Public administration requires information systems worth 30 million euros

ROMANIAN ECONOMIC HIGHLIGHTS, July 5, 2010. Romania’s central and local public administrations need to implement 60 information systems that may cost 30 million euros, Chairman of the National Centre for the Management of the Information Society (CNMSI) Ionut Damian told a news conference on June 29. “For the first time in Romania, there is a switch form a reactive to a proactive approach particularly in the IT province. More than 20 systems are required nationwide by the central public administration and more than 40 by local public administration. The 60 systems are valued at 30 million euros, 500,000 euros on the average for each implemented system,” Damian explained. He added that once these systems are in place savings of 500 million euros would be possible in five years thereafter. Damian also said that most of the equipment and systems acquired by the central and local administrations are oversized. On June 17, 2010, the Ministry of Communications and Information Society (MCI), via the CNMSI, launched an open bid to the central and local public authorities for the upgrade of their IT&C infrastructure by using highly performing computing resources made available under the National Supercomputing Programme. IDG Romania, a local leading publishing and events company, on June 29 organized in Bucharest the 8th edition of an e-governance conference called “eGovernemnt – the engine for Romania’s IT&C market.” The event was held under the aegis of the Ministry of Communications and Information Technology and targeted decision makers from the local and central public administrations, companies, national corporations, and energy corporations.

Broadband Internet to continue expanding in 2010

Agerpres, Romanian Economic Highlights, June 21. The number of broadband Internet connections, from both landline and mobile points, will continue to rise in 2010, Chairman of the National Regulatory and Administrative Authority for Communications (ANCOM) Catalin Marinescu told a specialist conference on June 15. “Romania’s electronic communications industry has weathered better the 2009 crisis, although it was affected. The highest rises were in broadband Internet. Thus, the number of landline Internet connections stood at 2.8 million, up 12 percent from the year before. Out of the total, 2.5 million connections were for individual users. On the other hand, the number of mobile Internet connections reached 2.5 million, up 66 percent from the year before. We are expecting both segments to post significant increases in 2010 as well,” said Marinescu. Despite the rises in broadband Internet connections, Romania is still somewhere half way from European averages, which indicates the existence of important growth potentials in 2010. Marinescu added that traffic on landline phones declined 14 percent in 2009, a trend that will probably continue, because the free minutes of calls offered by mobile operators and mobility win customers. “The telephony market is mature. The penetration rate of mobile telephony is 124 percent, and there are not very much growth resources left for it. The offerings of all the providers of such services are designed to keep the existing customers, and I believe that more offerings will come because there is a cut-throat competition on the Romanian retail market,” said the ANCOM official. Marinescu indicated that thanks to offerings and promotions of phone operators Romanians are talking increasingly more. In 2009, they talked an average of 140 minutes a day, 28 minutes more than one year before. An important rise was recorded in the short message service (SMS), with the short texts sent having doubled to 7.4 billion in 2009. In 2009, a Romanian user sent 25 short texts a month on the average.

Romania to conclude transition to digital television in 2014

Agerpres, Romanian Economic Highlights, May 17. Romania will conclude the transition to the digital television by 2014, one year earlier than the deadline set by the European Union and the first two licenses for frequencies allowing the free-of-charge reception of 14 TV channels in digital format will be granted by July 30, 2010, Gabriel Sandu, Minister of Communications and Information Society, said on May 11. The official added the license fee for one multiplex ranges between 1 and 2,5 million euros, but is not lower than 1 million euros. The Minister pointed out the next 4 digital multiplexes will be granted by October 31, 2010. The National Authority for Management and Regulation in Communications (ANCOM) has launched the initiative of a regional calendar for the transition to digital television and the coordination of the way in which the digital dividend will be used, which will be adopted by all the countries in the region present at the debates of the Regional forum on digital dividend that took place in Bucharest. According to ANCOM, the ten states in the region that attended the reunion - Bulgaria, Croatia, Greece, Macedonia, Montenegro, Serbia, Slovenia, Hungary, Moldova and Romania - agreed that a harmonized approach of the digital dividend use at regional level is beneficial. Romania committed to the European Union (EU) to complete the transition to digital television by 2012. However, the Romanian authorities failed to observe the deadlines imposed by the EU, with the first one being at the end of 2009. At present, some 1.44 million people watch TV in Romania through terrestrial antenna, nearly 3.6 million people are cable TV subscribers, while 1.98 million people are subscribers of DTH platforms - DigiTV FocusSat, Max TV, Boom TV and Dolce.

