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December 23, 2009
In 2009, EQT V bought 100% of Eurocom and 70% of CableTEL stakes, and once again the Bulgarian regulator approved the joining of the country’s two largest cable operators. The merger of CableTEL and Eurocom had already been approved in October 2008 but didn’t go through because Eurocom’s owner, Warburg Pincus LLC, could not secure financial backing. The amalgamated operator plans to start operational integration and joint offerings at the beginning of 2010.
Following the merger, we expect cable technology to experience a significant uptake in Bulgaria (see Exhibit): We project that cable access lines will grow at a CAGR of 23% between 2019 and 2014, accounting for 11% of all access lines by 2014. This stems from the fact that there are plans for significant network improvements and rollouts, plus the new operator will benefit from the existing cable network; CableTEL owns and runs the largest hybrid coaxial-optical cable network in Bulgaria, encompassing 23 cities, while Eurocom owns the biggest optical-coaxial network in the country with 90% coverage in the capital Bucharest and full coverage in another five cities.
Exhibit: Access lines by technology, Bulgaria, 2009 -2014
 In addition, the merged operator will be able to tap into Bulgaria’s fastest-growing revenue stream: Broadband Internet (for more information on the Bulgarian telecommunications market, see our recently published Country Intelligence Report, Bulgaria: Broadband and Bundling Spur Market Growth). According to our estimates, CableTEL/Eurocom held 6% of the broadband Internet market in 2009. We project that, propelled by the rollout of new bundled products combining broadband telephony and digital TV, its broadband market share will grow to reach 11% by 2014. Looking ahead, we also anticipate that CableTEL/Eurocom will dominate the triple-play market. A quick glance at the portfolios of EQT–owned companies reveals that EQT has successfully nurtured triple-play operators, such as Swedish cable TV operators StjärnTV and Com Hem, and German cable TV operator Kabel BW.
— Sylwia Boguszewska, Analyst
Related resources:
Bulgaria: Broadband and Bundling Spur Market Growth
Country Intelligence Report published December 2009
The Bulgarian telecom services generated $2.4bn in revenue in 2008, but the global recession impacted market growth in 2009, keeping revenue stagnant. We expect the market to grow at a 4.5% CAGR over the next five years The main drivers will be the expansion of the fixed broadband and mobile data segments, spurred by increased competition thanks to a more favorable regulatory environment. This Country Intelligence Report analyzes Bulgaria’s communications, media and technology industries, including key trends, regulatory pressures and the competitive landscape, making it an excellent complement to our Forecast products.
Central & Eastern Europe Fixed Operator Market Share Forecasts
Forecasts published quarterly
Our Fixed Operator Market Share Forecast products provide a complete picture of wireline voice and data communications in each of eight markets in Central & Eastern Europe. The Excel output includes five years of historical data and five years of market projections for metrics such as fixed lines, voice telephony, VoIP, circuit-switched lines, ARPM, narrowband, broadband, Internet accounts, fiber, DSL, cable and revenue — most of them broken down for the mobile operators in the respective markets. We believe our Fixed Operator Market Share Forecasts are superior because they capture granular data gathered through extensive field research and use a thorough methodology consistently applied to all markets.
Central & Eastern Europe Fixed Communications Forecasts
Forecasts published quarterly
Our Fixed Communications Forecast products provide a complete picture of wireline voice and data communications in each of 8 Central & Eastern Europe markets. The Excel output includes five years of historical data and five years of market projections for metrics such as demographics and economic trends, penetration of broadband and narrowband lines, Internet users, business users, voice telephony lines, VoIP, PCs, IPTV and revenue. We believe our Fixed Communications Forecasts are superior because they capture granular data gathered through extensive field research and use a thorough methodology consistently applied to all markets. Data from these Forecasts is available online for subscribers to our DataTracker service.
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