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Romania Information Technology Report Q2 2011


Romania Information Technology Report Q2 2011

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Price $530.00
Meta Description No
Publisher Business Monitor International
Date of Report Apr 15, 2011
Quick Overview
Market Overview Romanian IT spending is expected to report a modest expansion in 2011, as the economy recovers from the economic downturn. However, consumer and business IT spending will remain constrained, at least in H111, by deleveraging and a fiscal austerity programme, keeping spending below 2008 levels.
In 2010, household computer sales outperformed Romania’s general retail sector, which has shown little sign of recovery since 2008.
In 2010, PC shipments were forecast by BMI to grow at a double-digit rate, boosted by base effects due to the steep contraction in PC shipments in 2009. However, due to an estimated 25% decline in average prices, revenues growth failed to keep pace with shipments. In early 2011, the market appeared to consolidate a recovery in many sectors, with new IT tenders in key verticals such as government, finance and telecoms.
In the medium term, the Romanian IT market’s strong fundamentals of low computer penetration, rising incomes and the effects of EU membership should support resumed expansion. The government is faced with implementing a fiscal austerity drive, but has pledged to use EU structural funds to try and encourage continued information society development.
Industry Developments The Romanian government continues to implement its e-Romania agenda, despite fiscal retrenchment. In January 2011, the justice ministry launched a tender to update the portal for the courts in Romania, as part of the e-justice initiative. Meanwhile, the National Tax Administration Agency (ANAF) is rumoured to be planning a major upgrade of its IT systems with support from the IMF. The IMF will assist ANAF officials to identify IT issues and to develop measures to improve revenues collection.
In July 2010, there were concerns among IT companies that the government’s introduction of a 24% value-added tax (VAT), from July 1 2010, could have a negative impact on demand for IT products and services. Retail sales were expected to be most affected, because of the likelihood that retailers would pass on the tax to consumers in the form of higher prices. Meanwhile, demand for IT services from companies in the consumer goods and retail sectors could also be affected.
The Romanian government will contine to look to EU structural funds to support ICT investment. A total of EUR383mn has been earmarked for Romania’s ICT sector for the 2007-2013 period. Around 70% of the money earmarked for the Ministry of Communications and IT is to expand broadband communications infrastructure.
Competitive Landscape In 2011, IT vendors and retailers are focused on tablet notebooks, as an emerging growth area, with more vendors expected to release rival tablet devices to Apple’s iPad. In December 2010, Vodafone Romania started offering its residential subscribers the Samsung Galaxy Tab, which was available from the operator with a three-year mobile data subscription for EUR399.
In September 2010, fellow US giant IBM signed a 10-year, multi-million dollar data centre services ageement with Petrom, the largest oil and gas producer in south east Europe. Under the agreement, Petrom will outsource the operation of its data centre infrastructure to IBM, which will provide services such as cloud computing, hosting, installation, and co-location to Petrom and affiliated companies. One IT services market trend has been the greater movement of telecoms service providers into the IT services space. In May 2010, the Ministry of Education and Research awarded leading Romanian telecoms company Romtelecom a EUR5.2mn contract to create an e-learning portal. Romtelecom will partner with local software company Siveco Romania to provide customer software and educational software development and training services, as well as supplying hardware such as computers and photocopiers.
Computer Sales BMI forecasts that the Romanian computer hardware market (including desktops, notebooks and accessories) will be worth US$871mn in 2011, with 10% growth compared with 2010. In 2010, PC shipments and revenues grew strongly, with a double-digit year-on-year (y-o-y) increase in H110, compared with the corresponding period of the previous year. However, average prices declined and Romanian demand for computer hardware will remain constrained in both consumer and business segments due to continued deleveraging and rising unemployment.
The low level of computer penetration, at less than 25%, still represents an opportunity for vendors during our forecast period. While recent statistics suggested that 43.5% of urban inhabitants in Romania owned a computer, the nationwide figure for home computer ownership was just 24.6%.
Software The market value of legal packaged software in 2011 is projected by BMI at around US$242mn, with double-digit growth from 2010. As the economy emerges from recession in the second half of 2011, investments by businesses and the public sector should see spending on software increase to US$430mn by 2015. In early 2011, Romania’s Banca Transilvania, which has a 500 branch and agency network, said that it had invested US$19.4mn in a new core banking system.
The enterprise resource planning (ERP) market is still in its early phase, where larger companies and organisations still provide strong demand. In other Central and Eastern European (CEE) states, the focus of opportunity has now shifted more towards the small and medium-sized enterprise (SME) sector. However, demand has gradually become more sophisticated, with increasing interest in support and technical assistance.
Services The Romanian IT services market is projected to be worth US$376mn in 2011, accounting for around 26% of total IT spending in the country. Spending on IT services was expected by BMI to have contracted in 2009 as enterprises cancelled or postponed IT projects as a result of the economic situation. However, a gradual recovery was forecast for 2010 and 2011.
BMI expects IT services spending to increase to US$655mn by 2015, driven by an inflow of EU funds and foreign investment. Demand for basic enterprise software and hardware systems is far from saturated and will continue to be an underlying driver for the services market.
E-Readiness The issuance of a WiMAX licence to National Radiocommunications Company in Q408 as well as a CDMA450 licence should help boost broadband growth in the country, particularly in the rural regions. After receiving no bids in its tender for two further WiMAX licences in Q109, the communications authority, the ANC, announced that it was slashing the licence fee and would relaunch the tender. This signalled the regulator’s intent to drive growth in the sector.
Table of Contents
Executive Summary ........................................................................................................................................ 5
Market Overview .................................................................................................................................................................................................. 5
Industry Developments ......................................................................................................................................................................................... 5
Competitive Landscape ......................................................................................................................................................................................... 6
Computer Sales ..................................................................................................................................................................................................... 6
Software ................................................................................................................................................................................................................ 6
Services ................................................................................................................................................................................................................. 7
E-Readiness .......................................................................................................................................................................................................... 7
SWOT Analysis ................................................................................................................................................ 8
