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Venezuela - Telecoms, Broadband and Forecasts

Venezuela is a country with high telecom growth potential. The report covers trends and developments in telecommunications, mobile, Internet, broadband, pay TV, and converging media including VoIP and IPTV developments. Subjects include:

  • Market and industry analyses, trends and developments;
  • Facts, figures, and statistics;
  • Government policies and regulatory issues;
  • Infrastructure;
  • Major players, revenues, subscribers, ARPU;
  • Internet, VoIP, IPTV;
  • Mobile voice and data markets;
  • Broadband (DSL, cable TV, WiMAX, BPL, etc);
  • Convergence and pay TV market;
  • Scenario forecasts for the fixed-line, mobile, and broadband markets.


While basic telephony stagnates in the rest of the region, Venezuela has been reporting double-digit growth figures for its fixed-lines in service. Teledensity has risen from levels that used to be abysmally low, given the country’s other economic indicators, to somewhat higher than average for Latin America. State-owned CANTV has been undertaking social programs for the disadvantaged sections of the population and has been expanding the reach of its telephone network to rural areas with poor or nonexistent telecom services.

Venezuela’s mobile penetration is one of the highest in the region, with subscribers still growing strongly even while preparing to cross the 100% penetration barrier. Venezuela is also a regional leader in terms of SMS traffic, the number of text messages surpassing the number of minutes the average Venezuelan talks on a mobile phone. The country remains one of the last bastions of CDMA in Latin America, but the two leading mobile operators, Movilnet and Movistar, are finally turning to GSM.

Prepaid services have become popular in fixed-line telephony and broadband as well as in the mobile market. As a result, prepaid has been largely responsible for the rapid growth of mobile services in the country. After being a major driver in Venezuela’s mobile market, however, the tide is changing, with the proportion of prepaid mobile users beginning to ebb in favour of postpaid accounts.

Unlike mobile telephony, Venezuela’s broadband penetration is lower than average for Latin America. CANTV dominates the market with its ADSL service; in fact, lack of competition has made ADSL expensive compared with neighbouring countries, and the speeds are slow. However, new technologies such as WiMAX and BPL are proving successful in Venezuela, and convergence solutions are also popular.

Venezuela, one of the world’s top ten oil-exporting countries, has the highest GDP per capita in Latin America bar a few Caribbean islands. But after years of oil-funded growth, the country faces plummeting oil prices as a result of the global financial crisis. The government believes it can weather the downturn thanks to large international reserves.

Depending on the severity of the slowdown for Venezuela, the fixed-line market may flatten, albeit only temporarily. Broadband may also suffer as companies cut their ICT spending and residential customers shift their focus to the most essential everyday needs. The mobile sector may be close to reaching maturity, although market leader Movilnet’s new GSM network should help to buoy the market in 2009/10.

Key highlights:

  • By installing new lines and consolidating all state-owned fibre optic networks, including those of Telecom Venezuela, power utilities Cadafe and Edelca, and state oil company PDVSA, the renationalised CANTV expects its fibre optic installed capacity to reach 15,400km by 2010, up from 7,700km in 2006.
  • Venezuela launched its first satellite, called Venesat-1 or Simon Bolivar 1, in October 2008. The government said Venesat-1 would be used for telemedicine and e-education programs, as well as to provide telephony, high-speed Internet, and TV services to isolated areas.
  • Venezuela saw its first 3G UMTS mobile services in December 2008, launched by Movistar. The other two mobile companies expect to launch services in 2009.
  • Movilnet finally launched a GSM network in December 2008 with coverage over selected less-densely populated areas; major cities such as Caracas would have to wait well into 2009 to receive services. The GSM network will function alongside Movilnet’s CDMA platform.
  • CANTV plans to launch IPTV at the end of 2009 or early 2010, and has chosen ZTE as the system integrator for its IPTV platform.
Venezuela Internet, broadband and telecoms statistics - 2005 - 2008
Sector 2005 2006 2007 Sep 2008
Internet
Internet users (million) 3.36 4.14 5.72 6.72
Penetration rate 12.6% 15.3% 20.8% 24.2%
Annual growth 52% 23% 38% 27%
Broadband
Total subscribers (million) 0.36 0.54 0.86 1.17
Penetration rate 1.3% 2.0% 3.1% 4.2%
Annual growth 69% 51% 60% 51%
Fixed-lines in service
Total subscribers (million) 3.65 4.22 5.08 5.90
Penetration rate 13.7% 15.6% 18.5% 21.2%
Annual growth 9.1% 15.5% 20.5% 25.6%
Mobile telephony subscribers
Total subscribers (million) 12.50 18.79 23.82 26.67
Penetration rate 47.0% 69.5% 86.7% 95.9%
Annual growth 48% 50% 27% 21%
(Source: BuddeComm based on industry data)

Data in this report is the latest available at the time of preparation and may not be for the current year.

