Abstract
Venezuela’s mobile market creeps ever closer to 100% penetration with
27.6mn subscribers at the end of
Q109. Growth in the market has inevitably
slowed as the market approaches maturity, but BMI
anticipates a
respectable level of growth to continue in the market as state-owned
incumbent, Compañía
Anónima de Teléfonos de Venezuela
(CANTV), continues its focus on low-income subscribers. The
operator is
largely responsible for all the growth in the fixed-line and broadband markets
and produced
most of the growth in the mobile market in Q109. The company
no longer produces a breakdown of its
subscriber figures, but it appears
to be the driving force behind the Venezuelan telecoms market. Its new
services and packages have been encouraging greater numbers of Venezuelans
into the telecoms market,
many for the first time.
May saw the launch
of the first Venezuelan-produced handset from the government’s joint
venture with
China’s ZTE. The ‘Bolivarian’ handset went
on sale on Mother’s Day in Venezuela and reportedly sold
out of
handsets on its first day. The cost of the handset is considerably lower than
any other sold by
Movilnet, CANTV’s mobile arm, and is available
exclusively to the state-owned operator. President
Chávez has hailed
the new handset and stated plans to expand into other Latin American markets.
While
the handset may not significantly spur growth in the market, it will
certainly enable many subscribers to
acquire a new handset. More advanced
services and models are available from Digitel and Movistar,
both of which
have launched 3G services although they are focusing on mobile broadband in
the short
run.
The broadband market continues to report strong growth,
and the increases reported in the first quarter of
2008 show that there is
unlikely to be a significant slowdown in the expansion of services.
Alternative
operators provide some competition to CANTV, but the
incumbent’s prepaid services certainly seem to
appeal to the
market.
Venezuela saw an improvement to its Telecoms Market score in
BMI’s Business Environment Rankings
in Q409, although it retained
its position in the market. Greater ARPUs reported by Movistar indicate
that
the market has been quite resilient in the face of economic turmoil,
but BMI believes that ARPU at
Movilnet is likely to have declined somewhat
as it focuses on lower income subscribers. Movistar has
launched its 3G
network, and Digitel also followed suit, although the latter stated it would
delay further
roll-out of services in light of ongoing turmoil in the
financial markets and the economy. GDP is expected
to decline in 2009 and
then further in 2010, giving Venezuela one of the lowest Country Risk scores
in
the region.
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