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Viewing report
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Venezuela Broadband & Internet Services Markets
Frost & Sullivan, Dec 2003
Market Growth Hinges on Political and Economic Stability
The resurgence of the Venezuelan Internet and broadband access market depends on the quick restoration of the nations political and economic stability. Considering the intensity of political turmoil in Venezuela, Internet penetration has grown substantially mainly due to the public policies that facilitate Internet access in remote regions. Another reason is the proliferation of free infocenters and cyber cafes. Venezuelans are keen to adopt new technologies - evident from the growth of the cellular phones market - and service providers are cashing in on this eagerness to drive adoption of broadband Internet access solutions. The year 2004 is likely to witness the revival of investment and expansion plans that were frozen earlier due to abysmal market conditions.
This research examines the Venezuelan market for traditional (dial-up) Internet services and broadband access solutions such as asymmetric digital subscriber line (ADSL), cable modem, and others {integrated services digital network (ISDN), wireless, and satellite}. It also provides comprehensive information on the level of evolution of the broadband market and the competitive landscape, which includes Internet service providers (ISPs), telecommunications companies, and cable operators.
Addressing Regulatory Concerns to Stimulate Growth
Monopolistic competition prevailing in the fixed line telephony market and pending regulatory modifications are currently restraining Internet and broadband adoption in Venezuela. Appropriate changes pertaining to last mile access sharing for digital subscriber line (DSL) services and implementation of flat tariffs for dial-up connections is likely to reverse the negative market trend, says the analyst. The much-awaited regulatory changes will allow for new participants and thereby, increase the range of products available for customers. These developments are expected to eventually benefit customers as participants will be forced to reduce prices and improve the quality of interconnection facilities and other services.
Development of Broadband Access Service Suites Hold the Key to Future Success
Participants efforts to drive Internet adoption are yielding results, as evident from the growing awareness and the subsequent increase in market penetration of personal computers. This will eventually increase the demand for Internet connections and thereby, enlarge the addressable market. Broadband growth is likely to coincide with the revival of the small- and medium-sized enterprises and this could happen as early as 2004-05.
DSL services are expected to achieve high growth in the short term as the required infrastructure is already deployed in the majority of the regions and therefore, it is not necessary to make new investments to capture new clients. However, this trend is likely to change soon and cable modems are expected to emerge as the leading broadband technology in the residential segment, capturing nearly 60 percent of market share. New product and service releases with special focus on the development of broadband access service suite along with aggressive marketing and pricing strategies is likely to assist participants in retaining and attracting new customers, concludes the analyst.
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