Partly due to the region's own healthy market drivers, and partly as a result of the welcomed financial infusions of the International Monetary Fund and the E.U., the economy of the Balkan countries is reborn. IMS Research shares insights on its forecast of the video surveillance market development in the Balkan region.
A recent report issued by IMS Research, “The East Europe and Russia Market for CCTV and Video Surveillance Equipment,” forecasts strong growth for the video surveillance market in the Balkan region. With more foreign investment in the area and an increase in the spending level on physical security for some countries — Bosnia and Herzegovina and Serbia — currently with low video surveillance penetration, the video surveillance market will grow at a double-digit rate annually in the next five years. As such, the Balkan region will become one of the largest markets for video surveillance equipment in Eastern Europe.
In particular, Romania and Slovenia are expected to offer bountiful opportunities for video surveillance manufacturers. The Romanian market, which accounted for just about 50 percent of equipment sales in the Balkans in 2009, will grow at a similar pace as the rest of the region, surpassing the Czech Republic in growth rate from 2011 onward. “The Slovenian market, despite having only a population of two million, has a surprisingly large number of video surveillance project tenders out to bid,” said William Rhodes, Research Analyst for Video Surveillance and VCA, IMS Research. A large proportion of these tenders are based on network video surveillance specifications. “Slovenia, among other nations within the Balkans, will drive market growth over the next five years,” Rhodes said.
Many indicators were used to estimate the magnitude of the Eastern European markets, including the size of the economy, the size of railway network in each country and the amount of retail businesses. The research finds that not all countries offer similar growth potentials.
Despite the various large-scale, IP-based infrastructure projects implemented in Bosnia and Herzegovina, such as the construction of the Corridor 5C Highway, the Sarajevo Airport, the Al Shiddi International mall center and new hydropower plants, researchers are conservative in predicting an equally booming surveillance market for the country. “In the long term, once these projects have been completed, it is unlikely that the video surveillance equipment market will grow as substantially,” Rhodes said. The market will, then, be dominated by smaller projects and a replacement market, Rhodes added.
The private entrepreneurship segment and major public operators have collaborated in the fields of telecommunication, ADSL, DSL and the Internet to offer broadband services like remote video surveillance, although hosted video or video surveillance as a service (VSaaS) has had limited breakthroughs in mature video surveillance markets in Western Europe. For smaller countries in the Balkan region, an average monthly fee of US$8 to 14 for VSaaS solutions might have limited success due to price sensitivity, Rhodes said. Another factor that will impede the adoption of VSassS is bandwidth capacity, which awaits further expansion. However, as network infrastructure investment continues in the region, bandwidth will pose less issues, Rhodes said.
The degree of government involvement will also play an important role in shaping an upbeat market in the Balkans. Government funding, EU funding and private investment may not completely support the growing market, but will surely provide project opportunities in the countries, resulting in market growth. Public and private legislations could also provoke or inhibit growth capacity. Privacy laws have the potential to curb installations of surveillance systems in various private sectors, but other state regulations will have a chance to boost system installments, such as setting a minimum standard of security systems in all banking institutions.
Exciting Years Ahead
Backed by stable government support and available capital funding, the video surveillance market is waiting to be explored as the region experiences an infrastructure and economic boom in the next several years. “With a large new retail park planned in Bucharest in 2010 and many western brands such as Carrefour, Tesco, Wal-Mart and Ikea looking to expand their existing establishments, retail in the region will be one vertical that drives growth of the video surveillance equipment market in the coming years,” Rhodes said.