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10:38
RUSSIAN IT MARKET CONTRACTS 24% IN Q2; PACE OF DECLINE ACCELERATING - ANALYSTS

Moscow. July 29 (Interfax) - The Russian IT market contracted 24% in the second quarter of 2009, said Sergei Karelov, the chief analyst of the League of Independent Experts during a conference call on Wednesday.

The market was worth less than $4 billion in the quarter, he said.

The Russian IT market has shrunk at twice the rate of the overall economy and four times faster than the IT markets in some other countries.

The computer equipment segment declined 36% in the quarter, the cellular equipment segment was down 23%, software - down 16% and services - down 1%.

Asked about future development scenarios, Karelov said the IT market is currently in "mid-nightmare." July and August will be critical months, but it is already clear the contraction is accelerating.

Karelov laid the blame on the poor competitive environment and lack of attention on the part of the state. "In other countries IT is the main factor in competitiveness, but here in Russia it's ballast that is being thrown overboard," he said.

Spending by IT companies has fallen on average by 30%-50% and salaries have been cut 20%-25%, while some 20% of IT employees have been moved to so-called black schemes, he said. However, so far there have been no significant layoffs of highly trained specialists.

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