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Venezuela Telecommunications Report Q2 2009Product Type: Market Research ReportPublished by: Business Monitor International Published: June 2009 Product Code: R302-6356 Description December 2008 brought good news for all of Venezuela’s mobile operators. Market leader Movilnet, themobile arm of incumbent CANTV, finally launched its GSM network in two states, eight months after ithad intended to launch the new platform. The operator’s president, Jacqueline Farías, indicated that theroll-out would continue at a slow pace in order to guarantee that the network coverage and quality was ona par with its existing CDMA network. The operator also announced its intention to offer 3G servicesover its new network by the end of 2009.Venezuela joined the list of Latin American mobile markets to have seen 3G launches in 2008 whenTelefónica’s Movistar launched a UMTS/W-CDMA network in the greater Caracas area. The initialservices available are predominantly mobile broadband and data based, but Movistar has said it willexpand the applications available as it moves its network coverage outside the capital. A total ofVEF280mn will be invested over the first two phases of introduction, a considerable investment forMovistar. However it now has the advantage of being the first to bring 3G value-added services to themarket and this will do nothing but improve its reputation. While the operator’s market share improved inQ308, BMI does not believe that Movistar will necessarily try to compete directly with Movilnet. Thegovernment-owned operator is heavily focused on increasing telecoms usage for lower incomesubscribers, leaving the high end of the market open to operators such as Movistar and Digitel. Movistarhas introduced a pay-TV service which is clearly aimed at the high end of the market. Meanwhile Digitel received 10MHz of spectrum in December 2008, for which it paid US$26mn,allowing it to improve services in the eastern and western regions. The operator had been awarded thespectrum in May 2008 but had to wait to the end of the year for delivery. The company’s results, based onregulatory data, show a slight decline in market share and still the highest prepaid subscriber base in thecountry. However, Digitel has stated its intention to launch 3G services before the end of Q109, whichwill be beneficial in improving its subscriber mix and boosting its revenues. Developments in the mobile market mean that we have maintained our optimistic view of mobile marketgrowth for Venezuela. Following the introduction of new mobile data services analysis we have leftfixed-line and broadband data untouched over this quarter and will give a full update in the next report.A lower regulatory score and a fall in its country risk rating has seen Venezuela drop to 10th place in ourrankings, one place lower than previously. Venezuela faces a number of political and economic threats,with the drop in oil prices likely to impact the economy in the near future. We have also lowered theregulatory score for Venezuela following the nomination of CANTV’s president as Minister ofCommunications. BMI had held off decreasing the rating as the change had no immediate impact on themarket, but we have since seen no indication of any moves towards promoting competition. Table of Contents
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