In Venezuela they estimate a 90% drop in cell phone sales ...

In Venezuela they estimate a 90% drop in cell phone sales …

July 15, 2014

“Foreign currency allocations have been extremely limited so far this year.” The statement could well describe the situation of many sectors of the economy, but corresponds to Patricia Valladares, president of the Chamber of Telecommunications Services. Delays in the delivery of dollars to the industry will have consequences that users will suffer with respect to their ability to access communication equipment and new technologies.

A consultation with high-level sources in the sector allows making forecasts of the performance with which the telecommunications operators will close the year. An executive consulted began his analysis with this phrase: “If food and medicine are lacking, it should come as no surprise that there are no cell phones in formal sales establishments.” His calculations are not promising: he anticipates that at the end of 2014 mobile phone sales will have had a 90% drop. “Last year companies only brought 20% of the equipment to the market due to the shortage of dollars, but this year it will be worse. We believe that it will not exceed 10%, “he warned.

The difficulties in the cell phone market were even recognized by Manuel Fernández, Minister of Science, Technology and Innovation and president of the Cantv. In a meeting with journalists in May, he admitted the existence of “imbalances” in the supply and did not want to give a forecast of when they would be solved: “It would be reckless.”

Connoisseurs of the import business consider that the national market demands between 8 and 10 million pieces of equipment per year.

The telecommunications industry is capital intensive. It is estimated that in the Venezuelan case it requires between 1 and 1.5 billion dollars a year to operate. Market players estimate that investment in the sector has fallen between 30% and 50% since 2011 due to a lack of foreign exchange. For 2014 the projections are no better. The interviewee estimates that at the end of the year the disbursement will not go beyond 400 million dollars. That is, only 26% of the annual requirement.

via Operators will reduce cell phone sales by 90% – Policy – Smart Environment.

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