Romania to implement eCall system

Bucharest, May 4 /Agerpres/ - The Romanian Communications and Information Society Ministry (MCSI) becomes today, in Brussels, a signatory party to a memorandum of understanding concerning the introduction of an in-vehicle eCall system in all new vehicles across Europe, MCSI reports in a press release. The document will be signed in the capital of Belgium by Communications Minister Gabriel Sandu, who says that the implementation of the new technical system should not be difficult. "The eCall initiative should not meet implementation difficulties, especially because the technical system of the 112 European emergency number in Romania is one of the newest and most advanced systems of its kind in Europe," says Sandu. According to MCSI, Romania supports the eCall system, which aims to reduce the number of victims in car accidents, considering that our country ranks among the first countries in the EU in terms of deadly car accidents. The memorandum will also be signed today by Malta, Poland, Belgium, Denmark and Luxemburg. eCall is an emergency call either generated manually by vehicle occupants or automatically via activation of in-vehicle sensors when an accident occurs. When activated, the in-vehicle eCall system establishes a 112-voice connection directly with the relevant PSAP (Public Safety Answering Point). This can drastically cut emergency response times, reduce severity of injures and save lives and reduce the social burden of road accidents. The eCall system is a pan-European service that will operate in all European countries. According to the estimates, up to 2,500 lives a year could be saved in Europe and, moreover, the eCall will reduce the number of traffic jams and secondary accidents. Romania is invited to be part of a consortium comprising 15 countries that will implement the pilot stage of the eCall system in Europe.

Communications Ministry's 2010 daring agenda

Digital television, Internet connection provided to the rural areas, the e-Romania portal and the electronic systems for public acquisitions and the national electronic system respectively are just a few of the points included in the strategy of the Ministry of Communications and Information Society (MCSI), about which Minister Gabriel Sandu talked in the exclusive interview to Agerpres. The concise analysis of the first 100 days at rule of the MCSI official also includes the current state of the ANCOM Ordinance for which Romania risks being subjected to the infringement procedure by the European Commission. Minister Gabriel Sandu said the ministry he is running has increased the number of acquisitions made under the Electronic System of Public Acquisitions (SEAP) from 1.55 percent to 15 percent, thus saving the state budget 1.1 billion euros. “We plan to further increase the number of e-procurement operations to 40 percent and we expect savings worth 2.5-3 billion euros to the state budget. Moreover, some 383 million euros were drawn during my mandate from the European Regional Development Fund. We have sealed a partnership with Austria, through which digital Austria will be transposed into digital Romania. Furthermore, in order to highlight the advantages of online connection, we developed last year 211 hotspots in Romania and I plan to install further 300 by the end of the year,” Sandu said. MCSI has already started to implement parts of the e-Romania national strategy, the minister pointed out. “For instance, the Single Contact Point, the former ASSI [the Agency for Information Society Services] has submitted a financing application from the structural funds to the Intermediate Body for the Promotion of Information, the request was approved and the financing contract was signed for the project named “Platform for the integration of e-governing services in the National Electronic System”. I will implement at least 10 operational services by mid-2010,” the minister underscored. The Romanian village will be connected to the Internet under the governmental strategy targeting the development of broadband electronic communications. MCSI aims at increasing the penetration rate of the broadband connections in households up to 40 percent in 2010 and 80 percent in 2015, as well as at raising the population’s access to the broadband electronic communication services to 100 percent by 2015. Following the discussion with the European Commissioner Neelie Kroes, I believe Romania has an extremely clear objective: the integration in the European digital agenda. Romania has 3 main targets: availability of broadband communication in each household, the transition from the analog to digital television by the end of 2011 and the e-Romania strategy. We don’t expect any further warning from Brussels, the minister concluded. Source: Agerpres.

