ESIS extension / Bulgaria / Alternative Networks / Update Memo 6

The following report outlines new developments in the past three months and the state of on-going developments.

In the beginning of August the Bulgarian Government put an end to the negotiations with the Greek-Dutch consortium between OTE and KPN for the sale of the 51 per cent stake of the state owned incumbent operator – BTC, the Bulgarian Telecommunications Company plc (www.btc.bg). Both sides could not reach an agreement on several main issues.

Shortly afterwards started the preliminary activities for a new bidding procedure. The Council of Ministers appointed the Transports and Communications Minister as a Chairman of the new working group on the privatisation of BTC. First, the working group has to find a privatisation advisor for the sale of BTC by September 30^th. By the end of October, the working group will have to formulate an updated strategy for the BTC privatisation and submit it for approval to the Cabinet. The BTC’s appraisal will be updated as well (for more information see the Government Bulletin from 14 – 18 August at http://www.government.bg/eng/gis/index.html).

Meanwhile, the BTC officials reported that the company’s revenues rose by 12% in the first half of this year and the profit – by 10%. 20% per cent of the company's subscribers have generated 80% of the revenue. According to the management, the financial results are up to the targets for this year.

During the observed period the State Telecommunications Commission (STC) continued its activities of licensing according to the new procedures of the Telecommunications law. The latest principal developments in this respect, published in the Web sites of the Bulgarian Government (www.government.bg) and of the Bulgarian News Agency (www.bta.bg) are as follows:

As it was pointed out in the previous reports, in June this year the first private national TV broadcast in Bulgaria was launched and the Bulgarian Government decided to issue an additional license for the development and operation of another national television network. A bidding process is underway and 13 applications were submitted. The special commission was appointed to undergo the evaluation and classification of the received documents till October 17. After this date the assessment commission has to submit to the Council of Ministers its reasoned ranking of the candidates.

2.2 Competition for development and operation of eight regional public radio networks.

In response to the announced competitions for granting of licenses for regional radio networks in eight regions of the country, 236 sets of offer documents from 74 candidates were submitted. Because of the big number of the handed in applications the deadline for their evaluation and classification was extended till the end of November.

In August the Government approved the SCT proposal for issuing a nation-wide license for a radio broadcasting for a period of 15 years. The license will be granted on a competition basis and the procedure is similar to the one involved in the licensing of a second TV operator with a nation-wide coverage. The deadline for submission of applications is 2 October. The radio broadcasting network should have a good coverage and according to the competition conditions should be built in two stages: the first stage should be completed by the end of 2002, the second one - several years later.

According to the previous concept, the BTC privatisation deal would have included the right to establish a second GSM network in Bulgaria. As a result of the put off the privatisation the development of second GSM network was delayed. For that reason the State Telecommunications Commission proposed to the Cabinet to open a separate competition procedure for such a license.

The results of recent surveys show that the number of Internet users in Bulgaria is growing with an accelerating pace. A BBSS Gallup survey published in the press and cited by the Bulgarian News Agency (5 September) revealed that 324,000 Bulgarians aged over 16 have used the Internet in the second quarter of this year. It could be assumed that the number of Internet users almost doubled in a year, because in the first quarter of 1999 it was estimated to be 172,000. According to some forecasts the Internet use will keep growing, although the pace will slow down. The main obstacle is that only a limited number of people can afford buying a quality computer and paying the Internet access fee.

Another survey conducted by Alpha Research (www.aresearch.org) in the beginning of August shows that 24 per cent of the Sofia’s inhabitants aged over 14 use the ‘Net’ with a different intensity – 6 per cent every day, 6 per cent two-three times per week, 8 per cent two-three times per month. Internet users are mainly young people, men being nearly twice more than women. Approximately 45 per cent of them use Internet at home and 32 per cent at work. The study results are published in the Capital newspaper (www.capital.bg), No 33, 19 – 25 August 2000, p.7.

Please note that this report has been prepared under the sole responsibility of the ESIS II contractors.
It does not necessarily reflect the views of the Commission, nor does the Commission accept responsibility for the accuracy or completeness of information contained herein.
The ESIS Team of contractors welcomes any additional information or corrections.