The following notes provide some background to our scenario forecasting methodology:
      This report includes what we term scenario forecasts. By describing long-range scenarios we identify a band within which we expect market growth to occur. The associated text describes what we see as the most likely growth trend within this band.
        The projections shown in the tables in this report are based on our own historical information, as well as on telecommunication sector statistics from official and non-official, national and international sources. We assume a possible deviation of 15-20% around this data.
          All statistics for GDP, revenue, etc are shown in US$, in order to maintain consistency within and between markets. At the same time we acknowledge that this can introduce some irregularities.
        For those needing an objective and high-level strategic analysis on Venezuela, this report is essential reading and gives further information on:
            Telecom market analysis and review following the renationalisation of the telecom incumbent CANTV, including government programs aimed at bridging the digital divide.
              Mobile market outlook and developments, including spectrum awards, network launches, and operators’ future plans.
                The start of 3G UMTS services in Venezuela.
                  Broadband market status, including ADSL, cable modem, the WiMAX services offered by MovilMax, and the BPL services offered by EDC.
                    The triple play models of cable TV companies NetUno and Inter.
                      How different scenarios are likely to affect the fixed-line, mobile, and broadband markets in the ten years to 2018.
                    Venezuela is a country with high telecom growth potential. The report covers trends and developments in telecommunications, mobile, Internet, broadband, pay TV, and converging media including VoIP and IPTV developments. Subjects include:
                        Market and industry analyses, trends and developments;
                          Facts, figures, and statistics;
                            Government policies and regulatory issues;
                              Infrastructure;
                                Major players, revenues, subscribers, ARPU;
                                  Internet, VoIP, IPTV;
                                    Mobile voice and data markets;
                                      Broadband (DSL, cable TV, WiMAX, BPL, etc);
                                        Convergence and pay TV market;
                                          Scenario forecasts for the fixed-line, mobile, and broadband markets.

