The APC European Internet Rights Project
Bulgaria Country Report
by Christina Haralanova
GDP per capita at current prices: USD 1,551
Phone lines: 3,259,767 
Internet subscribers: over 300,000
Telecommunication InfrastructureBulgaria has one of the highest telephone penetration rates in the region and almost 40 per cent of telephone subscribers. Every 11th Bulgarian over 16 possesses a mobile phone. The government-owned Bulgarian Telecommunications Company (BTC) provides all local and long-distance telephone lines and ISP's offer their services over these lines. Progress has been made in the liberalisation of the telecommunications market by bringing the Internet Service Providers under a free regime since November 18, 1999. 
Progress in the past 12 months has been affected by the attention paid to the attempt to privatise BTC and to select a second GSM operator.  On July 31, 2000 the government ended the negotiations for the sale of BTC with the most serious potential buyer OTE/KPN Consortium without a deal. A new strategy for the sale of BTC is under development, which will include a condition for the simultaneous acquisition of a license for a third GSM operator. On December 21, 2000 OTE Greece won the auction for a second GSM operator in Bulgaria with an offer of $135 million.
The accession talks with the EU on the Telecommunications chapter began in October 2000. The changes made recently to the Telecommunications Law in order to strengthen BTC's monopoly will meet the resistance of Brussels.
In 1999 BTC made major investments for digitising the national telecommunication network and increasing the number of the offered services. For digitising the telephone network $ 5,900,000 were spent which brought the country's network digitalisation to 15.5%. 
MobilTel is the only GSM operator in Bulgaria. In 1994 it received a 12-year license. The growth of subscribers for 1999 was 257% compared to 1998. At the end of December 2000 it had more than 550,000 customers; the actual coverage was 89% of the population and 76% of the landmass. MobilTel is the only operator that offers mobile access to the Internet in Bulgaria.
The Radio Telecommunications Company - RTC Mobikom is a joint venture of Cable & Wireless (49%), the Bulgarian Telecommunications Company (39%) and Radio Electronic Systems (12%). The system is analogue, offering various services like mobile phone communication (with over 180 000 subscribers and coverage of almost 95% the population); and mobile paging network (with more than 33,000 subscribers). 
Internet telephony is a new service in the Bulgarian market, providing a good alternative to the high cost of international calls offered by the BTC. Currently, BOL Ltd. is offering this service in Bulgaria.  There are also other ways of avoiding the BTC international calls services like Call-back and Internet conversations .
Availability of Internet Access in BulgariaThe market for Internet and telecommunications services in Bulgaria is one of the fastest growing in the Bulgarian economy. In 1999 The Information and Communication Technologies (ICT) in Bulgaria registered the highest annual growth since 1991 . It proved to be the fastest developing sector in the country's economy. During the first quarter of 2000 a small drop was registered in the ICT market. Computer use in Bulgaria is remarkably widespread. As a result, at present about 110.000 personal computers have full Internet access.
Internet services are provided through both dial-up and leased lines by Bulgaria's 254 ISPs (including 19 major ISPs with a direct connection to a backbone). Leased lines are mainly used by big banks and large companies and organisations, while the dial-up lines are used by private individuals and small businesses. The number of the dial-up Internet users is about 100,000 and the total number of the Internet subscribers is over 300,000. The figure is double that of 1998 and is expected to double again in 2001. The volume of the Internet market in USD in 1999 grew by 119,8% compared to the previous year. As of December 1999 80,4% of the computers in the Government sector in Bulgaria had access to the Internet. EuroCom is the first cable television station that offers Internet by the cable to its subscribers. This is the first existing alternative to the monopoly of the BTC over the cable networks for all kinds of telecommunication services in Bulgaria.
Government policy on promoting ICT Infrastructure growthIt is developed a National Strategy and Action Plan for Development of the Bulgarian Information Society by the Government .
The market for Internet services in Bulgaria is almost entirely unregulated which facilitates the entry of new ISPs. There are no specific taxes on Internet services, only the 20% value-added tax (VAT) applicable to all sales. It is planned to remove the VAT for the purchase of domestic computers, which will reduce their prices and will lead to bigger sales. There is no need for licensing since November 1999 after the ISOC won a trial against the Government licensing regulation, and there are no other substantial market entry barriers. Bulgaria follows all international standards applicable to telecommunications, which affect the provision of Internet services. 
