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BMI's Executive Summary[TOP] Market Overview While one of the smaller markets in the Latin America region, the total value of Venezuelan domestic spending on IT products and services should pass US$2bn in 2009 and US$2.5bn by 2012. Overall, the IT market is projected to grow at a compound annual growth rate (CAGR) of 7% over the 2007-2012 period. Despite income disparities and the likelihood of slowing private consumption, a PC penetration rate of less than 12% indicates plenty of potential organic growth. Expansionary government fiscal policies provided a boost to IT spending in 2007 but the overall economic outlook is more problematic, with GDP/capita growth likely to slow as the forecast period progresses. Despite this economic context, the retail sector should continue to perform reasonably well in terms of PC sales growth due to more affordable computers. The enterprise should sector also represents an opportunity in the forecast period, but overall levels of investment are likely to remain relatively low compared to some countries in the region. The majority of opportunities will be in the oil industry sector, which is enjoying record profits and revenues, which seems likely to translate into more IT and modernisation projects. Government policies and programmes will continue to shape the market: a focus on science and technology independence should mean further efforts to encourage domestic production of cheaper computers. Industry Developments Leading state telecoms service provider CNTV tendered for a contract to supply equipment for its 'Internet Equipado' programme for November and December 2007. The programme, launched last year, allows the company's subscribers to purchase a computer bundled together with its fixed line services. Subscribers can choose between a desktop or portable computer which can then be paid for on credit over 24 months. In November 2007, production was due to start at a new IT production facility set up by Venezuela's national IT guiding body CENIT with a 5000 computers/month capacity. The government plans to spend US$2.3mn on the new facility, which will complement the production capacity of state owned IT company Venezuela de Industria Tecnologica (VIT). Competitive Landscape Venezuela's IT competitive landscape has been dominated by the Chávez government's efforts to provide cheap PCs for lower-income consumers in Venezuela and Latin America. Domestically produced 'clones'have more than 50% of the market with Lenovo, Dell, HP, and Toshiba among the leading private sector vendors. Since its foundation in October 2005, state-owned IT company Venezuela de Industria Tecnologica (VIT) has already captured a close to 5% PC market share and in 2007 the company expected to sell 80,000 units priced at VEB900,000. A similar situation pertains in the software field, where considerations of supporting the domestic software industry lie behind the government's promotion of open source software. In 2007 the government announced that it had selected Uruguayan software firm Artech to deploy its K2B integrated management platform for all of the MTI (Ministry of Information technologies) offices and facilities. Computer Sales Hardware dominates Venezuelan IT spending more than in many Latin American markets, accounting for an estimated 66% of the 2007 total. BMI is projecting that Venezuela's computer and accessories market will have a CAGR of around 6% over the 2007-2012 period. For 2007, computer sales were put at US$740mn, and should pass the US$1bn mark by 2012. The main drivers of growth in the PC segment are lower prices and greater affordability, partly as a result of government cheap computer programmes and initiatives to encourage local production. Software Venezuela's software market is estimated to have been worth US$283bn in 2007, and market value is expected to pass US$300mn in 2008 and US$400mn by 2012. Software CAGR for 2007-2012 is projected at around 7%. Software has opportunities for growth over the next few years, despite a software piracy rate estimated at 86% in 2006, around 20% above the regional average. The market landscape is likely, moreover, to remain shaped by the government's drive to promote open source software. IT Services Venezuela's IT services market is estimated to have grown around 10% in 2007 to a value of around US$681mn. Slightly lower growth of 9% is expected in 2008. By regional standards, the percentage accounted for by services in this hardware dominated market is much lower than average at around 16%. However, BMI predicts that IT services will account for a steadily increasing portion of IT spending during the forecast period. High revenues from the oil industry will provide funds for spending on IT projects, which are often favoured in such circumstances. E-Readiness Because of the low levels of internet access the country, the Venezuelan government has generally been slow to roll out e-services. The recent decision by the government to launch in 2008 a consultation on anew telecoms law to promote competition may be a hopeful augur of progress. According to BMI estimates, the number of Venezuelan internet users reached 8.5mn in 2007, representing 18% of the population. The percentage of broadband subscribers in the general population, however, was only 2.4% with just over 1.1mn subscribers. |
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CONTENTSExecutive Summary
SWOT Analysis
Market Overview
Industry Forecast Scenario
Macroeconomic Forecast
Competitive LandscapeCompany Profiles
BMI Forecast Modelling
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