Absolutely all households in Romania will receive digital signal by 2012, Minister of Communications and Information Society, Gabriel Sandu, announced on April 12, at the 2nd edition of the “Romania eGovernment” forum. According to the high official, beginning with 2011, when the implementation stage of 300 national operational services is expected to be completed, the state could save as much as 35 percent of its total expenditure. “Besides such reduced spending the state would most probably record once with the implementation of the national operational services, a percentage point of about 36 percent of the total transactions operated via the SEAP (Electronic System for Public Acquisitions) would be represented by the local and central public authorities,” the Minister explained. The MCSI head has also brought back into talks the e-Romania strategy, on which strategy the state is going to spend half a billion euros in the next four years. “e-Romania would be a strategy to, definitely, modernize the Romanian state,’ Sandu appreciated. More details about this strategy were given by the Minister of Communications in an interview to Agerpres, in early April. “We have already begun to implement components of the national e-Romania strategy. For instance, the Single Contact Point. The former Agency for Information Society Services submitted an application to obtain financing from structural funds, to the Intermediary Body for the Promotion of Information Society, which request was approved. The financing agreement was concluded for the project titled “Platform for integration of e-governing services with the National Electronic System.” By mid 2010, we will have at least ten operational services implemented,” Gabriel Sandu has said recently. Moreover, as regards the connection to Internet of the Romanian villages, the MCSI official specified that the implementation stage would follow a path as dynamic as possible. The 2nd edition of the forum ‘Romania eGovernment” opened doors in Bucharest on April 12. The organization of the event was supported by the MCSI, with important companies in the field, such Oracle, IPM and Iveco Romania due to participate. Source: Agerpres. 

Over 90 percent of Romania’s population will watch digital television by the end of 2015, Marius Fecioru, State Secretary with the Ministry of Communications and Information Society (MCSI) told a forum on digital dividend on March 30. “At the end of 2015, more than 90 percent of Romania’s population may benefit from digital transmission services, especially the national channels. At the same time, as of 2010, all TV receivers must have incorporated a compatible DVB-T system and older TV sets that do not have such system will be provided with a set-top box,” Fecioru said. ANCOM representative also mentioned the situation of the licenses organized for the six multiplexes made available by the Romanian state, which allow the reception of digital programs. “The state will grant six multiplexes. Two licenses will be provided based on selection by July 1, 2010 and 4 licenses will be granted based on competence by December. In the first case, the license fee amounts to 2.5 million euros, while in the second case the fee cannot be lower than 1 million euros and is paid by the winning bidder within maximum 30 days as of the date the winner is announced,” Marius Fecioriu pointed out. The Romanian government decided end-October 2009 to implement the digital terrestrial television services countrywide and to complete the process targeting the removal of the analog television services from the UHF frequency range by January 1, 2012 through Decision 1213/2009 for the approval of the Strategy on the transition from the terrestrial analog television to the terrestrial digital television and the implementation of the digital multimedia services throughout the country. This transition process is imposed by the obligations undertaken by Romania as member state of the European Union. The transition from the terrestrial analog television to the digital one must take into account several essential factors regarding the population's structure and characteristics, as well as the media and methods for accessing the television services. Thus, 70 percent of the Romanian households have a living standard below the average salary in the economy, while out of the 1,445,000 households with access to the television services only through the terrestrial antenna, nearly 38 percent are located in the urban area and 62 percent in the rural area. The transition process from the digital television consists of several stages. Thus, a minimum 60-percent coverage of the population and 50 percent of the territory must be secured by December 31, 2010 at the latest, with 90 percent of the population and 80 percent of the territory due to receive digital TV signals by December 31, 2011 and the analog broadcasting to be completely shut down on January 1, 2012. Source: Agerpres.

