Market Insight

Bulgaria plans to bring forward analogue switch-off

March 14, 2012

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Bulgaria's Ministry of Transport has drafted new legislation proposing March 2013 as the deadline for the launch of digital terrestrial television (DTT) and September 2013 as the deadline for analogue switch-off (ASO). The bill is open for public consultation until 3 April.

The proposal would bring ASO back from the beginning of 2015. Initially, ASO was set for this year, with multiplex operator licences awarded in 2009. The decision to push ASO back to 2015 was motivated by a lack of funds for information campaigns and subsidies for low income households. So far, no DTT services have launched in Bulgaria. Currently two companies, NURTS and Hannu Pro, hold multiplex operators' licences. NURTS, jointly owned by Mancelord Limited and Bluesat Partners, bought the licence for multiplexes 1 and 2 from Slovak transmission company Towercom. Latvia's Hannu Pro has the licences for multiplexes 3-6.

In May 2011 the European Commission started infringement proceedings over the DTT licences awarded in 2009. This followed complaints from Austria's transmission company, ORS, which lost out in the process (and which was also not allowed to acquire NURTS by the Anti-Monopoly Office). Bulgarian regulator, CRC, has recently announced it would call a tender for the country's last DTT multiplex (multiplex 7).

With Poland and Romania, Bulgaria is third EU country where ASO officially is going to take place after the recommended European Commission deadline of 2012. Poland plans ASO for mid 2013 and Romania postponed ASO from January 2012 until January 2015. It is possible that the latter will bring it forward following the example of Bulgaria.

At the end of 2011 multichannel penetration exceeded 70 per cent of homes. Like in Poland and Romania, lack of DTT in Bulgaria has helped pay satellite TV to grow. With three companies providing services to the market, pay satellite in Bulgaria has been growing very well, nearly doubling its penetration in the last five years  and reaching 20 per cent of total homes in Bulgaria by the beginning of this year. As DTT will not launch before March 2013, satellite TV will continue its good growth; it should also keep growing after DTT launch, although more slowly, with satellite players likely to target the low budget segment of the market as has happened in a number of other CEE markets.

The regulator's announcement regarding a tender for multiplex 7 should be seen in the context of the ongoing EC investigation, which, if it ends with a verdict against Bulgarian regulator, would cost Bulgaria a very high penalty, not to mention a possible further delay for DTT roll-out.

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