1. KEY STATISTICS
1.1 Country overview
1.2 General outlook
2. TELECOMMUNICATIONS MARKET
2.1 Overview of Venezuela’s telecom market
2.2 Telecom market trends
3. REGULATORY ENVIRONMENT
3.1 Background
3.2 Regulatory authority
3.2.1 Conatel
3.3 Privatisation of CANTV
3.4 Telecom sector liberalisation in Venezuela
3.5 Renationalisation of CANTV
3.6 Telecom Venezuela (previously CVG Telecom)
3.7 Interconnect
3.8 Subsidised fixed-line tariff
3.9 Investing in Venezuela
4. FIXED NETWORK OPERATORS IN VENEZUELA
4.1 Overview of operators
4.2 CANTV
4.3 Movistar (Telefónica)
4.4 Digitel
4.5 NetUno (previously Veninfotel)
5. TELECOMMUNICATIONS INFRASTRUCTURE
5.1 National telecom network
5.1.1 Fixed-line statistics
5.1.2 Public payphones
5.2 International infrastructure
5.2.1 Submarine cable networks
5.2.2 Satellite networks
5.3 Infrastructure developments
5.3.1 Wireless Local Loop (WLL)
5.3.2 IP and Voice over Internet Protocol (VoIP)
6. INTERNET MARKET
6.1 Overview
6.1.1 Internet statistics
7. BROADBAND MARKET
7.1 Overview
7.1.1 Broadband statistics
7.2 Cable modems
7.3 Asymmetrical Digital Subscriber Line (ADSL)
7.4 Wireless broadband
7.4.1 WiFi
7.4.2 WiMAX
7.5 Broadband Powerline (BPL)
8. CONVERGENCE
8.1 Overview of media convergence
8.2 Triple play models
8.3 Pay TV market
8.3.1 Overview
8.3.1.1 Pay TV statistics
8.3.2 Cable TV
8.3.2.1 Inter
8.3.2.2 NetUno
8.3.2.3 SuperCable
8.3.3 Satellite TV
8.3.4 Broadband TV (IPTV)
8.4 Digital Terrestrial TV
9. MOBILE COMMUNICATIONS
9.1 Overview of Venezuela’s mobile market
9.1.1 Mobile statistics
9.2 Regulatory issues
9.2.1 Spectrum auctions
9.3 Mobile technologies
9.3.1 Digital
9.3.1.1 CDMA
9.3.1.2 GSM
9.3.2 Third Generation (3G) mobile
9.4 Major mobile operators
9.4.1 Movilnet (CANTV)
9.4.2 Movistar (Telefónica)
9.4.3 Digitel GSM
9.5 Mobile voice services
9.5.1 Prepaid services
9.5.2 Satellite mobile
9.6 Mobile data services
9.6.1 Short Message Service (SMS)
9.6.2 High capacity mobile voice/data services (CDMA2000 1x)
9.6.3 Broadband wireless data service (1x EV-DO)
9.6.4 BlackBerry
9.6.5 iPhone 3G
10. FORECASTS
10.1 Forecasts - fixed-line market to 2018
10.1.1 Scenario 1 - higher fixed line growth
10.1.2 Scenario 2 - lower fixed line growth
10.2 Forecasts - broadband market to 2018
10.2.1 Scenario 1 - higher broadband growth
10.2.2 Scenario 2 - lower broadband growth
10.3 Forecasts - mobile market to 2018
10.3.1 Scenario 1 - higher mobile market growth
10.3.2 Scenario 2 - lower mobile market growth
11. GLOSSARY OF ABBREVIATIONS
LIST OF TABLES
Table 1 - Country statistics Venezuela - 2008
Table 2 - Telephone network statistics - September 2008
Table 3 - Internet user statistics - September 2008
Table 4 - Broadband statistics - September 2008
Table 5 - Mobile statistics - September 2008
Table 6 - National telecommunications authority
Table 7 - Telecom revenues and investments (private sector) - 2001 - 2007
Table 8 - Telecom revenue by segment - 2007 - 2008
Table 9 - Fixed line market share by operator - 2003 - 2007
Table 10 - Fixed-line prepaid/postpaid ratio - 2001 - 2008
Table 11 - CANTV fixed lines in service and market share - 2001 - 2008
Table 12 - Movistar - WLL lines - 2004 - 2008
Table 13 - Fixed lines in service and teledensity - 1997 - 2008
Table 14 - Public payphones - 1997 - 2008
Table 15 - Telecentres/cybercafés - 2001 - 2008
Table 16 - Internet users and user penetration rate - 1998 - 2008
Table 17 - Dial-up subscribers - 2000 - 2008
Table 18 - Dial-up and broadband market share - 2000 - 2008
Table 19 - Broadband subscribers and penetration rates - 2000 - 2008
Table 20 - CANTV ADSL subscribers - 2001 - 2008
Table 21 - Pay TV subscribers and penetration rates - 1997 - 2008
Table 22 - Mobile subscribers by operator and technology - September 2008
Table 23 - Mobile subscribers and penetration rate - 1997 - 2008
Table 24 - Market share by mobile operator - 2001 - 2008
Table 25 - Evolution of ARPU in Venezuela - mobile operators - 2005 - 2007
Table 26 - Market share of mobile market by technology - 2004 - 2008
Table 27 - Movilnet mobile subscribers - 2000 - 2008
Table 28 - Movistar mobile subscribers - 2000 - 2008
Table 29 - Digitel mobile subscribers - 2003 - 2008
Table 30 - Mobile prepaid/postpaid ratio - 1997 - 2008
Table 31 - SMS messages sent - 2002 - 2008
Table 32 - Forecast fixed-line subscribers - higher growth scenario - 2008; 2013; 2018
Table 33 - Forecast fixed-line subscribers - lower growth scenario - 2008; 2013; 2018
Table 34 - Forecast broadband subscribers - higher growth scenario - 2008; 2013; 2018
Table 35 - Forecast broadband subscribers - lower growth scenario - 2008; 2013; 2018
Table 36 - Forecast mobile subscribers - higher growth scenario - 2008; 2013; 2018
Table 37 - Forecast mobile subscribers - lower growth scenario - 2008; 2013; 2018
List of Exhibits
Exhibit 1 - CANTV at a glance
Exhibit 2 - Major submarine cable networks landing in Venezuela
Exhibit 3 - Mobile telephony in Venezuela - historical overview - 1991 - 2000
Exhibit 4 - Mobile telephony in Venezuela - licensing regions
Exhibit 5 - Movistar company history
Exhibit 6 - Digitel - historical
Exhibit 7 - Infonet - historical
Exhibit 8 - Digicel - historical

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