The aggregate business turnover of Romania’s IT industry stood at 8.2 billion euros in 2009, down 12 % from 2008 and close to the 2007 figures, reveal data in a recent study conducted by the Bucharest Computing Institute. The industry’s gross added value, or the contribution to the formation of the Gross Domestic Product (GDP), was 3.6 billion euros in 2009, down 14 % from the year before. The IT&C industry is shown to have had disparate reactions to the severe economic conditions of 2009. Thus, IT services were more seriously hit by recession than the hardware sector and electronics, while the companies that depended on the local market felt the impact of the crisis more acutely than the exporting companies. The telecommunications sector, amidst market saturation, rising competition and regulatory constraints, reported a 15 % decline in 2009 of nearly 15 %, to 4.4 billion euros, close to the 2006 figures. The software and IT services sector, the most dynamic segment of Romania’s IT&C industry in the years before, recorded a more severe downturn in 2009 than initially expected – minus 25 % – particularly in the information technology services group, where the effects of the declining local market were fully felt. Hardware and electronics manufacturing was the only sector on the rise throughout 2009, thanks mainly to the production facilities of foreign companies, particularly of Nokia, which contributed almost three quarters of the total rise. At the same time, local computer production regressed as a result of declining domestic consumption. The contribution of the IT&C industry toward the GDP formation – the gross added value to the total gross added value of all industries – was 3.15 % in 2008, having edged up to 3.20 % in 2009. The largest contribution, of two %, was offered by the telecommunications services, where the falling trends endured. The contribution of the software and services sectors was 0.8 %, while the hardware’s was 0.4 %. IT&C exports advanced 50 % in 2008, continuing on a rising trend in 2009, when they exceeded 3.3 billion euros, despite a strong overall contraction in the economy. A remarkable development was reported in the hardware sector, where rising exports coupled with diminishing imports narrowed the negative foreign trade balance to 1.15 billion euros, from a previous 2.7 billion euros in 2007. IT&C staff diminished one %, an insignificant decrease compared with a 10 % decrease overall in the Romanian economy. Many troubled companies avoided lying off specialists, whom they had a hard time recruiting in the previous years, and the centres of multinational companies and some local companies, continued to hire staff in 2009. The average annual gross pay in the IT&C industry was 8,722 euros, up eight %, with significant gaps between sectors. The average level was two-three times exceeded at the main telephone operators, software companies, IT&C consulting firms, research and development centres, and particularly at the branches of the multinational corporations. 2009 was the first year when pay in the IT&C industry declined. The decline stated in euros varied between 6 and 8 % in all the three sectors and radical changes occurred in the workforce. The IT&C hub in Romania remained in Bucharest, where the business turnover of the industry exceeded 6.8 billion euros (75 % of the total); contributed 3 billion euros toward the GDP (80 % of the total) and employed 74,000 people (59 % of the total IT&C workforce). Software production and IT&C services were also high in the West and North-West development regions of Romania, with 8 % each, followed by the Central and South regions, with 6 %. The hardware sector is centred close to the western borders of the country, in the West and North-West regions, where a combined 80 percept of the output was generated and 66 % of the aggregate turnover. Study coordinator Mircea Vuici says that although 2010 is seen as the year when recession will be over, most of the factors that should bring about economic recovery are still under a question mark and growth resumption seems to be postponed until the end of the year. Given the existing context, the study says, the 2010 developments in Romania’s IT&C industry will be determined more by the effects of economic recovery in developed economies than by the fundamentals of the Romanian economy. Growth rates are expected to be modest, with most of the companies to face two difficult quarters. The recovery of the services sectors will probably not suffice to repeat the 2007 figures. Source: Agerpres.