Romania IT Sector SWOT ..................................................................................................................................................................................... 8
Romania Telecoms Industry SWOT....................................................................................................................................................................... 9
Romania Political SWOT ................................................................................................................................................................................... 10
Romania Economic SWOT .................................................................................................................................................................................. 10
Romania Business Environment SWOT .............................................................................................................................................................. 11
IT Business Environment Ratings ................................................................................................................ 12
Europe ................................................................................................................................................................................................................ 12
Table: Regional IT Business Environment Ratings ............................................................................................................................................. 15
Europe IT Markets Overview ......................................................................................................................... 16
Germany Market Overview ............................................................................................................................ 22
Government Authority ......................................................................................................................................................................................... 22
Industry Developments................................................................................................................................. 29
Industry Forecast Scenario ........................................................................................................................... 33
Table: Romania’s IT Sector – Historical Data & Forecasts (US$mn, unless otherwise stated) .......................................................................... 36
Country Context .................................................................................................................................................................................................. 37
Table: Rural/Urban Breakdown, 2005-2030 ...................................................................................................................................................... 37
Table: Consumer Expenditure, 2005-2010 (US$) ............................................................................................................................................... 37
Internet ............................................................................................................................................................................................................... 38
Table: Internet – Historical Data And Forecasts ................................................................................................................................................ 38
Macroeconomic Forecast ................................................................................................................................................................................... 40
bmi_country} – GDP BY EXPENDITURE .......................................................................................................................................................... 42
Competitive Landscape ................................................................................................................................ 43
Hardware ............................................................................................................................................................................................................ 43
Software .............................................................................................................................................................................................................. 45
IT Services .......................................................................................................................................................................................................... 46
Internet Competitive Landscape ......................................................................................................................................................................... 48
Company Profiles .......................................................................................................................................... 49
Microsoft............................................................................................................................................................................................................. 49
Dell ..................................................................................................................................................................................................................... 51
HP....................................................................................................................................................................................................................... 52
Country Snapshot: Romania Demographic Data ........................................................................................ 53
Section 1: Population .......................................................................................................................................................................................... 53
Section 2: Education And Healthcare ................................................................................................................................................................. 54
Table: Vital Statistics, 2005-2030 ....................................................................................................................................................................... 54
Section 3: Labour Market And Spending Power ................................................................................................................................................. 55
Table: Employment Indicators, 2001-2006 ......................................................................................................................................................... 55
Table: Consumer Expenditure, 2005-2010 (US$) ............................................................................................................................................... 55
Table: Average Annual Wages, 2006-2010 ......................................................................................................................................................... 56
BMI Methodology .......................................................................................................................................... 57
How We Generate Our Industry Forecasts ......................................................................................................................................................... 57
IT Industry .......................................................................................................................................................................................................... 57
IT Ratings – Methodology ................................................................................................................................................................................... 58
Table: IT Business Environment Indicators ........................................................................................................................................................ 59
Weighting ............................................................................................................................................................................................................ 60
Table: Weighting Of Components ....................................................................................................................................................................... 60
Sources ............................................................................................................................................................................................................... 60




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