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3Q10 Venezuela Mobile Operator Forecast, 2010 – 2014: Venezuela will have 35.6 million mobile subscriber connections in 2014 with Digitel taking market share of 23.6%

3Q10 Venezuela Mobile Operator Forecast, 2010  2014: Venezuela will have 35.6 million mobile subscriber connections in 2014 with Digitel taking market share of 23.6%

Market Study
Published: August 2010
Pages: 118
Research from: ie market research
Sector: Mobile

From: GBP 312.50
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IEMR’s Mobile Operator Forecast on Venezuela provides over 50 operational and financial metrics for the Venezuelan wireless market and is one of the best forecasts in the industry. We provide five-year forecasts at the operator level going out to 2014. We also provide quarterly historical and forecast data starting in 1Q2003 and ending in 1Q2012. Operators covered for Venezuela include: Movilnet (CA Nacional Telefonos de Venezuela (CANTV)), Movistar Venezuela (Telefonica S.A.), and Telvenco S.A. Our Mobile Operator Forecasts are updated quarterly and are available for one-time delivery or through regular updates.

IEMR’s Global Mobile Operator Forecast covers 50 operational metrics of 200+ mobile operators in 50+ countries, making up 80% of the world’s population. Our forecasts are based on our proprietary, country-specific forecasting models. These models deploy multiple regression analysis and cross-impact matrices that estimate relationships between subscriber data, technology use and deployment data, overall economic and demographic changes expected in a particular country; and relate these to company operational and financial metrics.
Executive Summary

Subscriber growth is slowing down in Venezuela's wireless market
+4.0% industry average subscriber growth in 1Q.2010

• The operator-wide subscriber growth (YoY) was 4.0% in 1Q.2010, down from 15.0% in 1Q.2009.
• Digitel (Telvenco)'s subscriber growth (YoY) was the highest among operators at 14.9% in 1Q.2010 (up from 11.5% in 1Q.2009).
• Movilnet's subscriber growth was 6.1% in 1Q.2010 (down from 17.0% in 1Q.2010)

ARPUs are increasing rapidly across operators
+20.9% industry average ARPU growth in 1Q.2010

• The industry average monthly ARPU growth in 1Q.2010 was 20.9%, up from 19.4% in 1Q.2009.
• Movilnet's monthly ARPU increased by +22.5% (YoY) to reach VEF 49 in 1Q.2010.
• Movistar Venezuela and Digitel also kept their double-digit ARPU growth rates at 23.7% and at 19.0% respectively in 1Q.2010.

Minutes of Use per Subscriber are decreasing in Venezuela
-4.9% industry average MOU/Sub growth in 1Q.2010

• The industry average MOU/Sub growth (YoY) continues to be negative at -4.9% in 1Q.2010.
• In 1Q.2010, MOU/Sub at Movilnet and Movistar were 83 minutes and 114 minutes respectively.

Strong EBITDA growth at Movilnet and Digitel in the latest quarter
+5.0% industry average EBITDA growth in 1Q.2010

• The industry average EBITDA growth rate in 1Q.2010 was 5.0% in 1Q.2010, down from 36.8% in 1Q.2009.
• Movilnet saw its EBITDA growth rate increase significantly from -0.8% in 1Q.2009 to 22.2% in 1Q.2010. Digitel's EBITDA growth rate was also strong at 26.2% in 1Q.2010.
• On the other hand, EBITDA growth (YoY) at Movistar declined from 47.3% in 1Q.2009 to -1.4% in 1Q.2010.

So what is IEMR’s Forecast?

The number of total subscriber connections in Venezuela to reach 35.6 million in 2014

• The number of mobile phone users who have multiple phone numbers is increasing, and this has caused wireless penetration rates to exceed 100% in many markets around the world. The wireless penetration rate in Venezuela was 102.0% in 1Q.2010.
• We expect that the number of wireless subscriber connections in Venezuela will increase from 29.3 million in 2009 to about 35.6 million in 2014.
• Our model predicts that Movilnet will have approximately 15.8 million mobile subscribers by the end of 2014.

Digitel's subscriber market share will be increasing over the next five years

• Movilnet will continue to be the largest operator in the country with a subscriber market share of 44.3% in 2014, according to our model.
• We expect that Digitel's market share will increase from 21.5% in 2009 to about 23.6% in 2014.
• On the other hand, we forecast that Movistar's market share will be declining over the next several years to reach 32.1% by the end of 2014.

ARPU levels in Venezuela will be increasing from 2010 to 2014

• ARPUs will continue to rise in Venezuela. We forecast that the industry average monthly ARPU will increase from VEF 46 in 2009 to VEF 59 in 2014.
• Movistar will continue to receive the highest monthly ARPU among the Venezuelan operators. We forecast that its monthly ARPU will increase to VEF 84 in 2014.
• On the other hand, Digitel's monthly ARPU will remain much lower at approximately VEF 25 - VEF 26 over the forecast period, 2010 to 2014.

Movistar will continue to enjoy higher level of profitability than Movilnet and Digitel

• Movistar's EBITDA margin is one of the highest in the world. We expect that Movistar's EBITDA margin (calculated as EBITDA / service revenue) will remain at about 60% over the next two years.
• In contrast, we expect that Movilnet's EBITDA margin will remain in the range of 18% - 19% over the next eight quarters.

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