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Colombia 2013 | TELECOMS & IT | REVIEW: ICT

On the back of growth years in 2011 and 2012, confidence in the local ICT sector is sparking increased activity and innovation.

Considered to be at the forefront on Latin American ICT, Colombia is installing infrastructure and implementing programs to bring the latest technology to its people and businesses. In 2012, President Santos announced that the government would invest $3 billion over the next four years in ICT infrastructure as part of his new platform, which aims to create equal opportunities in Colombia and narrow the prosperity gap. In 2013 alone, the government will invest $51.9 million in 32 public projects.

Currently representing 2% of the national GDP, or $3.3 billion, the ICT sector is bound to play a key role in coming years. The sector grew by 9.4% in 2012, and is expected to grow a further 9% in 2013. Colombian IT spending is projected to grow at a CAGR of 10.9% over the coming four-year period.

The implementation of more e-government services, a program that aims to eliminate the use of paper by 2014, is a priority on the authorities' agenda. In addition, large-scale projects such as the provision of tablets to school-aged children and a telecommunications satellite are expected to boost awareness about ICT services in general, especially in remote areas.

Meanwhile, the Colombian government has launched several initiatives to increase fixed broadband penetration, including “Computers for Schooling," which provides refurbished second-hand computers to schools, Compartel, which aims to provide every citizen access to telephone and internet services, and Vive Digital, which aims to increase Colombia's internet connections to 8.8 million by 2014.

The international nature of the country's ICT outlook is also a key point looking ahead. Noting that Colombia is keeping up with, if not staying well ahead of other countries in the region, Diego Molano Vega, Minister of ICT, said, “We have five sub-marine cables connecting Colombia to the world, and two new ones under construction, meaning we have excellent international connectivity."

TELEPHONE

Mobile penetration exceeds 100% in Colombia, largely attributable to the ownership of multiple SIM cards or devices in the high-income segment. In contrast, fixed-line telephone customers make up 15% of the population, a figure that continues to decrease with increased accessibility to internet and broadband mobile services. Over 20 local companies provide fixed-line services in the country, but 83% of the market is served by telecommunications giants Movistar, ETB, UNE, and Claro.

Claro dominates the local market with close to 37 million subscribers, while Movistar and UNE registered 14 million and 2.2 million users, respectively, in 2012. In the same year, ETB provided services to 1.8 million fixed-line subscribers and 600,000 broadband users.

Although Claro has long dominated the local mobile market with over a 70% share, the introduction of Mobile Number Portability (MNP) has led to a decrease in subscribers. Following the introduction of MNP in 2011, 300,000 subscribers have changed service providers, a trend that could lead to positive and healthy competition with more targeted government regulation. Additionally, 1.3 million Colombians are subscribed to mobile broadband, and the number is growing by an average of 23% per year.

INTERNET

The Ministry expects the number of internet connections to grow 200% by 2014, with coverage to expand from 70% nationwide to near 100% by 2014. In the first two years of the Santos administration, internet use increased from 2.2 million to 5.5 million connections. If the country continues growing at this pace, it will achieve its goals. As a main component of the government's overall internet connectivity plan, Vive Digital, or Digital Living, aims to strengthen the entire digital ecosystem, from infrastructure, services, and applications to end-users. The plan also intends to increase internet connections among SMEs, which make up 96% of the Colombian economy, from a current penetration low of 7% to 50% by 2014.

However, the lack of regulation by the government has prevented smaller companies from investing heavily in the quality and expansion of internet infrastructure. Despite this, companies such as ETB are investing in initiatives to establish internet centers for low-income groups, which include free services that grant users access to internet. “We invest three or four times more than the other providers, but we need regulation to be able to compete in a fair market," Saúl Kattan Cohen, President & CEO of ETB, explained to TBY.

DIGITAL LIVING

The cable TV sector has undergone major consolidation and, as a result, two companies, Claro and UNE, together control 89% of the market. With more and more TV viewers receiving channels through the internet or cable connections, companies are beginning to offer programming through mobile devices as well. UNE is pioneering the movement toward TV content streamed over the internet, adding customized marketing content to the user experience. “When people start watching programs online, companies will be able to present user-specific advertising that will have a great impact on the public TV market," Marc Eichmann Perret, President of UNE, told TBY. “The landscape is going to change completely within the next three or four years and we are going to be a part of that change."

SPACE AGE

The Colombian government is propelling its technology beyond the limits in 2013 with the launch of a geostationary satellite called Satcol. This satellite weighs some 4 tons and will remain in geostationary orbit for 15 years. Through the Satcol project, the Ministry of ICT aims to provide internet and telephony services to 30,000 remote areas of Colombia's geography, thereby servicing rural hospitals, schools, libraries, town halls, and government buildings.