Telefonicawatch Report #53 Extract: Local mobile production commences in Venezuela
12 April 2011
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Extract from Telefonicawatch, report #53. Click through for: the Executive Brief from this month’s report; the Report Snapshot; or to contact us for more information about the full 106-page report, this industry standard monthly report service, and ongoing subscription access.
Local mobile production commences in Venezuela
Movistar Venezuela trumpeted the commencement of mobile device production for the Latin American market at partner and Chilean handset maker Bess Mobile’s factory in Caracas.
Around VEF 200m (EUR33.3m) has been invested in the Bess site, which employs 80 staff directly and supports 200 indirect jobs. Devices being produced by the factory include a colour screen phone featuring an FM radio and targeted at the youth segment; and a device incorporating analogue television reception, an MP3 player, and video recording. The factory is set to put more lines into production as the year progresses, including 3G modems, tablet devices, feature phones with cameras, and devices with solar panels.
The agreement for the new factory to be established by Bess Mobile and Telefónica Venezuela was signed in early 2009, reportedly in response to rivals’ similar plans to establish domestic device manufacturing plants with major Chinese vendors Huawei and ZTE (Telefónicawatch, 2009.02). Venezuelan import and export tariffs and regulation were said to make it more attractive to build devices in the country. However, towards the end of 2010, before production had started, Telefónica attributed a delay in starting operations at the site to the high costs of importing raw materials into the country, which meant that importing finished products was still more economically viable (Telefónicawatch, #49).
Movistar indicated that the handsets would be unique to the operator in the country, although, at the time of the agreement with Bess Mobile, it was not thought that Movistar would have the devices on an exclusive basis. Whether the agreement was tightened to include exclusivity, or whether no competitor has chosen to sell the devices, is unclear.
Confirmation of the activity at the Bess factory coincides with an announcement of a partnership between Telefónica and ZTE for new devices aimed at the Latin American market (See separate report).
The factory is expected to be able to produce 1.5 million units in 2011, and the production lines are configured so that a range of devices across the mobile handset and netbook portfolio can be produced without altering the work rate.
[Further reference: Fábrica Bess ensambla los primeros modelos de celulares comercializados por Movistar -- Telefónica, 8 February 2011.]
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Report: #53
Covering: February-March 2011
Published: April 2011
Next report: May 2011
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