Market Watch

Bulgaria Postpones Analogue Switch-off to 2015


Display Driver IC Forecast


The Bulgarian government has pushed analogue switch off back two years to 2015 to allow more time to finance upgrades to the transmission network, launch an information campaign and to subsidise low income groups.

The original deadline of 2012 was in line with the target set by the European Union. Moreover, telecommunications regulator, CRC, has already awarded two licences for operating digital terrestrial (DTT) multiplexes.

A licence for multiplexes 1 and 2 was given to Slovak transmission company Towercom, with national free-to-air channels supposed to launch by the end of 2009. Towercom, however, sold its Bulgarian operation NURTS (with the licence) to investment group Mancelord Limited. BTC, the incumbent telco and national transmission company, then bought 50 per cent of shares in NURTS. The second licence for multiplexes 4-6 was granted to Latvian company Hannu Pro, which is planning to start roll-out by the end of this year.

Analysis
Bulgaria is not the first Eastern European country to delay analogue switch-off. Romania recently postponed its switch-off from 2012 to January 2015, despite the ongoing tender for DTT licences. While the difficult economic situation was a key factor in both countries, Latvia, which brought analogue switch-off forward from December 2011 to June 2010, did so to economise on the cost of transmitting national channels. The speedy transition to digital in Latvia (the decision was taken in February 2010) caused problems, as at the moment of switching off the analogue signal, 5-10 per cent of total homes were left without any TV service.

The delay in transition to digital terrestrial should benefit other market players - particularly satellite operators, which will be able to grow without any competition in small cities and rural areas. In Poland, where analogue switch off was set for mid-2013, and DTT launched only in the last quarter of 2009, satellite is now the largest pay TV platform, serving over 45 per cent of total homes.

Multichannel penetration currently stands at 65 per cent of Bulgaria's households, with three satellite operators competing for subscribers: Bulsatcom, Total TV, and BTC's recently-launched Vivacom.

It is possible that the CRC could press the government to bring the analogue switch-off deadline forward (just as the Romanian regulator ANCOM is proposing a deadline of 2013). However, the Bulgarian government seems unlikely to risk cutting off TV signals in thousands of homes - as happened in Latvia - and will instead opt for an orderly transition.

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