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Telecoms leads Bulgaria's IT spending last year - IDC

Whether you measure in US$ or local currency, increases of 32% and 20.5% respectively ensured that Bulgaria's IT spending soared last year. IDC believes that the rise is due to a number of favourable economic criteria. And there will be more over the next five years.

IT spending in Bulgaria exceeded US$944 million in 2007, with year-on-year growth of 32.3% in US$. Measured in local currency, the market expanded 20.5% year-on-year. According to a recent IDC study, the main factors contributing to market development included a favorable economic situation, political stability, increasing FDI, and EU-driven government spending.

"As the Bulgarian economy integrates with the European economy, industries facing the heat of increased competition are gearing up to compete internationally," said Evelin Stoev, Research Analyst with IDC Bulgaria. "This is visible across sectors like communications, retail, utilities, and manufacturing, where Bulgarian companies are scouting for world-class enterprise applications and solutions from IT vendors in order to meet their goals, as well as the expectations of clients, business partners, and shareholders."

The largest vertical market in terms of IT spending in Bulgaria in 2007 was the communications sector, which invested almost US$210 million in IT, representing 22.2% of total IT expenditure in the country. The manufacturing sector placed second with 14.5% market share, followed by the financial sector with 13.2%.

"Investments to enlarge capacity, add new services, and modernise existing services continued to drive IT spending in the telecoms sector, following privatisation in the industry," continued Evelin Stoev. "The increasing foreign ownership of the Bulgarian communications and utilities companies is another engine for growth in this market, as international companies with uniform systems across countries are among the largest clients for customised IT solutions."

IDC expects demand for hardware, software, and IT services in Bulgaria to continue growing at an average annual rate of around 25% over the next five years to reach almost US$2.4 billion in 2012.

IDC's Bulgaria Vertical Markets 2008-2012 Forecast provides a detailed overview of IT spending trends and forecasts in Bulgaria for 17 vertical markets (or industry sectors) and 10 product categories that include hardware, packaged software, and services. The study includes an overview of key industry developments and challenges, vertical-specific IT drivers and trends, and tables detailing IT spending by vertical market for each product for 2008-2012. Analysis is based on continuous research and monitoring of users' IT spending, emerging purchasing patterns, and supply and demand-side research.

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