1. Transparent and predictable development of BB ASTEL Conference 2010 Sofia, 27 April 2010

2. 2009: BB Bulgaria Research: ~ 1300 places with BB ~ 85% of population have an BB access opportunity

3. 2009: Government strategy PopulationCoverage Speed access % households with nearby fiber Wireless public places Special customers % Population % Populated areas Big cities > 30 k100%>20 Mbps80% hot spots Public administrations, hospitals, educational centers 51%0.6% Medium cities 10-30 k90%>10 Mbps80% hot spots 10%0.9% Poorly developed regions 5-10 k 50%>1 Mbps hot spots 39% 5% 98.5% 1.1% 1-5 к 10% 4.5% 1-2 k 9% 9.4% 0.5-1к 8% 15.8% < 0.5 7% 67.7%  Accessibility  Affordability  Regulation only if needed  Public – private partnership  Triple-Play enabled infrastructure  Reliability  Quality  Network openness  Neutrality

4. 201х: Technologies Big & Medium cities Hybrid solutions: Fiber (FTT N/C/B) + VDSL2 Fiber (FTT N/C/B) + DOCSIS 3 Fiber: FTTH Remote and underdeveloped regions Hybrid solutions Optics (FTT N/C/B) + АDSL2 Optics (FTT N/C/B) + VDSL Optics (FTT N/C/B) + DOCSIS 2/3 Wireless Solutions: 3.5G, LTE, WiMax

5. 201х: Economics - Market Average prices Pure BB:10-25 BGN Triple play service:20-30 BGN Market potential 12% density:< М 200 BGN/year EU density:< М 500 BGN/year

6. 201х: Economics - Investments By technology VDSL2€ 150-200/subscriber DOCSIS€ 200-250/subscriber FTTH € 400-700/subscriber Total investments – Single Infrastructure 12% density: € 400-700 М EU density: € 800-1,500 М

7. 201х: Economics - Operation The Strategy accounts for accessibility and affordability, but actually does not consider reliability and open access (shared use) Operational costs 8-12% of investments per annum: € 50-100 М/year

8. 201х: The Dilemma The Market in 10 years could possibly deliver € 1,000 - 2,000 М TCO of a SINGLE network in 10 years would require € 1,500 – 2,500 М Conclusions: The competitive market could not pay for even One (monopoly, but carrier performance) infrastructure in the next 10 years Obvious necessity of SIGNIFICANT but PRECISE state regulation In underserviced regions In regions with limited speed offerings

9. The 3 Faces of the State The State as a Regulator The State as a Law Maker and Law Enforcer The State as an Investor

10. The State as Regulator State refraining to regulate: Failure to enforce resource sharing Inability to ensure a healthy and loyal competition in strategic areas Lack of will to guarantee access and service standards Lack of synchronization between policy making and regulation Over-competition as a barrier to national coverage Main requirements towards telecom regulations Transparent policy on resources sharing Dialogue with business, consumers and NGO’s (in this order) Granted enforcement of relevant legislation Avoidance of over-regulation Re-definition of technology neutrality towards services and not for networks

11. The State as Lawmaker and Enforcer Development of a conception, addressing Information society 2020 Incorporation of new conceptions in the legislation Comprehensive audit and significant optimization of inter- sector procedures, having impact on telecommunication efficiency and effectiveness “Revolutionary” legislative amendments in domains of access to public infrastructures, rights of way and infrastructure build permissions Formal regulation of “last inch” (in building infrastructure)

12. The State as Investor Current trend State to play as an operator Decreasing operators’ income Network of Public Administrations A network of Ministry of Defense Networks of Ministry of Interior Unfair competition risk Considerable opportunity to support operators: A problem with ducting network A problem with in-building networks A problem with Vivacom’s cooper networks in rural areas Ownership and operation reliability of the infrastructure, build with public financing, from municipalities to the regions

13. 3 pilots: good, bur why? Advantages: Acquaintance of state institutions with: Telecom technologies Network implementation technologies, included Legislation Proven capability to master financial allocations Disadvantages: Emphasize only toward the network of State Administration No end-customer focus No guarantee for infrastructure sharing Network operation not guaranteed by a reliable entity No model(s) to replicate the pilots, assuring sustainable development No compliance to allowed sate support approaches/politics adopted by EU

14. From strategy to consumer Strategy - vision Programme – policies, business models, funding Projects Exploitation Services to consumers

15. The role of the operators Insufficient dialogue Minimum participation of the operators Lack of transparency upon arguments and decisions Readiness of the operators to help in preparing a REAL PROGRAM

16. Straightening the curve: from us or from them? Clear and defendable vision Intelligent and specific solution for specific surroundings Steady economic growth ACCEPTABE AND DEFENDABLE PROGRAM