Internet legislation in Bulgaria is in a very free regime, because there are no laws or other degrees about censorship or restrictions in the activity of the ISPs or other organisations dealing with Internet. The only restrictions could be provided by the company statute or the Law on the competition defence and the Commercial Law. 
The majority of users are concentrated in the major cities of Sofia, the capital, and the regional economic centres of Plovdiv, Varna and Bourgas. The smaller cities and towns may have fewer than 100 users each, where the lack of economies of scale keeps the prices of leased lines to ISP's much more expensive, thereby affecting the cost of dial-up connections. There was introduced a national access to the Internet for the users from the countryside. About 25% of the population (over 14) in Sofia use the Internet, half of it - from home . The conditions for use of the Internet by people of more than 50 years old are unfavourable and many of them do not know what it is like. For the most of the 1,5 million old people in Bulgaria the electronic communication is still remaining just a dream.
There was certain progress during the last year both in relation to the age border and to the means of connecting to the Internet (including through the cable and satellite link). More than 60 Internet cafes mushroomed throughout the country with as many as 15,000 computers installed by the end of 1999.
The competition between the Bulgarian ISPs came to a new level and it is the sale of prepaid Internet cards. The main accent is orientated to the diversity of the provided Internet Services. There are introduced also such Internet cards that allow the Internet access through a choice of entry points of more than 10 ISPs. The benefit of such kind of service is the low price of the service, but often the result of it is poor quality of connection. Important for the success of an ISP on the Bulgarian market is the combination of good price, quality of service and aggressive promotion and advertising.
Shopping over the Internet is with few exceptions almost unknown in Bulgaria and most of the people still prefer to do their shopping in the traditional way. However, there is a tendency towards a form of business to business e-commerce. Bulgaria is traditionally following very quickly all of the new developments in the information technology sector and with the globalisation of the Bulgarian economy e-commerce will probably replace a substantial part of the traditional trade. Several Bulgarian web-sites offer searchable electronic catalogues of goods for sale. The financial potential of quite new services like e-trade and e-pay are insignificant in Bulgaria. 
There is a very fast penetration of Internet bank payment service in Bulgaria. There are 2 payment systems called e-pay and bg-pay, offering this service and the registered users are more than 6,000. The daily transactions differ between 50 and 70.
It is relatively easy to sign up for the Internet services in Bulgaria. All major ISPs have their own web-site that describes the company and the offered services, prices, discounts etc. ISPs offer free technical support by telephone and organise training sessions and consultations for new clients. Many ISP's have established a solid reputation in the business community. Currently the domestic companies have a leading position on the Bulgarian Internet market and they meet almost all of the demand for Internet services.  There are about 25,000 Internet sites on Bulgarian language; the most famous portals offering various services and information are www.dir.bg, www.netinfo.bg, www.abv.bg, www.gyuvetch.bg etc.
List of the sources1. Progress report 2000 of the EU for Bulgaria http:/europa.eu.int/comm/enlargement/dwn/report_11_00/pdf/en/bg_en.pdf You can learn more about ISOC on www.isoc.bg and about the trial on www.isoc.bg /kpd/
2. Phare 1999 annual report about Bulgaria (covering the period until September 2000) www.ispo.cec.be/peco/phare/bulgaria/buBroadc.htm (March 1999)
3. Annual report 1999 of BTC www.btc.bg/btc/index.htm
4. Mobikom we-site: www.mobikom.bg
5. Communications weekly, 7-13, VIII 2000 Issue 16
6. Capital weekly 19-25.08.2000 issue 33 /www.capital.bg/
7. Janet Naidenova, "Who is who on the Bulgarian IT market" Sept.2000
8. See the Strategy on www.bild.net
9. Veni Markovski, Founder of the Bulgarian Internet Society, December 8, 2000. Personal interview
10. Luben Belov, Director of the 3 of the biggest Bulgarian Internet portals, December 8, 2000. Personal interview
11. Capital weekly 19-25.08.2000 issue 33 /www.capital.bg/
12. Veni Markovski, Interview for Computer World Magazine
13. Industry Sector Analysis (ISA) 01.07.2000, Internet Services Report see on page: http://tradeport.org/ts/countries/bulgaria/isa/isar0002.html