Bulgarian internet population now exceeds 1.8 million

The Bulgarian internet population now reaches 1 800 000 people who account for 24% of the country’s population. The share of internet users has increased by some 50% since last year and the trend continues, fueled by ISPs who now offer faster and cheaper internet access. 2005 marks the shift from dial-up connections (2/3 of connections in 2004) to high-speed LANs and cable networks (2/3 of connections in 2005).

A significant event in Bulgarian internet in 2005 is the massive expansion of ADSL connections. The number of ADSL connections jumped from 10 000 in June 2004 to around 170 000 connections in the middle of year 2005 or 10% of the current internet connections. Currently the only ADSL provider is Bulgaria Telecom (http://www.btc.bg/en/).

Wireless internet is still going nowhere. The main reasons for that are lower quality of the service, compared to other types of access and also the small number of laptops. Other concerns are control of access to those connections and security. Wireless hotspots are slowly emerging in hotels and business centres. Other places you can find wireless hotspots include McDonalds and in some petrol stations.

Current internet connections types and distribution:
Dial-Up and ISDN – 10%
ADSL – 10%
Cable – 30%
UTP-at-Home (LAN) – 50%

Main places for internet access are at home (40%) and at work (28%). Internet clubs and internet cafes come next in third place with 27%.

Bulgarian businesses are using internet more and more actively, but still falls behind their European counterparts. In terms of connectivity it is 10% ahead with nearly 75% of all businesses having an internet connection. The turning point is the way internet is used in Bulgaria and in Western Europe. In 2004, almost 30% of Bulgarian companies had a website, compared to 44% of Western European companies having an online presence in 2003. In 2004 only 1.2% of Bulgarian businesses had some kind of integrated system with their suppliers, compared to 8% in Western Europe in 2003.

The readiness of Small and Medium Businesses (SMB) for e-business is low. Only 14% of SMB have electronic payment cards. Only 2% of SMB made an online B2B purchase in 2004, and even less (1%) made a B2B sell. Nearly 11% of Western European firms have made a B2B deal online in 2003. Only 2-3% of SMB turnover is from e-commerce.

The Bulgarian e-marketing marks a substantial advance in revenue in 2005. In Q1 and Q2 of 2005 there is a 70-80% growth in online marketing spending, compared to the same period in 2004. We can follow this tendency back to 2003, when revenues jumped with 80-90% compared to 2002. A similar picture is present in 2004 where the increase was about 60%.
In 2004 the total revenue from advertising in Bulgaria was 161 million levs (around 100 million USD). Online advertising accounted for 2% of that revenue with 3.22 million levs (around 2 million USD). The current trend is for an increase in online advertising spends, with most of the advertising agencies declaring they have increased budgets for online marketing in year 2005.

Resources:
www.vitosha-research.comE-Bulgaria 2005 study
www.aresearch.org
www.pressboard.info
www.banker.bg
www.investor.bg
www.scitoma.com

Georgi Georgiev

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