service 50 10.2.2. Access to public payphones 51 10.2.3. Ensuring telephone directory and provision of enquiry services 52 10.2.4. Affordability of tariffs of the universal service 53 10.3. Quality of the universal service 53 10.4. Compensation of net costs accrued due to the universal service provision 55 10.5. Complaints and complaint resolution 55 10.6. Future development of the universal service 56 I. STATE, DEVELOPMENT AND PROSPECTS OF THE ELECTRONIC COMMUNICATIONS MARKET 1. Global development of the electronic communications market Volume and growth of the sector In 2013, the total volume of the telecommunication services market reached USD 1.631 trillion, which is a drop of 0.5% for another consecutive year, compared to the data reported by one of the international leading analytical companies Gartner Inc for 2012. According to data of the International Telecommunication Union (ITU), in 2013, the global trend towards growth in the number of users of electronic communication services continued. Figure 1 displays data on the penetration by types of services over the last nine years (2005 – 2013). Global development of the electronic communications market 2005 - 2013 100 93.1 Mobile voice services 88.1 90 Internet Fixed telephone subscriptions 80 Mobile broadband access 70 Fixed broadband access 60 50 37.9 35.5 40 26.7 30 per 100 residents 100 per 21.7 20 16.7 16.2 9.0 9.4 10 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 Source: ITU World Telecommunication/ICT indicators database Figure 1 Mobile voice services continued to hold the first place on the global electronic communications market. They registered a penetration of 93.1%, which is an increase of 5 percentage points since 2012. The same increase is reported in the mobile broadband access with a penetration of 26.7%. In 2013, the Internet services also registered a growth to 37.9% or an increase of the indicator by 2.4 percentage points on a one-year basis. Although at slow rates, the indicator of fixed broadband access penetration also registered a growth of 0.4 percentage points for a one-year period. The downward trend in the penetration per 100 inhabitants of the fixed telephone service on a global scale continued for another consecutive year. The data show that in 2013 a decrease, although minimal, was registered in this indicator – 0.5 percentage points since 2012. Mobile services According to ITU data, the subscribers of mobile services in 2013 were nearly as much as the world population (nearly 6.8 billion subscribers for a population of 7.1 billion)2. 1 http://www.gartner.com/newsroom/id/2643919 2 http://www.itu.int/en/ITU-D/Statistics/Documents/facts/ICTFactsFigures2013-e.pdf 3 The trend towards increase in the number of subscribers of mobile voice services on a world scale is mainly due to the market in the developing countries where a growth of 59% was registered in the last five years (2009 – 2013). The penetration of mobile services in these countries grew from 58% in 2009 to 88% at the end of 2013.3 In terms of the "average degree of penetration of mobile services" indicators, the data show that in 2013 its value was 93.1% (Figure 1), with penetration at 119% in the developed countries, and 88% in the developing countries. This percentage is the highest in the countries of the Commonwealth of Independent States4 (CIS) and the European countries, 137.0% (6.5 percentage points more than in 2012) and 122.8% (3.2 percentage points more than in 2012), respectively. The lowest degree of penetration was registered in the African countries – 65.9% and in the countries in the Asia and Pacific region – 86.4%. According to ITU data5 on the development of mobile services in the different regions of the world, in the countries from Africa, the Asia and Pacific region, and the Arab States, the trend towards increase of the number of mobile services subscribers continues to grow at faster rates compared to the number of mobile services subscribers in the remaining regions. For a five-year period, this increase reached 95% for the African countries, and in 2013, compared to 2012, it was 16%. The lowest degree of increase of this indicator is registered in the European countries. Fixed voice services According to ITU data, the downward trend in the use of traditional telephone services over fixed networks, persisted in 2013. A slight decline was reported on a world scale for the "number of fixed telephone lines" indicator with 1.8%, or in an absolute value, the decrease was 20 million lines (in 2012, the number of fixed telephone lines was 1,178 million, and in 2013 – 1,158 million). The greatest reduction of the "number of fixed telephone lines" indicator for a one-year period was reported in the Arab countries – 5.2%, while in the countries from the other regions, this decrease was between 1.2% and 2.6%. A drop was also reported in the degree of penetration of fixed telephony services, as at the end of 2013 only 16.2% (16.7% in 2012) of the world population using this type of services. No change was observed in terms of the leading positions held by the European countries, where the highest degree of penetration of fixed telephone services was once again observed – 39.6% (for 2012, this percentage was 40.3%). The next two places were occupied by the countries from North and South America (27%) and the CIS countries (25%). The lowest degree of penetration was observed in Africa (1.3%)6. Internet In 2013, the number of Internet7 users was over 2.7 billion which is 37.9% of the world population. This percentage was 29.9% in the developing countries, and 75.7% in the developed countries. The European countries reported the highest degree of Internet penetration – 73.1%, followed by the countries from North and Latin America – 61.8%. The lowest degree of Internet penetration was registered in the African countries – 16.8%8. According to ITU data, the registered increase of the Internet users in 2013, compared to 2012, was 8%, which was mainly due to the increased consumption in the developing countries. The highest degree of increase in the number of Internet users for 2013 was again reported in the African countries with a growth of 18.3% compared to 2012. According to ITU data, on a global scale, households that had access to Internet services in 2013 made up 40.4% of the households worldwide, which represents an increase of 3.3 percentage points compared to 2012. In the last five years, this indicator registered a growth of 13.3 percentage points which is mainly due to its increase of 22.0 percentage points in the CIS countries. The lowest increase was in the African countries – 6.9 percentage points. 3 http://www.itu.int/en/ITU-D/Statistics/Pages/stat/default.aspx -Key 2005-2014 ICT data for the world, by geographic regions and by level of development 4 Includes the following countries: the Russian Federation, Ukraine, Moldova, Belarus, Georgia, Armenia, Azerbaijan, Kazakhstan, Kyrgyzstan, Turkmenistan, Uzbekistan and Tajikistan. 5 http://www.itu.int/en/ITU-D/Statistics/Pages/stat/default.aspx -Key 2005-2014 ICT data for the world, by geographic regions and by level of development 6 http://www.itu.int/en/ITU-D/Statistics/Pages/stat/default.aspx -Key 2005-2014 ICT data for the world, by geographic regions and by level of development 7 Includes narrow- and broadband Internet access 8 http://www.itu.int/en/ITU-D/Statistics/Pages/stat/default.aspx -Key 2005-2014 ICT data for the world, by geographic regions and by level of development 4 The chart below shows the internet penetration by regions for the period 2012 – 2013. Internet penetration by regions for the period 2012-2013 80% 70% 60% 50% 37.9% 40% 35.5% 30% 20% 10% 0% Europe North and The CIS Arab countries Asia and Africa Latin countries Pacific region America 2012 2013 Average global penetration for 2012 Average global penetration for 2013 Source: ITU Figure 2 In 2013, versus 2012, the reported growth in the "Internet penetration" indicator was 2.4 percentage points (for the period 2011 – 2012, this growth was 3 percentage points). The greatest increase of the indicator was reported in the CIS countries – 5.3 percentage points, while in the European countries it was only 1.7 percentage points9.