IT market booms in Baltics

The information technology services sector of the Baltic states of Estonia, Latvia and Lithuania has, according to data of the journal Enterprise Europa, grown from next to nothing five years ago to $527 million in 2002.

The journal estimates the total worth of the IT market in the Baltic states at $1 billion and $1.3 billion but states that the precise size of the market is unknown because of a lack of quality surveys.

The Technical Research Center of Finland claims that in 2001 the information and communication technology market was worth $235 million in Estonia, $631 million in Latvia and $1.3 billion in Lithuania.

The Finnish center also estimates that the IT industry was worth only $528 million in 2002, with services accounting for just $165 million of the total. It is a figure seen as a vast undervaluation by many in the industry, according to the journal.

The undisputed Pan-Baltic IT market leader is Estonia-based MicroLink, which boasts 640 staff across the three countries and sales of $63.3 million in the financial year that ended in July 2002.

Behind MicroLink there is a tier of similar but smaller IT groups and several specialized IT service providers.

Each Baltic country is home to two or three operators with Pan-Baltic aspirations and a significant market share in the IT services sector.

In Lithuania the 400-strong IT group Sonex generated sales of $46.4 million last year. The majority of Sonex's sales continued to come from hardware, but an expanding services arm of 60 people generated $17 million.

Competing with Sonex is the 260-strong IT services provider Alna, which reported 2002 sales of $24.5 million and pretax profits of $5.3 million. It claimed to be the leading operator in the region last year in terms of pretax profits.

In Latvia, software and network services provider Dati Grupa is the dominant force with expected sales of $14.8 million and pretax profits of $1 million in 2002.