Internet and e-commerce industry in Bulgaria

Bulgaria, that represents one of the countries in the Balkans in south-eastern Europe, appeared to become the third-largest country in Southeast Europe (after Romania and Greece). Bulgaria is a member of the European Union, NATO, the United Nations and the World Trade Organization. According to official statistics the country has a high Human Development Index of 0.840, ranking 61st in the world in 2009.

Spending 0.4% of GDP on scientific development and research, Bulgaria can boast about several important discoveries and inventions, including the world's first electronic digital computer, the first electronic digital watch, photoelectrets, the last forming an important step in the development of the first photocopier machine. Among Bulgaria's most advanced scientific branches computer technology features highly, that let the country become known as the Silicon Valley of the Eastern Bloc in the 1980s.

Moreover, Bulgaria ranked first in Europe in terms of IT-certified specialists per capita at the end of 90s and 8th in the world in total ICT specialists, out-performing countries with far larger populations, according to 2005 data of outsourcingmonitor.eu. Besides, Bulgaria operates one of the most powerful supercomputers in Eastern Europe, an IBM Blue Gene/P, which entered service in 2008.

Turning to Bulgaria’s telecommunications sector, it’s important to note that earlier in 2007 Bulgaria set regulation, intended to be aligned with that of the EU. The effects of the implemented legislation, that expected operators offering broadband Internet by other means will start offering ADSL, was felt as alternative operators started capturing market share in the liberalized fixed-line market, although at a slow pace.

Nevertheless, Bulgaria’s ICT infrastructure has prospered from the entry of new DSL operators and its ability to keep up outdated technologies.

ADSL was introduced in Bulgaria after the privatization of the state monopoly Bulgarian Telecommunications Company (BTC) in 2004. Since then the availability of Internet has been widely increased and at present connection is offered in the majority of towns and villages around the country. The deployment of ADSL services impacted the increase of Internet usage.

As the mobile market continues its dynamic increase at the expense of fixed-line market, with a third GSM operator launching services in 2005. And all three main operators were awarded 3G licenses and a trial service has been launched.

Besides the other type of Internet connection, LAN (local area network) exists, representing the most widespread internet access in Bulgaria. Over 60% of the consumers use this type of internet access, because of the very high speeds and excellent service support.

The incumbent, BTC, and other large ISPs even offer FTB (Fiber to Building) services. One more reason to choose this type of Internet connection is the variety of services, offered by most of the ISPs: IPTV, VOIP, VOD. The biggest ISPs have networks in the following largest cities: Sofia, Plovdiv, Burgas, Varna, Veliko Tarnovo, Lovech, Ruse and Blagoevgrad.

Currently, the great amount of Internet Services Providers operates successfully in Bulgaria, exceeding 300 across all the country, among them there are:

• Dialer.net
• Go-Link Network
• Interbulnet
• Netaway
• Orbitel, Inc, according to isp.thelist.com.

Country’s national Internet top-level domain (ccTLD) is .bg, operated currently by Register.bg. The registration agreement cost €30 per year (or to be exact€36, including value added tax).

Earlier, until mid-2006, the price for one-time.bg domain registration had equaled $50 per year (total of $120 including VAT for the first year). Actually, these prices considered to be very high for the local standards, so many Bulgarian sites are now registered under .com (especially bg.com), .org, or .net domains, as the registration costs are significantly lower from $8 to $12 per year) and less of a bureaucratic hassle is seen.

Meantime, some restrictions for .bg domain registration exist in the country. Among them: the domain can be registered by Bulgarian companies and organizations, or foreign companies that have registered branches or commercial representatives in Bulgaria; the domain name has to represent the company name or its abbreviation. In general any name can be used if it is first registered as a trade mark at the Bulgarian patent office.

However, since 2008, Register.BG simplified the procedures of registration, letting accomplish it without providing documented grounds (trademarks, company names) for the name.

Since 2006, Register.bg started proposing new, third-level domains with suffixes .a.bg, .b.bg etc. (a Latin letter or a digit +.bg), at a lower cost (€12per year including VAT), with less restrictions and no dispute resolution. Since September , 2009, Register.bg started accepting second- and third-level domain names in the Cyrillic alphabet (where only letters found in the Bulgarian language can be used).

In October, 2007 .bg domain became DNSSEC (Security Extensions for DNS) signed.

As for the Internet penetration, the last decade showed a significant increase of over 515%. So, currently the volume of Bulgarians connected to the web makes up almost 37% with 2,647,100 subscribers. To compare, the year 2000 showed the picture of slightly over 5% usage level, which had soared to almost 29% by 2006, according to internetworldstats.com data. 

In spite of the rapid increase, the Internet penetration level in Bulgaria still remain s under the European average, though the country strives to the ICT leadership. With below average broadband connectivity in enterprises, Bulgaria indicates low levels of ICT skills among the employed. Besides, the development of e-commerce and e-business sector is relatively slow.

E-signatures and internet telephony, both prominent in the country, that could signal readiness for future online market development and a source of prominent economic gains.

According to Economist Intelligence Unit, Bulgaria is the EU top 3 for implementation of electronic signatures as a vital and complex component of a functioning digital legal framework. Along with the neighbor, Romania, Bulgaria has adapted new global service models, including IT and knowledge outsourcing dependent on service delivery networks like Internet telephony.

This Balkan country shows good signs of ICT progress, with a great amount of ISPs offering the variety of Internet related services, registration prices reductions, eliminating strong restrictions, a lot of IT- certified specialists, etc. Despite e-commerce sector considered not to be developed enough in Bulgaria, in comparison with other European states, it’s actually only a matter of time the country reaches the EU leaders’ level in terms of ICT an e-commerce progress.