EU-Report Accession Bulgaria

Chapter 19: Telecommunications and information technologies

Bulgaria has made some progress since the last Regular Report in terms of both liberalisation of the telecommunications market and implementation of its regulatory framework.

As regards the liberalisation of the telecommunications market, the Communications Regulation Commission has taken measures to enhance its capacity with a view to the envisaged liberalisation of the telecommunications market from January 2003. In May 2002, the Council of Ministers approved a revised sector policy document which confirms the envisaged abolition of the current monopoly over voice telephony and leased lines from January 2003, and which outlines the concept for the development of a fully liberalised telecommunications market.

Amendments to the Telecommunications Act adopted in December 2001 aim at enhancing the regulatory framework. In line with this, in February 2002, the Communications Regulation Commission replaced the State Telecommunications Commission as the new regulatory authority for telecommunications. Moreover, the amendments envisage ensuring that senior staff of this body are appropriately qualified.

The National (Radio) Frequency Plan was approved by the Government in May 2002. This provides for the comprehensive release of frequency bands for GSM, DECT and SPCS.

In the area of the information society, rules for the structure of the Information and Communications Technology Development Agency were adopted in February 2002. Bulgaria participated actively in eEurope+ and shows commitment to the development of information society services.

Concerning postal services, amendments to the Postal Services Act were adopted in December 2001 and entered into force in February 2002. The regulatory functions in this field were transferred from the Ministry of Transport and Communications to the Communications Regulation Commission.

Overall assessment

Through amendments to the Telecommunications Law adopted in December 2001, a more effective separation between ownership and regulatory functions was achieved. An important step forwards was made concerning independence of the national regulatory authority (NRA). In June 2002, the Communications Regulation Commission had 218 staff, including the five members of the Commission. 49 of them were concerned with implementation of the telecommunications regulatory framework (excluding spectrum management).

The power of the Communications Regulation Commission to resolve disputes was enhanced compared to its predecessor and the services to be provided under an authorisation regime were extended. However, the capacity of the regulator needs to be enhanced if it is to be able to fulfil its regulatory responsibilities effectively. Further steps need to be taken to improve its financial independence. Consideration should be given to increasing staff levels and staff training to cope with the requirements of effective implementation of the existing legislation, taking into account that competition will be introduced from January 2003, as well as the increased responsibilities of the new acquis.

Penetration of mobile services has reached 16%. There are two GSM operators but UMTS licences have yet to be issued. Fixed network penetration reached 37% and is static. Network modernisation is seriously delayed and price rebalancing has a long way to go.

Investments will be necessary to meet spectrum monitoring needs across the whole country.

Bulgaria has not yet been able to evaluate the economic implications of fully implementing the universal service acquis so as to achieve affordability and a decision on this point remains outstanding.

In the area of postal services, the regulatory framework for postal services seems weak and the quality of service in the postal sector is limited. Work for licensing and registration has started (one licence and 20 registrations have been granted). Further implementing legislation needs to be adopted in order to achieve full compatibility with the acquis in this area, including universal service provision and quality of service. Bulgaria needs to ensure the supply of the universal service at the appropriate level of quality if full liberalisation takes place in 2003, i.e. before the NRA becomes fully independent.

Conclusion

In its 1997 Opinion, the Commission concluded that Bulgaria would have difficulties in adopting the EU model of telecommunications liberalisation because of the slow development of its telecommunications sector and of delays in the field of regulatory reform. It added that the competitiveness of the public network operator would crucially depend on a substantial increase in foreign investment and an in-depth internal restructuring, aiming in particular at improving the commercial flexibility of the company.

Since the Opinion, Bulgaria has made some progress in aligning with the acquis through the adoption of a law on telecommunications in 1998 and the establishment of a National Regulatory Authority. Legisaltive alignment has made good progress, but Bulgaria will need to transpose the updated acquis. Institutional structures are largely in place, but implementation of the legislation must be speeded up.

Negotiations in this chapter have been provisionally closed. Bulgaria has been granted a transitional arrangement (until 31 December 2008) regarding the implementation of number portability as required by the acquis. Bulgaria is generally meeting the commitments it made in the accession negotiations in this field.

Bulgaria should focus further efforts on completing transposition of the acquis and on its effective implementation in time for market opening on January 2003. Particular attention should be paid to the definition of operators with SMP, application of the principle of cost orientation, publication of the Reference Interconnection Offer and unbundled access to the local loop.

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