In 2009, the Romanian online commerce market witnessed strong consolidation moves and its total value was 225 million euros, up 12.5% compared to 2008, when estimates placed it at 200 million euros, notes daily Business Standard . The most important online commerce transaction in the year that has just ended was the acquisition by Asesoft of 51% of online store holder eMAG; the latter had been holding talks with several financial and strategic investors, as the fast-paced growth of the business had made evident the need for an investor for the company’s capitalization as early as in spring 2008. The logistical synergy between eMAG and Asesoft, that will more easily materialize now, set the groundwork for the construction of the eMAG online commerce platform providing equal access to any distributor and marketer, by the Amazon.com model. eMAG registered in 2008 over 13.8 million lei in losses, whereas its turnover increased by over 37 million lei. The retailer’s 2008 turnover was in excess of 269 million lei, up by 37 million lei from 2007, according to data published on the website of the Finance Ministry. In early March, Marius Ghenea, president and owner of Fit Distribution, the company that operates the online store PCfun.ro, completed negotiations for the takeover of online store shopIT.ro, which will however keep on operating independently, maintaining its orientation towards the sale of computer components. ShopIT.ro made in 2008 online sales of approximately 4 million U.S. dollars and the site’s clients totaled almost 40,000. Online retailer PC Garage, one of the top five players in this market, with a turnover of 7.5 million euros in 2008, was at the end of September 2009 the subject of the two important online transactions. PC garage founder Gabriel Vasile estimates the value of the store at somewhat less than one million euros. The combination of PC Garage and Fit Distribution generates an entity large enough to compete with market leader eMAG, which is one of the most important elements that led to the successful finalization of the negotiations started in May this year. Another event that set a landmark on the online commerce market was the transfer of MarketOnline from Grifon Group to Kelion Online Management and the exit from the business of co-founder Mugur Frunzetti. A former chief executive with Kelion Online Management, Frunzetti announced his withdrawal from the helm of online stores Market Online, Mediadot, Azerty and Ghelir. The four stores, previously held by Grifon Group, were taken over by Kelion Online Management by a capital injection. According to analysts, in 2008 the value of companies that run online stores fell by as much as 20% amid problems arising from the adverse economic climate. In 2009, this value could be even 50% lower compared with the previous year; the current period is favorable for cash-padded investors who have liquidities available to complete the business through acquisitions that can make easy targets. The value of the online market could reach 350 million euros in 2010, up 55% from the sales of around 225 million euros big online retailers expect for 2009. The major online stores operating in Romania are eMAG, PCfun, Cel.ro, Marketonline and PC Garage. Source: Agerpres.

Whereas the local hardware industry witnessed one of the steepest falls in the Romanian IT business, software and services were the only oxygen balloon the local players have had in 2009, as license sales dropped dramatically from the year before, writes daily Business Standard. The new projects of ERP, CRM, ECM business solutions implementation were most seriously hurt, analysts say, as the public sector displayed a disappointing absence of projects. Industry players said that the first three months of the year were the worst period of the last decade, as companies adopted a prudent investment strategy. Making a deep-going analysis of the evolution of the software and services industry, Liviu Dragan, president of the Employers Association of the Software and Services Industry (ANIS), estimated that the fall over the entire year 2009 has been of 15-20% to a value of around 800 million euros. “This decrease is the more so serious as in 2008 and in 2007 the market was registering a growth pace of about 20-25%,” argues Dragan, pointing out that the industry will keep on going down the slope next year, bearing the brunt of political instability. If there was a good side of the crisis, players say, this would be that the companies were forced to focus and take action not only related to their marketing and sales policy, but also to their operational costs as well, notes Business Standard. Thus, the companies became increasingly aware of the benefits carried by computerized systems in both cost planning and control, and in reducing costs by implementing process automation and optimization systems. The information solutions for rendering businesses efficient - more specifically the Customer Relationship Manager (CRP) and Business Intelligence (BI) - will be in 2010 the engine of the software and services market, once the customers start adjusting their business to the new economic conditions, say representatives of research firm Pierre Audoin Consultants. 70% of the IT projects started this year were based on needs related to the software and services part and only 30% involved the hardware segment, Emil Munteanu, managing partner with service provider Power Net Consulting Company, declared recently. According to ANIS estimations, the export of Romanian software fell about 50% in  the first six months of 2009 compared to the same period of the year before. Romanian software exports mainly rely on the segment of services (outsourcing) and in small proportion of around 10%, on products and licenses. According to players in the market, chances are high that software exports plunge to 287.5 million euros in value, a far cry from the 575 million euros registered in 2008. Although the software and services industry is seen declining in the first part of 2010, the players are optimistic that the business could reach rock bottom in 2010, should the banks make more financing available for new projects. Source: Agerpres.